In South Africa, being married in community of property means that all of the assets such as personal property and debts accumulated before to the marriage are divided in a common estate by both spouses. Any assets, obligations, or liabilities acquired by either spouse after their marriage will, in most cases, be added to this combined estate.
Therefore, when you marry in community of property, you and your spouse share the risks and rewards of a joint estate, according to Business Tech. No physical asset can be divided, thus regardless of your financial contribution, you and your spouse will split the earnings and losses equally.
Getting married in community of property is the easiest and cheapest way to get married because you won’t need to visit a lawyer to draw up a contract. But if one partner runs up debts it can be problematic for the other spouse’s finances.
Both spouses will be affected by the disadvantages of a community of property agreement. For example, if one partner is financially irresponsible, the other spouse will be held responsible for the obligations acquired.
“When you are married in community of property, it basically means you are not just married to your partner, but also to their finances,” said Hans Overbeek, CEO and creator of Cyber Finance. As a result, for couples who are married under community of property, there is no safety net of separate estates to protect the family’s finances.
Also Read: The Importance of Having a Will
Couples who are married in community of property should remember that only their half of the net joint estate is theirs to gift, according to Money Web. In addition, a spouse’s will cannot be used to withdraw assets from the joint estate in the case of his death.
Regardless of their marriage property regime, all couples should engage in a clear, complete estate planning process to guarantee that there are no complications after death.