SHOULD YOU GET MARRIED WITH AN ANTE-NUPTIAL CONTRACT
The importance of an antenuptial contract, cannot be overstated. One may say that an ante-nuptial contract is one of the most important documents that a person will ever sign. A ante-nuptial contract is entered into prior to a couples marriage, the purpose of which is to regulate the terms and conditions of the marriage. For example, if your spouse becomes indebted, an ante-nuptial contract will protect you against your spouses’ creditors.
There are three different types of marriage regimes in South Africa namely, a marriage in community of property, a marriage out of community of property without accrual and a marriage out of community of property with accrual.
MARRIAGES IN COMMUNITY OF PROPERTY
A marriage in-community of property becomes applicable when couples do not enter into an ante-nuptial contract. If parties were to marry in-community of property, all the assets and liabilities of both spouses, whether they have been acquired before, or during the marriage form part one joint estate, which will be divided equally between the spouses should the marriage end.
MARRIAGES OUT OF COMMUNITY OF PROPERTY
An Ante-nuptial contract is required for parties that wish to marry out of community of property. This type of contract separates the spouses assets and liabilities. Each party is liable for their own debt, and each party’s assets are protected from creditors. On dissolution of the marriage, each party will retain their own assets and be responsible for their own debts.
MARRIAGE OUT OF COMMUNITY OF PROPERTY WITH INCLUSION OF THE ACCRUAL SYSTEM
In this type of marriage regime each party is the owner of their own estate and each party is liable for their own debt. Inheritances, legacies and donations are excluded from the accrual calculation, unless the parties agree to terms and conditions which state otherwise in their Antenuptial contract.
If the parties divorce, each spouse’s estate is calculated by determining a nett asset value of the estate which is determined by calculating all the assets and liabilities and thereafter subtracting the liabilities from the assets. The spouse who’s estate is smaller will be subtracted from the value of the larger estate and the difference between the two estates is split.
It is important that parties deciding to enter into an ante-nuptial contract must do so before the marriage is concluded as the ante-nuptial contract will need to be lodged with the Registrar of Deeds, and the individual marrying the parties will furthermore require a letter from the Attorneys who had prepared the ante-nuptial contract confirming that an ante-nuptial contract exists.
Contact our offices should you require an ANC.
Author – Kate Bailey – Hill