Advantages and Disadvantages of Marrying In Community of Property
One of the most important decisions to make before getting married is choosing a matrimonial property regime to be married under. Your marriage contract has future financial and legal implications. It is thus imperative to get appropriate advice before marrying. Each matrimonial property regime is more or less suited depending on the personal, financial and business profile of the individuals. Whatever Matrimonial Regime is chosen the parties must explore and discuss their options before getting married and decide which matrimonial property regime will suit their individual needs. Each choice comes with its own set of advantages and disadvantages.
Marriage In Community of Property
This form of marital property regime is referred to as the default option as no antenuptial contract needs to be signed. In the absence of an antenuptial contract, the couple will be deemed to be married in community of property which may not be the ideal system to be married under.
Advantages of Marriage In Community of Property
A negligible advantage of this system is that there are no legal costs for the registration of an Antenuptial contract. Under this system, all assets and more importantly liabilities and business risks of the spouses are shared and unified together into one joint or communal estate, subject to a couple of exclusions. Both parties share equally in any profit or accrual. The disadvantages are worthy of mention.
Disadvantages of a Marriage In Community of Property
One of the greatest disadvantages of this marital regime is that the couple remains jointly liable for each other’s debt and current business risk, including debt that was incurred before the marriage. In a community of property marriage, one spouse has the capacity to bind the joint estate through their actions which can have devastating effects especially in the case of insolvency. If one spouse is unable to pay their debts, their creditors have a claim to the joint estate which can lead to both spouses being declared insolvent.
The management of the joint estate can also be cumbersome as spousal consent is needed in certain circumstances, such as selling fixed property, withdrawing from a joint bank account, or selling assets from the joint estate. Having limited contractual capacity and impaired freedom to trade may not be ideal and can cause anger and frustration. Spouses married in community of property share a credit record. Careless financial behaviour on the part of one spouse can negatively impact the other spouse’s creditworthiness.
When it comes to freedom to make a will remember that any spouse may only will half of the joint estate and that the complete estate of the deceased and the remaining spouse is frozen pending finalisation of the estate, which process may take considerable time.
On dissolution of the marriage as a result of the death of either of the spouses or divorce, a 50/50 separation of the estate may not be a fair result, particularly where one spouse contributed considerably more to the growth of the joint estate.
Best Suited For
Marriage in Community of Property is best suited for younger couples where there is no business risk or creditor from either of the spouses. This is an outdated matrimonial property regime full of inherent legal and financial risks. Because of the inherent disadvantages is not advisable to marry In Community of Property.