Why do you need an Antenuptial Agreement / 'n Huweliksvoorwaarde Ooreenkoms?
The default in South Africa – in community of property / binne gemeenskap van goedere.
If you don’t draw up an antenuptial agreement in South Africa then your marriage automatically defaults to ‘in community of property’, and all your assets and liabilities as well as your spouse's will be shared – ‘everything which is mine is yours, and everything which is yours is mine’. This may sound good when you enter marriage, but just have a look at the implications:
- When anyone of you goes into debt which cannot be repaid, creditors can lay claim to all your and your spouse's assets.
- If anyone of you has your own business and becomes insolvent, your home and all assets, in both of your names, can be attached and sold.
- There is no financial independence. Certain transactions, such as the buying and selling of shares, must be consented to by both parties.
- Should one partner die, the estate of both the deceased and surviving partner will be wound up because it is a joint estate.
- Your estate is divided equally on death or divorce.
Antenuptial contracts or agreements are divided into two types:
- Marriage out of community of property without accrual.
- Marriage out of community of property with accrual
With or without accrual?
In an antenuptial agreement concluded prior to your marriage, the accrual system will automatically apply under the Matrimonial Property Act of 1984.
Before the introduction of the accrual system, if prospective spouses chose to be married out of community of property, there was no form of sharing between them of what was built up during the marriage. The accrual system was introduced to remedy this.
'Accrual' means increase and by applying the accrual system, couples will share the assets that are built up during the marriage.
The basic underlying philosophy in respect of the accrual system is that each party is entitled to take out the asset value that he or she brought into the marriage, whereafter they then share what they each have built up during the marriage.
In most cases the accrual system is, perhaps, the fairest marriage system for the majority of couples.
If you want to exclude the accrual system, it must be specifically stated in your antenuptial contract.
The exclusion of the accrual system completely separates the spouses’ assets - not only those assets brought into the marriage but also those acquired during the marriage. Each spouse will retain exclusive ownership of his or her own assets and liabilities. There will thus be no sharing and on dissolution of the marriage, neither spouse will have any claim against the assets of the other, in other words, there is no sharing of profit or loss
Take note however, that it is possible to draft the antenuptial contract in such a way that the parties share both their pre-marital and post-marital assets on a 50/50 basis, just as if they were married in community of property, but without incurring liability for each other’s debt.
In order to simplify and facilitate the drafting of the agreement, the couple should declare the value of their possessions in detail and as accurately as possible.