Universal Partnerships

Introduction

Today, about 60 percent of couples live together before a marriage. There is no common-law marriage in South African law and therefore the period of time that a couple spends living together does not translate into a default marriage. The principle of a universal partnership assists cohabitees by affording them a right to a share in the property acquired during the relationship.

What is a “universal partnership”?

A universal partnership is an express or tacit agreement between two people, including same sex couples, who choose to live together in a permanent relationship without entering into marriage. Our law does not give automatic rights to partners in a cohabitation relationship. If one of the parties dies without leaving a Will, the domestic partner is not legally entitled to inherit or to claim maintenance from the deceased’s estate. An aggrieved party would have to go to court to show that the parties were partners in a “universal partnership” and that the one party owes something to the other.

Requirements of a universal partnership

A universal partnership will exist if the following essentials are present:

(a) each of the partners must bring something into the partnership, whether it be money, labour or skill;
(b) the partnership should be carried on for the joint benefit of the parties;
(c) the object should be to make a profit;
(d) the contract should be a legitimate one.

Assets of a universal partnership

The assets of a universal partnership are those assets brought into the partnership at inception and those acquired during the existence of the partnership. A partner may not alienate or use partnership assets as personal security without the other partner’s prior consent and may not entirely exclude a partner from controlling the partnership property or assets. Partners cannot share in the pension assets of their partners on termination of the relationship, even those who are able to prove the existence of a universal partnership. The reason for this is that the Pension Fund Act makes reference to a “divorce” and a universal partnership is not a marriage and can therefore not be terminated by divorce.

How can we help?

We can assist cohabitees to draft a Universal Partnership Agreement dealing with the division of their property upon termination of the partnership, whether by the death of one of the parties or the termination of the relationship. It can also provide for the duty of support between the parties and the right to share in each other’s property during the relationship, or upon termination thereof. The agreement may be entered into at any point during the relationship, prior to the termination thereof. It is also advisable that a Will be drawn up in order to govern the succession of the parties.

If you have been cohabiting with your partner and the relationship has come to an end, we can advise you on the prospects of lodging a claim against your partner on the grounds of a universal partnership.

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