I want to donate vacant land in a fully serviced township area to my ex-girlfriend who has subsequently entered into a customary marriage. She can pass it to her children but not her husband. In other words, I don’t want this property to be part of their marriage regime. I bought the property for R23 000 seven years ago and it is now worth R266 000 according to the banking app I am using. What are my options?
Thank you so much for your question. At the outset, it is important to understand the legal implications of a customary marriage such as that which your ex-girlfriend, to whom you wish to donate vacant land, has entered into. In South Africa, customary marriages are regulated by the Recognition of Customary Marriages Act. This Act deals with marriages concluded in accordance with customary law before and after the Act came into effect in November 2000.
For the purposes of this answer, I have assumed that your ex-girlfriend’s customary marriage complies with all the requirements of the Act and that there is only one husband and one wife. In such circumstances, the marriage will be ‘in community of property’, unless they have entered into an antenuptial contract beforehand, which provides for their marriage to be ‘out of community of property’.
In community of property
Where a person’s marital regime is one of in community of property, the assets of both parties fall within the joint estate. As such, when you donate the vacant land to your ex-girlfriend, it will form part of the joint estate.
One way to keep the vacant land out of the joint estate is by bequeathing it in your will to your ex-girlfriend and stipulating that it does not form part of the joint estate.
Although this means that she only gets ownership of the property upon your death, it does achieve the objective of keeping it out of the joint estate.
Another way of keeping the vacant land out of the joint estate is by making use of an inter vivos trust. Although this may be a more costly and complicated structure, it will ensure that the vacant land does not form part of the joint estate. This option will, however, involve setting up an inter vivos trust, appointing trustees to manage the trust assets and nominating beneficiaries in whose benefit the trust assets must be managed.
Out of community of property
In the event that your ex-girlfriend concluded the customary marriage by entering into an antenuptial contract beforehand, she will be married out of community of property. This means that there is no community of property and no joint estate.
She can then leave the vacant land to her children in her will, but there is no guarantee that this will happen as we have a system of freedom of testation. This means that an individual can leave their assets in their will to whomever they choose to. There is therefore the possibility that she may leave the vacant land to her husband and not her children. Again, a way of ensuring that her husband does not benefit from the vacant land is to set up a trust as mentioned above.
Another way of keeping the vacant land out of your ex-girlfriend’s marital regime is by making use of limited rights to property.
For example, you can donate the property to her, on condition that on her death the vacant land is transferred to her children. This type of structure does bring in a lot of complexity and limits how the vacant land can be used and dealt with in future. It may also have some negative capital gains tax implications. I would suggest that you only consider this option after receiving advice from a suitable professional. I hope this gives you some insight into your options and what to consider before making a decision.