When two parties enter into a marriage in South Africa, unless stated otherwise, they are automatically married in community of property. When two spouses are married in community of property all of the assets and liabilities accrued before- and after the marriage are shared between both parties in a joint estate. When the marriage is dissolved by divorce all of the assets and liabilities are divided equally among both spouses. In order to get married out of community of property, both parties will have to agree to an Antenuptial Contract. This enables both spouses to retain ownership of their separate estates after the marriage has been concluded, meaning that the assets and liabilities accrued by each individual before the marriage will remain within their own separate estates.
Different Types of Antenuptial contracts
There are two different types of Antenuptial contracts that partners can enter into, those that include the accrual system and those that exclude the accrual system.
An Antenuptial contract that excludes accrual enables both parties to retain separate estates throughout the marriage as well as after the marriage has been dissolved. Assets and liabilities acquired throughout the marriage remain in these separate estates after the dissolution of the marriage by divorce or death.
An Antenuptial contract that includes accrual functions in a similar way throughout the duration of the marriage, with accrual only coming into effect once the marriage dissolves. Both spouses will retain their own estate throughout the marriage, however when the marriage dissolves the estate is divided amongst both parties according to their agreement. An Antenuptial contract may include various terms and conditions set out by the parties involved, relating to the division of assets in the event of divorce or death. According to the accrual system, the partner with the smaller estate at the time of dissolution has a claim against the larger estate. The smaller estate could have a claim to 50% of the difference between the values of the two estates unless another percentage is agreed to by both parties in the Antenuptial contract
Why Enter Into an Antenuptial Agreement?
An Antenuptial contract has a number of benefits that might attract couples to the agreement. Each couple will have their reasons for entering into an Antenuptial agreement and the contract can be drafted to suit every unique situation. The agreement allows an individual the freedom to manage property throughout the marriage, never needing the consent of their spouse when dealing with their own estate. This agreement also protects one party from the debts and liabilities of their spouse. Therefore, if the estate of one spouse is declared insolvent it will not affect the other’s estate during the marriage.
Each case is different, and every couple should discuss their preferences at length before entering into a binding agreement. Cawood Attorneys will help to tailor your Antenuptial contract to meet your requirements, ensuring that the drafting and registration of the contract are concluded as quickly as possible. Contact Cawood Attorneys today to speak to one of our professional team members, or visit our website for more information on the various services we provide.