The importance of an Antenuptial Contract

An antenuptial contract, also known as an “ANC”, is one of the most important documents that a natural person will sign as it has a direct impact on his/her estate. An ANC dictates ones financial future after marriage, how you transact with third parties and directs how your assets will be distributed if you obtain a decree of divorce or upon death. It is therefore of utmost importance to exercise due diligence when considering the content thereof.

What is an Antenuptial Contract

An ANC is an agreement which parties enter into before their marriage. An ANC is regulated by the Matrimonial Property Act, 88 of 1984 and requires that the agreement must be signed by the parties in the presence of a notary and two competent witnesses, who also attest to the singing. The ANC will then registered with the relevant Registrar of Deeds.

The effect of an Antenuptial Contract on a marriage

An ANC will determine if the marriage is based on one of the following regimes:

1. Marriage in community of property;
2. Marriage out of community of property with accrual;
3. Marriage out of community of property without accrual;

If parties elect to not conclude an ANC, the regime of marriage in community of property will automatically apply. The effect of marriage in community of property is that both respective estates of the parties will form a joint estate which will include all assets and liabilities. Upon dissolution, each party to such a marriage will receive a half portion. Dissolution occurs upon the death of one party or when a decree of divorce is obtained.

If an ANC is signed by parties, it will stipulate whether the couple is married out of community of property with the accrual or without the accrual. Marriage out of community of property without accrual will ensure that each party retain their separate estates. The assets and liabilities are therefore not joint and each party will still be responsible for their respective estates. Marriage out of community of property with accrual has the effect that each party must declare his/her estate’s nominal value at the commencement of the marriage and retains their assets and liabilities until death or divorce, whereby the accrual of

each will be calculated and divided in accordance with the rules set out in the Matromonial Property Act, 88 of 1984.

The accrual can be described as the extent to which a spouse has become richer than the other at the end of the marriage. The aforementioned relates to the amount by which the one spouses’ joint wealth has increased over the period of the marriage. It means that each spouse acquires a certain right to the other’s property upon divorce or death.

Benefits of an Antenuptial Contract

Before signing an ANC, consider the following benefits thereof:

• It prevents the marriage from automatically being concluded in community of property.
• It contains all the rights, duties and consequences of each party which ensures transparency.
• Possible future dispute are addressed before marriage.
• Your estate is protected from your spouse’s creditors.
• You have free will dealing with your assets and do not require the consent of your spouse.

Conclusion

It is important to discuss what will transpire if parties were to be divorced in the future and may prove to be troublesome, especially before entering the marriage. Due to the importance of an ANC, it is best to discuss such with an Attorney before entering a marriage.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)