The importance of an antenuptial contract, or ANC as it is often called, cannot be overstated. It is often the most important document that one will ever sign, however it is often given little regard when planning a wedding.
MATRIMONIAL PROPERTY REGIMES
There are three matrimonial property regimes which we will focus on, 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. A marriage is dissolved by death of a party or by divorce.
MARRIAGE IN COMMUNITY OF PROPERTY
A marriage in community of property is the default matrimonial regime applicable to parties, in that should the parties fail to conclude an antenuptial contract, this system will automatically apply.
When parties become married in community of property, the parties' respective estates will form a joint estate, consisting of all assets and liabilities of both parties.
Whilst this option provides for the parties sharing in one another's success, it also provides for the sharing of losses.
The contractual capacity of the parties is also limited under this regime. Certain consents are required in order for a spouse to enter into specific contracts. Section 15 of the Matrimonial Property Act 88 of 1984 deals with the various consents and what form they must take.
At dissolution of the marriage each party is entitled to one half of the joint estate.
MARRIAGE OUT OF COMMUNITY PROPERTY
An ANC determines the matrimonial property regime applicable to a marriage. Many factors may influence the chosen matrimonial property regime, such as culture, religion, pressure from families, the ages of the parties and their financial means, to name a few.
The ANC is often a difficult topic of discussion, but it is crucial for the parties to determine the matrimonial property regime before entering into a marriage. It is suggested that before making a decision, an attorney is consulted in order to explain the various options available assist the spouses in determining which regime is best suited to the parties. An attorney will also assist the parties in correctly expressing their wishing in the document.
MARRIAGE OUT OF COMMUNITY OF PROPERTY WITH THE EXCLUSION OF THE ACCRUAL SYSTEM
In terms of this regime, the parties retain their own separate estates. As the parties retain their separate estates, the debts of one spouse will not place the estate of the other at risk from creditors.
At dissolution of the marriage, each party retain his/her own assets and liabilities. No provision is made for sharing.
The parties' contractual capacity remains unaffected.
MARRIAGE OUT OF COMMUNITY OF PROPERTY WITH INCLUSION OF THE ACCRUAL SYSTEM
This form of matrimonial property regime offers the parties the advantage of retaining their separate estates, whilst allowing for a form of redistribution at the dissolution of the marriage.
Parties are entitled to exclude certain assets from the accrual. This is done by specifically excluding the assets in the Antenuptial contract.
Parties are entitled to exclude a sum of money from the accrual. This is done by means of including a commencement value in the ANC. When calculating the accrual, the commencement value is subtracted from the final value of the estate. This allows the parties to retain the value of their estate as at the date of marriage, whilst allowing for sharing in the growth of the estates after marriage.
At the dissolution of a marriage, due to death or divorce, subject to the accrual system, the accrual, or growth, of each parties' estate is determined. This is done by calculating the difference in the commencement value and final value of the respective estates and the value of the difference between the two estates is transferred to the estate that showed the smaller accrual.
HOW TO GO ABOUT CONCLUDING AN ANC
An antenuptial contract must be entered into before the marriage is concluded. The agreement must be signed before a notary and two witnesses. The agreement will be lodged with the relevant Registrar of Deeds. It is advised to enter into the antenuptial contract well before the date of the marriage, as your relevant marriage officer will require a letter confirming that you have entered into such ANC, from the drafting attorney.
Parties may change the matrimonial property regime after conclusion of the marriage, but this would entail far greater costs, as application to court would be necessary and the court may refuse to grant the order.
It is best to consult an attorney to discuss an ANC before entering into a marriage.
February 5, 2014
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.