As summer now really starts to unfold and the winter chills melt away we enter a time that wedding bells chime! Yes, it is wedding season and this is a multi-billion rand industry in South Africa. Unfortunately amongst all the preparations for the big day a vitally important legal issue that every couple embarking on a lifelong relationship should do is often neglected.
Take it from me, don’t leave any legal or financial matters to chance before you make this important life change and the most important thing to do before you say, ‘’I do!’’ is to enter into a marriage contract agreement that is fair and equitable and protects both parties. So, why is this so?
Under South African law, if no alternate marriage contract is signed the couple are immediately deemed to be married ‘in community of property,’ an option that can be less than desirable for many reasons.
Just one of the great disadvantages of marrying in community of property is that the bankruptcy of one of the spouses affects the total communal property, so if a risk of insolvency exists, it is not a desirable system. I will unpack this in more detail in future articles.
The Ante-Nuptial Contract (ANC)
The ANC contract is a far better option as, whether it is with or without accrual, it affords better protection for both partners in the event of insolvency. There are a couple of critical differences between these two versions of the ANC contract, however, and the choice of the right one is pretty much dependant on the circumstances of the partners as they enter into marriage.
ANC without Accrual
An ANC marriage contract without the accrual system can be beneficial to certain types of people like business people in an exceptionally high-income group who plan not to have children; a well-off widower and a wealthy widow conclude a marriage just for companionship – or if the interests of children are involved in second and future marriages.
ANC with Accrual
The ANC with Accrual is generally the preferred option and the one chosen by most people entering into a marriage in South Africa. It is also widely believed to be the fairest contract as it awards each partner according to their input during the course of the nuptials.
Under this system, both parties maintain their personal property and worth at the time of marriage but whichever of the couple’s estate has had the least increase during the marriage will have a claim for only a portion (usually one-half) of the difference between the accruals of both estates.
Seek expert help
This is just a simple overview, but hopefully explains why it is the most important thing to do before you say, ‘I do!’’ In my next article, I will go into a bit more detail about why the wrong marriage contract can end in divorce.
As notaries, one area of specialisation for Glenn Rooseboom Inc is the drawing up of marriage contracts. Contact me if you have any questions – and in the meantime stay safe – and stay legally protected!