Abstract
In South African law, prospective spouses are generally free to choose the matrimonial property regime that will govern their marriage and regulate the ownership, control and distribution of assets during the marriage and upon its dissolution. Traditionally, the courts respected and enforced these choices based on party autonomy and contractual freedom, even where the consequences were financially disadvantageous to one spouse. A classic example was that of the economically inactive spouse, usually the wife, who had made substantial non-financial contributions to the marriage, such as homemaking, childcare, or supporting the other spouse’s career, but could emerge from a long marriage with little or no claim to the wealth accumulated during the marriage.
We examine existing and future marriages concluded out of community of property and profit and loss with specific reference to the tension between contractual freedom and the constitutional commitment to substantive gender equality. We find that developments in legislation and case law have progressively qualified the strict enforcement of matrimonial property agreements to address historical and ongoing economic inequalities between spouses.
Central to this development is the judicial redistribution discretion contained in section 7(3) of the Divorce Act 70 of 1979. It originally applied only to marriages concluded out of community of property before the commencement of the Matrimonial Property Act 88 of 1984. This provision authorises a court, under specific circumstances, to order a redistribution of assets upon divorce where one spouse has contributed directly or indirectly to the maintenance or growth of the estate of the other spouse. The purpose of the provision is to prevent injustice where the strict application of a matrimonial property regime fails to recognise the contributions of a spouse who assisted in building family wealth without acquiring legal ownership of the resulting assets. Section 7(3) originally had a very limited scope. The historical rationale was that spouses who married before 1984 did not have access to the accrual system and therefore lacked a mechanism to share contributions to wealth growth. In these cases, the redistribution remedy was intended as a corrective measure designed to prevent unfair outcomes. However, it was not available to parties marrying after 1984.
Before discussing the Constitutional Court judgment in EB (born S) v ER (born B); KG v Minister of Home Affairs2024 (1) BCLR 16 (CC), which removed the restriction, we situate the problem within the broader context of South Africa’s social and economic realities. Despite significant constitutional and legislative advances since 1994 towards formal equality, women continue to experience structural disadvantages in the labour market, lower earning capacity, interruptions in career progression due to caregiving responsibilities and a disproportionate share of unpaid domestic work. As a result, a formal commitment to freedom of contract seems to perpetuate rather than alleviate inequality. The law has therefore increasingly recognised that substantive equality requires an assessment of the actual economic consequences of matrimonial property arrangements rather than merely respect for the formal choices made by the parties before marriage. The limited application of section 7(3) came under increasing constitutional scrutiny and was difficult to justify as the continued restriction of the redistribution remedy undermined the constitutional values of dignity, equality and fairness.
The Constitutional Court finally expanded the availability of redistribution orders inter alia to civil marriages out of community of property concluded after 1984 in which there is no sharing of assets. The court reiterated that the redistribution discretion is not ipso iure applicable to all such marriages. Although the courts retain a wide discretion, they must determine whether a redistribution order would be just and equitable in the circumstances of the particular case. The spouse seeking relief bears the burden of demonstrating direct or indirect contributions to the maintenance or growth of the other spouse’s estate. The court must then evaluate a range of factors, including the nature and extent of those contributions, the duration of the marriage, the financial positions of the parties and the overall interests of justice. The purpose is not to equalise estates automatically but rather to prevent unfairness arising from the strict application of a matrimonial property regime.
We further note that this expansion includes not only civil marriages but also civil unions concluded under the Civil Union Act 17 of 2006 and that it is in line with similar expansions of the remedy for customary and Muslim marriages.
We highlight the implications of these developments for estate planning and matrimonial property negotiations. Prospective spouses who elect complete separation of property may assume that the exclusion of accrual guarantees complete financial independence in the event of divorce. Modern law demonstrates that this assumption is no longer entirely accurate. The possibility of a redistribution order means that parties must consider the potential consequences of judicial intervention when negotiating and drafting antenuptial contracts. Estate planners, attorneys and financial advisers must therefore take account of the evolving legal landscape and the constitutional values that increasingly influence matrimonial property law.
In a significant part of the article, we address the relationship between redistribution orders and trusts. The question arises whether prospective spouses who wish to avoid the possibility of redistribution can structure their affairs using trusts. Trusts have long played an important role in South African estate planning because they allow assets to be held separately from individuals’ personal estates. Where assets are validly transferred to a trust and it is properly administered, those assets do not form part of the personal estate of either spouse.
