TO ANTENUP OR NOT…
– Mea Malan
Marriage is the beginning of a joyous journey between two people and an important part of every couple’s foundation should be to consider drawing up a suitable antenuptial contract.
As unpleasant as it may seem, securing a stable financial future is vital to the success of a marriage. Consulting with an attorney and / or notary public to draw up an antenuptial contract should be seen as the responsible caring for the wellbeing of one another. The antenuptial contract will only be applied when the marriage relationship between spouses dissolve, either by death or divorce.
Various factors should be considered by future spouses when drawing up an antenuptial contract, such as:
- Should the accrual system apply to your marriage?
- How are you going to share your income and wealth?
- Whether you would like to include certain assets to the joint estate, although it was obtained before marriage.
An accrual claim will be paid out before any other inheritance and the tax implications should be considered by the future spouses.
There are a few reasons why people choose to apply the accrual system to their future marriage:
- Protection of women who choose to stay at home and take care of the children;
- Difference in earning capacity;
- Dependency due to illness;
- Career changes, or
- Willingness to share wealth.
In essence, the antenuptial contract is a document between future spouses which regulates how assets owned before marriage are dealt with, what the value of each spouse’s estate is at inception of marriage, how the spouses’ estates will be divided and calculated upon termination of the marriage and how assets will be distributed, not only at divorce stage, but also after death.
In terms of the South African law, the antenuptial contract determines whether your marriage will exist:
- In Community of Property – essentially there will be only one estate between the future spouses;
- Out of Community of Property with the application of the accrual system – each spouse will place a value on his / her estate at the commencement of the marriage but after marriage and with implementation of the accrual each spouse’s assets and liabilities will be calculated and divided in the event of termination of the marriage;
- Out of Community of Property with no accrual system – essentially this means “what is yours, is yours and what is mine, is mine”.
It is therefore essential that you appoint an attorney or notary public to draft your antenuptial contract, which contract should also be registered at the Department of Home Affairs to bind not only the spouses, but also persons who are not parties thereto.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.