You are getting married soon and it is an exciting time of your life. There are 101
things to think about and countless things to do before that memorable day arrives.
But have you given thought to an Antenuptial Contract?
(a) Did you know that an Antenuptial Contract (ANC) must be executed in the presence
of a Notary before your wedding?
(b) Do you know what the consequences are if you fail to enter an ANC?
In Community of Property
Should you not enter into an ANC, your marriage will automatically be in community
of property. “In community” means that you will have one joint estate, very similar
to a partnership, where each spouse owns one half share of the joint estate. Debts
incurred by the one spouse, (even unpaid debts prior to the marriage!) will usually
bind the joint estate. In some cases, the one needs the other one’s consent, for
example when purchasing a car or a property. The risks in the case of a marriage
in community of property are real, since if one spouse falls into debt he/she drags
the other one into it as well. If one is declared insolvent, so is the other one,
even if the other one had nothing to do with all the liabilities and debts.
Out of Community of Property
The marriage under ANC will be out of community of property. Each spouse may do as
he or she pleases with his or her own assets without the other one’s consent. That
is so, of course, legally speaking—in practice you may still want to consult one
another before embarking on a major expenditure. So, as far as the law is concerned,
each spouse has his or her own estate, and may do therewith as he or she pleases.
If one falls into debt, it doesn’t necessarily affect the other one.
The Accrual System
It sounds like “a cruel system”, but it is a fair and reasonable system, especially
for young couples. This system will automatically apply in a marriage out of community
of property unless it has been specifically excluded in the ANC. The accrual system
comes only into effect at the termination of the marriage (whether by death or divorce).
Where it is in force, the increase in the value of the estate of each spouse since
the wedding date, is equally split between them. The one who has enjoyed less accrual
in his/her estate may claim from the more prosperous one, an amount equal to one
half of the difference between the accrual of the two estates. The idea behind this
is to treat the marriage as something similar to a partnership between the spouses
so that although they have their own separate estates, whatever has been gained during
the course of the marriage is shared when it comes to an end.
It is possible to exclude certain assets from the accrual system. The Notary will
be able to advise you in this regard.
An Antenuptial Contract is especially recommendable
One or both spouses conduct or may conduct a business venture/s;
One or both have a professional practice;
One has substantially more assets than the other one;
One has already incurred considerable debt or may do so in future;
They wish to act independently from one another in entering into contracts.
What To Do
Should you want to register an ANC, you need to consult an attorney who does ANC’s
as soon as possible. Don’t wait too long! The word “ante” in Antenuptial Contract
means “before” - and the law requires that the ANC be executed in the presence of
a Notary prior to the wedding.
Your attorney will require copy of your identity documents, as well as in the case
of the accruel system being applicable, details of the present net value of the estate
of each. A typical ANC will cost you ± R2000,00. Our total fee is normally R1 700.