Marriage brings about a variety of rights and obligations for the parties involved and the manner in which one is married would cause the relationship between the two to differ. It feels a little distasteful to draw up a contract in case of divorce, when you haven’t even walked down the aisle, but the reality is that it isn’t only divorce for which the contract has implications. It affects your married life as well.
The default – in community of property
If you don’t draw up an antenuptial agreement in South Africa then your marriage automatically defaults to ‘in community of property’, and the state assumes that all assets and liabilities will be shared – ‘everything which is mine is yours, and everything which is yours is mine’. This may sound lovely and more inline with the spirit in which you enter marriage, but take a step back and look at the implications:
Cons

• if one of you goes into debt, creditors have claim to all of your assets – that’s your assets as well
• if one of you has your own business and becomes insolvent, your home and all assets,in both of your names, becomes fodder for debt collectors
• there is no financial independence, certain transactions, such the sale of shares, need the consent of both parties
• if one partner should die, the estate of both the deceased and surviving partner will be wound up because it is a joint estate – not great for the surviving partner who will find themselves in legal limbo for a while.
Pros

• on death or divorce, the estate is divided equally
Suddenly, a marriage contract becomes rather relevant.
Just what is an antenuptial contract?
An antenuptial contract or ANC means that you are married out of community of property. The accrual system was initially introduced to protect women who may earn a lot less than their partners while married – but today applies to the partner who, for whatever reason, stays at home or works part-time.

There are two types of antenuptial contracts:
• marriage out of community of property without accrual
• marriage out of community of property with accrual

If the accrual is not expressly excluded in the ANC it is automatically applied. With both contracts, assets and debts are separate at the time of entering into marriage. ANC without accrual – assets acquired before or during the marriage remain separate throughout the course of the marriage. Assets are not shared and each partner has a separate estate.

Pros
• if one of you becomes insolvent, creditors may not attach the assets of the other
• each of you is legally obliged to offer financial support to one another should one of
you be unable to support himself/herself
Cons
• in the case of death or divorce, you are entitled only to those assets you have accrued
in your name – should one of you choose to stay at home to raise children, that partner
would not be entitled to the assets accumulated by the other partner
best suits – those who have accumulated substantial assets prior to marriage and wish toprotect them.

ANC with accrual – each partner states the value of their respective assets at the beginning of marriage. Thereafter any assets are shared 50/50. One can state that specific assets be excluded from the accrual, such an inheritances, donations etc.
Pros
• you both share in the wealth accumulated during marriage
• if each of you owned property before the marriage, it remains in your respective names
• you each conduct your own independent financial affairs
• if one of you goes into debt, it cannot be claimed from the estate of the other
• in the case of divorce, any assets made whilst married are shared – it doesn’t matte who acquired them; each partner’s current net asset value is calculated by subtracting all liabilities from assets
• the ANC can be tailored to suit your needs
• it protects the partner who remains at home to care for the family.

Author: Mapalo Makhu

I want to help women make confident financial decisions and build real wealth.

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