The recent expansion of judicial discretion regarding the redistribution of assets has created a significant dilemma for spouses who intentionally choose complete separation of property in their marriage. In this context, a discretionary inter vivos trust is often used as a legitimate tool to ring-fence assets from the claims of third parties, including claims by spouses on divorce. Because the trust functions as an independent entity, its assets generally do not form part of a trustee’s or beneficiary’s personal estate, provided that the trust is managed correctly and not used as a vehicle for “unscrupulous divorce planning”. We analyse whether a trust can effectively shield assets from a future redistribution claim and conclude in principle that such an outcome is possible. A properly constituted and administered trust may remove assets from the reach of a redistribution order because the assets belong to the trust and not to the spouses personally. However, the effectiveness of this strategy depends entirely on compliance with the legal requirements governing trusts.
South African courts have repeatedly demonstrated a willingness to scrutinise trusts used merely as instruments of personal control or devices to evade legal obligations. Where a trust is found to be a sham, where trustees fail to act independently or where trust formalities are ignored, courts may look beyond the trust structure and treat the assets as effectively belonging to the controlling spouse. In such circumstances, trust assets may be considered when determining financial consequences upon divorce. It is therefore emphasised that the mere creation of a trust is insufficient; the trust must operate as a genuine and legally compliant trust in both form and substance.
At the heart of the matter lies the distinction between genuine estate planning and the creation of an alter ego trust. When a spouse exercises such an excess of control that the functional boundary between managing the assets (control) and benefiting from them (enjoyment) disappears, the court may “pierce the trust veneer”. The courts apply a “control test”, as seen in Badenhorst v Badenhorst 2006 2 SA 255 (SCA), to determine whether a spouse has de facto (as opposed to de iure) controlled trust assets as if they were his or her own personal property.
To ensure that a trust remains a relevant legal structure, trustees must strictly adhere to four core principles: maintaining a clear split between control and enjoyment, keeping personal and trust estates separate, fulfilling fiduciary duties with independent judgment and ensuring joint action by all trustees. The appointment of an independent trustee is particularly vital; he or she must act as more than just a “rubber stamp” for a dominant spouse’s decisions. Proper administration, including formally recorded resolutions and avoiding the co-mingling of funds, is essential to prevent a trust from being labelled an alter ego or, even worse, a sham.
However, a troubling gap in the law remains. If a trust is managed perfectly and legally, with no evidence of abuse or bad faith, a spouse (more often than not the wife) who has acted as a homemaker and contributed indirectly to the growth of the trust estate (rather than her husband’s personal estate) may find herself without a remedy regarding the trust assets. Since the trust is an independent legal entity and not a party to the marriage, the court cannot include its assets in a redistribution order absent provable abuse.
The discussion of trusts illustrates a broader theme running throughout the article: the continuing tension between legal form and substantive justice. Matrimonial property law has evolved from a system that focused almost exclusively on formal ownership and contractual arrangements to one that increasingly considers the actual economic realities of marital relationships. Yet this evolution remains incomplete. While constitutional developments and judicial discretion have significantly improved the protection available to economically vulnerable spouses, the availability of sophisticated estate-planning mechanisms means that substantive equality is not guaranteed in every case.
We conclude that South African matrimonial property law reflects an ongoing effort to balance competing values. On the one hand, one finds freedom of contract, legal certainty and respect for the choices made by prospective spouses. On the other hand, there are constitutional commitments to equality, dignity and fairness. The expansion of the redistribution discretion demonstrates a clear movement towards recognising the economic value of both financial and non-financial contributions within the marriage relationship. Nevertheless, the existence of trusts and other lawful estate-planning mechanisms means that outcomes will continue to depend on the specific facts of each case. Although the law has moved significantly towards achieving substantive gender equality, it cannot be assumed that every economically disadvantaged spouse will ultimately obtain a fair share of the wealth accumulated during the marriage. The pursuit of substantive justice, therefore, remains an evolving project within South African family law.
Keywords: complete estate separation; estate planning; gender equality; marriage out of community of property; redistribution discretion; trusts
- This article’s featured image was created by Tim Mossholder and obtained from Pexels.