Separated but not divorced? Your ex could claim your wealth

South African law could still give your spouse a share of your growing wealth. Here's how to protect your assets. Couples who have been separated for years could still be sharing in each other’s growing wealth without even realising it. And while divorce proceedings drag on, one spouse could be moving assets, transferring money or restructuring businesses in ways that leave the other with substantially less than they are legally entitled to. It’s not so much War of the Roses as a game of hide and, well, seek. Attorney Tasha Van Eyssen of Fluxmans Attorneys said the financial consequences of a failed marriage do not necessarily end when couples separate. Spouses married out of community of property with the accrual system, where each keeps their own assets but shares in the wealth built up during the marriage, remain financially linked until their divorce is finalised. “The obvious question is: should the accrual continue to run after the parties have separated?” she said. “The answer, ordinarily, is yes, but section 8 of the Matrimonial Property Act provides an important remedy if continuing to wait for the divorce is likely to prejudice a spouse’s accrual claim.” Separation does not end financial consequence Essentially, the calculation of what each spouse is entitled to share is made when the divorce is granted, not when one packs their bags and leaves. Van Eyssen said this could have significant consequences when divorce proceedings drag on. “A spouse who has built up his or her estate during that period may find that the increase is taken into account when the accrual is eventually calculated.” The Supreme Court of Appeal confirmed in two separate judgments, in 2016 and 2018, that the value of what spouses are entitled to share is ordinarily calculated at the date of divorce, she added. But the greater danger, Van Eyssen warned, could come when one spouse starts selling off assets or moving wealth beyond the reach of the other. “What if the other spouse is not simply getting richer? What if assets are being moved, disposed of or otherwise dealt with in a way that places the eventual accrual claim at risk?” Arguments over assets begin, and sometimes never end. Picture: iStock But there is a way around the sneaky. The Matrimonial Property Act allows a spouse to ask a court to divide the wealth accumulated during the marriage before the divorce is finalised, if there is evidence that the other spouse’s actions are likely to seriously harm their financial entitlement. Van Eyssen said warning signs could include assets being transferred into trusts or related companies, property being sold for less than it is worth, unexplained debts or money being transferred to people or businesses connected to the other spouse. She cautioned, however, that not every financial transaction or increase in wealth after separation was grounds for legal intervention. “If a spouse continues to run a business after separation and the business grows because it is successfully operated, that does not necessarily amount to serious prejudice.” Hiding assets and money When business assets disappear, or the value of an estate declines without a reasonable business explanation, the circumstances could justify an application to court. Van Eyssen said the date of separation remained important, even though it did not ordinarily determine when the sharing of accumulated wealth stopped. Comparing what each spouse owned when they separated with what they own now could reveal suspicious transactions. Bank statements, property valuations, trust documents, company records and loan accounts could become critical evidence. “The court must be satisfied that the applicant’s right to share in the accrual will probably be seriously prejudiced by the conduct or proposed conduct of the other spouse.” She said going to court required evidence rather than suspicion, but waiting until the divorce was finalised could prove costly. “Once assets have been dissipated or transferred, recovering their value may be considerably more difficult.” Van Eyssen said couples facing long divorce proceedings should look at what has happened to their finances since separating, rather than assuming their financial obligations ended when they stopped living together. “The important question is therefore not simply when the parties separated, but what has happened to their respective estates since separation.”