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Are you guilty of this?
You’re about to have your pants sued off you…or your spouse is filing for divorce…and you’re thinking of ways to legally get your assets off your name and into someone else’s name before its crunch time (Time for some rapid financial planning methinks 😉 )!
So it’s pretty cool when you’re married out of community of property (Antenuptial contract or ANC) isn’t it?
They want to repossess your furniture, so you say it belongs to your spouse.
They want your yacht? Yip, it belongs to my spouse!
The life insurance? Sorry, it belongs to my spouse too!
Unfortunately for us (and I count myself here as well!), the Insolvency Act makes provision for this.
In Section 21 of the Insolvency Act…
This section allows the Master complete control over the assets of the solvent spouse (The one who’s in the clear!), as if their property belonged to the insolvent spouse (The one who’s not in the clear!).
The solvent spouse must now prove that these assets belong to them – and not the insolvent spouse (Talk about a raw deal here).
What does the solvent spouse need to prove?
- That the property belonged to them before their marriage to the insolvent spouse
- That the property was acquired by the solvent spouse in terms of a marital settlement (such as a divorce)
- That the property was acquired by the solvent spouse during the marriage by a title which is valid against the insolvent spouse’s creditors. For example, the solvent spouse can provide invoices proving that he or she bought the asset in his or her own name. But we need to be careful here…if the insolvent spouse paid for it, then this asset can be included in the insolvent spouse’s estate!
- That the property owned by them was acquired with the proceeds or income from any of the property mentioned above.
So the bottom line is that you shouldn’t feel too complacent being married out of community of property – big brother can still get at you…
Which is why many people protect their assets by placing them in trust!
Kind regards,
The InsuranceFundi Team
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