Why sign an Ante-Nuptial Contract
What is in the name of an Ante-Nuptial Contract and why sign one before marriage?
Congratulations so you and your partner having decided to tie the knot after weeks, months or even years of courting.
As a couple one of the most important things to discuss before marriage is marital regime should govern your marriage to safeguard both parties’ interests.
Should you or should you not sign an ante-nuptial contract. An ante-nuptial contract is applicable and relevant when you and your partner, spouse to be have decided to marry Out of Community of Property. Out of community of property in the sense that your individual estates would not be joined together after matrimony. If your intentions are not to be married in community of property where you will be jointly and severally held liable for each other’s debts and liabilities and the need to request each parties’ consent in terms of section 15(2) of the Matrimonial Property Act 88 of 1984 then sign an Ante-nuptial contract is the way to go.
An ante-nuptial contract must be executed before the solemnization of the marriage and registered in the deeds office within 3 months of its execution. If this is not done before a Notary prior to the solemnization of the marriage the parties will be considered as married in community of property. The Notary will do the registration on your behalf at the deeds office and furnish you with the original registered contract after registration. In South Africa only two (2) types of ante-nuptial contracts apply;
- With accrual; or
- Without Accrual
What does this really mean to you?
Let’s break it down further:
A marriage out of community of property with the application of the ACCRUAL system is a marriage regime whereby the parties choose to marry out of community of property including the accrual system and expressly exclude in community of profit and loss.
The accrual system provides for equal sharing of the profits (accrual) made by the parties during the subsistence of the marriage. In choosing this option the parties can also choose to include or exclude assets acquired before the marriage. You must also keep in mind that if the commencement value of the estates is not specified at the commencement of the marriage it will be deemed that it was NIL.
Further, inheritance, donations or non-patrimonial damages are excluded from the accrual system unless the parties agree otherwise in their ante-nuptial contract or if a testator or donor stipulates otherwise.
At the dissolution of the marriage, be it by death or divorce the net estate values are then determined separately, and the estate with a larger growth will then transfer half of the difference to the smaller estate.
Should the parties not be able to establish the commencement value of their respective estates prior to execution of the ante-nuptial contract and solemnization of the marriage a provision is made in terms of section 6 (1) of Act 88 of 1984 for the parties to register a Notarial Statement, which must be signed within six (6) months of date of marriage.
Marriage out of community of property without the application of the ACCRUAL SYSTEM
This marriage regime in terms of Chapter I (Act 88/1984) the parties must expressly exclude the accrual system.
In this option there is juristic equality in that each party has full right of disposal over his/her own assets (i.e. you don’t need the consent of your spouse), but there is no financial equality in respect of any contribution the spouses have made in regards to necessaries for the joint household in the absence of an agreement in terms of section 23(4), unless there is an agreement thereto in terms of section 23(3) in marriages before 1 November 1984. In this instance where the wife’s income is used only for household consumables and the wife has no claim to the husband’s estate and agreement would be best to cover the wife for losses incurred during the subsistence of the marriage.
This option is recommended where both parties already have substantial estates or incomes and may also be appropriate in cases of second or subsequent marriages. Basically it means what is yours is yours and what is mine is mine.
This option warrants that one should draft a Will to provide for the other spouse when the marriage is dissolved by death.
The marital regimes have also been touched on in our blog on “Is Divorce on the Cards”.
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