The choice of a marriage contract and property ownership structure carries significant legal and financial implications, particularly when it comes to immovable property. Whether you are planning to get married, already married or considering your property ownership options, understanding the impact of these choices is essential for safeguarding your financial interests.
Zama Nsibande, a Candidate Attorney at Robinson Bertram takes us through the different impacts of marriage contracts on property ownership and advice on how you can protect your assets. When it comes to property ownership, she takes us through the advantages and disadvantages of having your property under your name vs. under a trust.
Types of marriage contracts in Eswatini
The type of marriage contract a couple enters into determines how property is owned, controlled and divided in the event of a divorce or other disputes. Below are the main marriage regimes and their implications:
Marriage in community of property
Overview:
Couples share all assets and liabilities equally, forming a joint marital estate. Historically, this regime was biased against women due to marital power, which gave husbands sole authority over matrimonial property. However, the landmark case of Doo Aphane v Attorney General abolished marital power, ensuring equal rights for both spouses under Section 20 of the Constitution.
Legal implications:
- Both spouses must consent to major transactions involving the property.
- In divorce, assets and debts are split equally, regardless of who contributed more.
Financial implications:
- Joint property is at risk from creditors seeking repayment for either spouse’s debts.
- Financial mismanagement by one spouse can jeopardise the other’s financial security.
Best for: Couples with high trust and similar financial habits who are comfortable sharing assets and liabilities equally.
Marriage out of community of property without accrual
Overview:
Spouses retain sole ownership of their assets and liabilities, both pre-marital and acquired during the marriage.
Legal implications:
- Each spouse manages their property independently.
- Only jointly acquired assets are subject to division upon divorce.
Financial implications:
- Protects personal assets from the other spouse’s creditors.
- Provides financial independence but offers no sharing of wealth growth during the marriage.
Best for: Couples who prioritise financial independence or are entering the marriage with significant assets or liabilities.
Marriage out of community of property with accrual
Overview:
Spouses retain ownership of their pre-marital assets while sharing the wealth accumulated during the marriage.
Legal implications:
- Assets acquired during the marriage are included in accrual calculations.
- Inheritances and pre-marital assets can be excluded through a written agreement.
Financial implications:
- Provides a fair balance between protecting personal property and sharing growth.
- Protects inheritances and pre-marital assets.
Best for: Couples seeking fairness in wealth sharing while safeguarding personal assets.
Customary marriages (Eswatini Law and Custom)
Overview:
Governed by Eswatini customary law, these marriages may not automatically follow the principles of community of property unless registered under civil law.
Legal implications:
- Property division depends on customary norms or additional agreements.
- Registered customary marriages may be treated similarly to civil marriages.
Financial implications:
- Division of property can be unpredictable and subject to negotiations.
- Best for: Couples adhering to Eswatini cultural traditions and practices.
Property ownership: In your name vs. under a trust
When it comes to immovable property, whether to own it personally or through a trust depends on your goals for control, protection and inheritance planning.
Owning property in your name
Advantages:
- Full control over the property.
- Simpler to buy, sell or use as collateral for loans.
- No ongoing administrative costs.
Disadvantages:
- The property is subject to divorce settlements if married in community of property.
- Creditors can seize the property if you face financial difficulties.
- May attract estate duties upon inheritance.
Owning property under a trust
Advantages:
- Asset protection: Shielded from creditors and divorce settlements, as the property is legally owned by the trust.
- Estate planning: Avoids estate duties and simplifies inheritance.
- Control flexibility: Trustees manage the property according to the trust deed.
Disadvantages:
- Initial and ongoing legal and administrative costs.
- Reduced personal control unless you are also a trustee.
- Requires compliance with legal formalities and careful planning.
Best for: Individuals with significant assets who want to protect property from personal financial risks, ensure intergenerational wealth transfer and minimise estate duties.
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