DIVORCE 101 – DETERMINING THE ESTATE (PART 1)
One of the most contentious issues in a divorce is the nature and extent of assets which the parties own. Whether the parties are married in community of property and have a joint estate, or are married out of community of property and have separate estates, determining the joint or separate estate in divorce action assists in determining the means of the parties.
The means of a party in a divorce action is important in determining issues of maintenance, monetary claims against the estate and, in the case of a marriage in community of property, division of the joint estate.
As a starting point, it is vital to understand what an asset is in the context of divorce action. It is proposed that an asset consists not only of physical things but of immaterial things too, such as a right, title or interest. An asset can take many forms so long as it is capable of being valued in monetary terms.
Apart from the obvious movable assets such as cars, tools, jewellery and furniture there is also immovable property and various other assets which are also typically encountered such as:
- Shares in a private or public company ( including shares listed on the stock exchange as well as those not listed);
- Membership interests in a close corporation;
- Loan Accounts;
- Share Options;
- Pension Interests;
- Insurance Policies; and
There are however assets which can be excluded either from a joint or separate estate. The exclusion of assets largely depends on whether the parties are married in or out of community of property.
In part 2 of this article we will provide more detail regarding the role of pension interests and trusts in divorce actions, as well as the exclusion of assets in marriages in and out of community of property.