Separated but not divorced? Your ex could claim your wealth

Long-married couples who have legally separated could still be sharing each other's wealth without realizing it, warns attorney Tasha Van Eyssen. Even if divorce proceedings linger, one spouse might be moving assets, transferring money, or reorganizing businesses in ways that leave the other with far less than they're legally entitled to. Unlike a dramatic war, this financial conflict often plays out in a game of hide and seek.

In South Africa, couples married under community of property with the accrual system remain financially linked until their divorce is finalized. Van Eyssen explains that the legal division of wealth accumulated during marriage doesn't end when couples separate. The court calculates what each spouse is entitled to share when the divorce is granted, not when one party moves out. However, this process can have significant consequences if divorce proceedings drag on.

If one spouse builds up their estate during separation, the increase may be taken into account when calculating the eventual share. The Supreme Court of Appeal has confirmed in two separate judgments that the value of shared assets is generally calculated at the date of divorce. Yet, the bigger concern is when one spouse starts selling assets or moving wealth in a way that jeopardizes the other's accrual claim.

This could involve transferring assets into trusts or related companies, selling property for less than its worth, accumulating unexplained debts, or moving money to people or businesses connected to the other spouse.

To protect their financial entitlement, a spouse can ask the court to divide the wealth accumulated during marriage even before the divorce is finalized, if there's evidence that the other spouse's actions will harm their claim. Warning signs include suspicious transactions that significantly reduce the value of shared assets.

While not every financial transaction after separation is grounds for legal action, Van Eyssen advises couples facing long divorce proceedings to examine their finances since separating, rather than assuming obligations ended with the separation. Bank statements, property valuations, trust documents, company records, and loan accounts can provide crucial evidence.

The court must determine if the applicant's right to share in the accrual will be seriously prejudiced by the other spouse's conduct. Going to court requires evidence, not just suspicion, but waiting until the divorce is finalized could prove costly if assets have already been dissipated or transferred.