Thinking about tying the knot?
What you need to know about an antenuptial contract.
Overview of Matrimonial regimes
CIVIL MARRIAGE
Civil marriages are the most common type of marriage in South Africa. In South Africa, 3 different civil marriage regimes can be registered:
- Marriage In Community of Property;
- Marriage Out of Community of Property subject to the Accrual System; or
- Marriage Out of Community of Property with the Accrual System’s Exclusion.
If you get married without concluding an antenuptial contract, it automatically means that you are married in community of property.
CIVIL UNION / PARTNERSHIP
The Civil Union Act, 2006 (Act No. 17 of 2006) legalised same-sex marriages. It allows two people, regardless of gender, to form either a civil union or a civil partnership. Couples opting for a civil union marriage regime enjoys the same rights, responsibilities and legal consequences as those in a civil marriage. Civil unions often referred to as same-sex unions, can, in fact, be entered into by opposite-sex couples as well.
CUSTOMARY MARRIAGE
Customary law governs Customary marriages. At its core, it is popular for regulating the indigenous African customary laws that are concluded in terms of customary marriages, unions and lobola.
– lobola must be fixed;
– marriages must be negotiated, celebrated and concluded in relation to customary law;
– couples over the age of 18 years;
– both the parties must agree to be married under customary law;
– neither of the parties should already be in a civil marriage
What does the accrual mean?
Accrual relates to the extent of increase of the joint wealth between spouses from their Net value throughout the marriage. Should one spouse have a smaller accrual than the other, then he or she will have a claim against the difference between the two amounts when the marriage comes to an end which is either by way of Death or divorce.
What are the advantages and disadvantages of the accrual?
Advantages of a Marriage Out of Community of Property with Inclusion of the Accrual System (With Accrual)
This system is undoubtedly the fairest marital property regime as each spouse effectively shares in the increase in the assets accumulated during the subsistence of the marriage. A Spouse that has less earning capacity than the other spouse is not unfairly disadvantaged. The parties have separate estates and have full commercial freedom to trade and contract and no consent is necessary from the other spouse to contract. The spouses are not exposed to the creditors or business risk or insolvency of the other spouse. During the subsistence of the marriage, the position is the same as if married out of community of property, but when the marriage dissolves as a result of divorce or death, each spouse shares equally in the profit and losses made during the marriage.
Disadvantages of a Marriage Out of Community of Property with Inclusion of the Accrual System (With Accrual)
The parties must keep careful record of transactions to be able to correctly calculate accrual at the dissolution of the marriage. In the event of death, the surviving spouse has a claim against the first-dying spouse’s estate for their share of the accrual. Additionally to the antenuptial contract the parties must do careful estate planning.
What do I need to consider to make a choice?
Here are four important reasons to sign a prenuptial agreement before walking down the aisle:
- You are Marrying Someone with Significant Debt.
- You Wish to Protect Your Assets.
- You Want to Ensure Financial Security for Both Parties.
- You Want to Protect Your Business.
What is estate planning?
Estate planning involves the application of recognised techniques to protect, preserve and grow an individual’s or family’s estate during and after their lives. Estate planning is a multi-faceted exercise that requires the professional input of a number of specialised disciplines, such as lawyers, financial planners, insurance and assurance brokers, and tax experts. Estate planning is an ongoing process and there are certain recognised stages in a person’s personal and business life that require you to reassess your estate plans, such as:
- The birth of a child or children
- Inheritance
- A new business venture
- Retirement
- Disability
- Acquiring or selling a major asset
- Trusts and donations
What can I put into an Antenuptial contract and what can I exclude?
It is important to note that there is a difference of the context and purpose of an Antenuptial contract and a Will. However, the two can be combined to some extent. An Antenuptial contract is a Notarial contract between parties who contracts with one another relating to their respective estates. Thus it would mean that any conditions can be brought into this contract, from Testamentary wills, formation of a Trust, Inter-spouse donations or any other terms as long as it is not contrary to any prescribed law.
When drafting an Antenuptial contract with the inclusion of the accrual, both parties will state their respective entry value (Net value) of their estates and specify all assets which should specifically be excluded from the calculation of the accrual.
Should I not rather have a separate Will drafted?
Why do I need a Will?
Having a professional Will prepared is a task which is often delayed. A Will is an important legal document that has a significant impact on how your family, or those dearest and dependant on you, live after you die. The task of drafting an appropriate, viable and valid Will should be entrusted to the care of an experienced practitioner because, unlike most other errors, this is one that cannot be remedied.
A Will should be reviewed and updated from time to time. A change in your personal and financial circumstances should automatically trigger a review. Legislation or decisions made by the courts also has an impact on Wills and estate planning and it is therefore extremely important to obtain expert advice when drafting a Will.
Frequently asked questions
When should we conclude and execute our Antenuptial contract?
The law requires that an Antenuptial must be signed before the marriage is concluded and must be registered in any Deeds registry office in South Africa, within three months from date of signature of same. It will be prudent to properly plan to consult in advance with a Notary public.
Can I change my contract before or after the registration or marriage is concluded?
Ultimately no, you should correct any errors to your contract before same is signed, marriage is concluded and the contract registered. Should a contract be amended after the conclusion of the marriage and registration of the contract a High Court application must be brought to execute same.
Can I change my marriage regime on a later stage after my marriage is concluded and then enter into a contract?
Yes this can be done, but it is not advisable as you would have to approach a High Court on application to approve such contract and have to show that it would not be prejudicial to any party or creditors. It would ultimately be more costly than to have an Antenuptial drawn up before the marriage is concluded.
