Asked by Niekie on 23-07-2021 07:23:43
Question posted in the Divorce Law category relating to KwaZulu-Natal

Good day,

Married out of community of property with acrual, assets at date of marriage was nil for both of us. She worked for very small salaries earlier in the marriage and at the moment does not work, needless to say, her contribution to the estate was in actual fact zero, I on the other hand am working in the Middle East earning a very genorous salary (not getting divorced yet but might be heading in that direction). House bond in both our names as she worked at the time of purchase.

I have one child of my own aged 22 (daughter), fully independent and living on her own. She has 2 children, son aged 20, did not pass matric, playing computer games all night long then sleeps untill after 1pm some days and with absolutely no will to do anything else. Daughter aged 22, not working and also dependent on us.

I paid school fees from early in primary school right throughout high school for all 3 of them, their father could not afford to do so and only paid about R1500 maintanance. I am paying for the children's medical aids (hospital plan) and the children's car insurance.

I am also looking after her mother in the sense that I am paying her flat rental monthly, give her a monthly allowance of R4000 and bought her a vehicle of R80.000.

Hope this is sufficient background information, now for my questions:

1. So, regardless of what who put into the marriage, we split everytning 50/50?

2. What about the debt (house, car, credit card and loans). Can we first settle everything and split what is left?

3. Will anything mentioned in our background count in my favour when assets is split?

4. If I register a trust, will it have any effect if or when we get  divorced?

5. Is investments included in the assets?

Thanks, hope to hear from you soon.

Further information relating to Question:

How can I set up my will to benefit my daughter best or will a Trust be the best option?

Posted by Att. Patrick on 23-07-2021 13:05:00

Hi there and thank you for your question,

I am a practicing attorney based in South Africa and I will assist you with your question. Please feel free to ask as many follow up questions in order to clarify your question. If you have a new question, you must please open a new thread.

Please keep in mind that our discussions is for general information purposes only. Our engagement on this website does not create an attorney-client relationship. 

Do you mind if I take a moment to review your question? I will come back to you shortly!

Att. Patrick

Posted by Att. Patrick on 23-07-2021 13:15:33

Re question 1 – because your commencement values were both NIL, the accrual means that whoever’s estate increased in value by the least, has a claim against the other person whose estate increased by the most, for 50% of that increase. So I suppose, in your instance, your wife could be looking at a claim of 50% of ‘everything’ because of the massive accrual.

Re question 2 – you don’t need to settle everything, you just need to take everything into the calculation. So if the house is worth R2m, but you have a R500k bond, then the equity in the house would be R1.5m. You would work out the same for everything, including all of the debts, and you would come up with an accounting “profit” which would be achieved. You guys would then need to agree on who gets what asset/debt so as to ensure that the “profit” was shared equally. E.g. you might take the house and the bond, and she might get R1.5m in cash. Then you would be evens.

Re question 3 – no, not really, since you’ve both contributed (as much as you could) to the joint estate. Even if she was a stay-at-home mom, this would still be seen as a contribution!

Re question 4 – no, because the only way to get things into the trust is to donate them, and for that you’d either need her consent (e.g. with the house) or you’d need to pay 20% donations tax. Also, a court could set aside the trust if it thinks that you’ve moved assets into the trust in order to hide them in the divorce. Any NEW assets however, those could go into the trust.

Re question 5 – yes, because it is an asset.

Re question Will – yes, most certainly. What you should be doing, NOW, is to draft a new will in terms whereof you leave everything to your daughter. I would leave everything to your daughter directly, if she is older than 21 years old, fully independent and living on her own. It’s not like she is a crazy 18 year old who would blow it all on a Porsche!

So if I register a Trust next month and ad assets to the trust moving forward, this will be okay?
If I draft a new will and leave everything to my daughter, this will only be my 50% of the assets right?

Posted by Att. Patrick on 23-07-2021 15:35:20

Q: So if I register a Trust next month and ad assets to the trust moving forward, this will be okay? --> Yes, definitely. There might be a question raised of 'how did the trust get the money to buy asset A or B?', but this question is inevitable. Perhaps you can loan money to the trust to enable the trust to buy the assets. 

Q: If I draft a new will and leave everything to my daughter, this will only be my 50% of the assets right? --> You are 100% correct, yes. You can only leave your daughter your estate, which (in your situation) basically works out to 50% of the joint estate.