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 if:
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.
