SOUTH AFRICA Law and Practice Contributed by: Beverley Clark, Jana van Breda, Elmarie Erasmus and Lauren Christie, Clarks Attorneys
Identifying Assets and the Disclosure Process During litigation, parties are required to make full financial disclosure to one another and the court. In Gauteng and Limpopo, this initially occurs by way of a detailed Financial Disclosure Form, which is signed under oath and is subject to penalties for perjury. Specified supporting documents are required to be provided with this form. Other provinces in South Afri ‑ ca are in the process of considering and implementing the Financial Disclosure Form. The parties can also make use of the Uniform Rules of Court, which provide for extensive discovery under oath, specific documents to be called for, and the power to subpoena documents and call witnesses. Subpoenas are commonly used to procure documents and information from banks, employers and relevant companies and trusts, but cannot be issued on for ‑ eign entities or individuals. In order to procure foreign evidence, one would generally have to use special procedures (such as the Hague Evidence Convention), which can be costly and take a long time. Property Regimes and the Division of Assets In South Africa, there are two primary matrimonial property systems: marriages in community of property and marriages out of community of property. As stated above, “community of property” (universal community) is the default system for civil marriages in South Africa. Under this system, a “joint estate” is created where all the assets of both parties are com ‑ bined, and the parties are jointly responsible for the liabilities of the joint estate. Marriages “out of community of property” are estab ‑ lished by entering into a prenuptial agreement. These marriages have a complete separation of property during the marriage, and parties can administer their own estates as they deem fit. The accrual system will automatically apply to all marriages out of com ‑ munity of property, unless the parties have expressly excluded its application in their prenuptial agreement. Under the accrual system, the increase in value of each party’s estate during the marriage (with a few exceptions) is shared upon the dissolution of the mar ‑ riage by death or divorce.
Parties may also set commencement values and/or exclude specific assets from the accrual system in their prenuptial agreement. In marriages out of community of property and exclud ‑ ing the accrual system, the court may take certain fac ‑ tors into account and order a redistribution of assets from one party to the other, to prevent unfairness. Trusts Trusts are separate legal entities recognised in South Africa. Trust property is held by the trustees accord ‑ ing to the terms of the trust deed. The trustees are responsible for managing the trust property for the benefit of beneficiaries, whether individuals or entities. Trust property is not, in the ordinary course, consid ‑ ered part of a person’s estate in divorce proceedings. If it can be proven that the trust is the “alter ego” of one or more of the trustees, or that the trust is a sham, and that a party transferred assets into the trust during the marriage in a bad-faith attempt to deprive their spouse of their legitimate claims on divorce, then the trust property could be considered to be part of the spouse’s estate for the purposes of the divorce. Only then would the trust assets be included in the determination of the value of the estate of such party in divorce cases. As such, the bar is high for parties seeking to include trust assets in divorces. 2.4 Spousal Maintenance Attitudes Towards Spousal Maintenance During a marriage, parties have a reciprocal duty to support one another. However, the reciprocal duty of support that exists between spouses during the sub ‑ sistence of the marriage terminates upon the dissolu ‑ tion of the marriage (by death or divorce). Accordingly, there is no automatic right to spousal maintenance post-divorce. Parties may agree to the payment of maintenance by one party to another post-divorce. If there is no agree ‑ ment, a court granting a decree of divorce has the discretion to make an order for spousal maintenance post-divorce. The party who has a need for mainte ‑ nance must bring such a claim in the divorce action in terms of Section 7 (2) of the Divorce Act. This section provides that a court granting a divorce may make an
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