antenuptial contracts

ANTENUPTIAL CONTRACTS

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ASKED

QUESTIONS

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1 QUESTIONS

1 2

What is an Antenuptial Pros & Cons of the
Contract (ANC)? Marital Regimes

What are the Marital 4
Regimes?
What is the Accrual?
3 How is the Accrual

Why sign an ANC? calculated?
Requirements for an ANC Are assets acquired during
What if an ANC is not signed?
the marriage shared?

What is an Antenuptial What are the

Contract (ANC)? Marital Regimes?

An Antenuptial Contract (ANC) is a A couple can be married one of three
document which determines the marital ways:
regime of the marriage, regulates the
financial affairs of the couple during and In community of property
after the marriage and stipulates how Out of community of property without
third parties will treat the couple. As the accrual
name suggests, it is a contract which is Out of community of property with
signed before the nuptials. accrual

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QUESTIONS

The Marital Regimes

In Community of Property Pros:
As it is automatic, there is no additional paperwork
This is the default position in South African Law. The assets before the wedding.
and liabilities of the couple are shared for the duration of Division of assets on death or divorce is simpler as they
the marriage (“what’s yours/mine is now ours”). are divided equally (50/50).

Cons:

Both parties are liable for all debts. Creditors can claim payment from the joint estate which could result in the entire

estate being sequestrated and all assets being lost.

There is no financial independence. Both parties must agree on every transaction and be included in every contract.

On death, the entire joint estate is frozen until wound up by the executor which could leave the surviving spouse lacking

liquidity while the estate is still being administered.

The executor fees are calculated on the gross value of the joint estate, which increases the administration fees payable.

Out of community of property Out of community of property
without accrual
with accrual
Here, each party retains absolute control over their assets
(and liabilities), whether acquired before or during the While each spouse is the sole owner of their assets and
marriage (“what’s yours is yours and what’s mine is liabilities (whether acquired before or during the marriage),
mine). This regime best suits those that have accumulated at the end of the marriage the value of their estates during
substantial assets prior to marriage and wish to protect the marriage is shared, through the accrual system.
them. Pros

Pros: If one spouse becomes insolvent, creditors are not able
If one spouse becomes insolvent, creditors are not able to attached any of the assets of the other spouse.
to attached any of the assets of the other spouse. There is no complicated joint or equal administration
The parties are not forced to share their assets with issues.
each other The antenuptial contract can be tailored to suit the
The antenuptial contract can be tailored to suit the couple’s needs
couple’s needs. Each spouse shares in the wealth accumulated during
the marriage
Cons Each spouse can conduct their own independent
On death or divorce each spouse is only entitled to the financial affairs
assets in their own name. Cons
The couple must sign and ANC before their wedding in The couple must sign and ANC before their wedding in
order to be married out of community of property order to be married out of community of property
The accrual calculation at the end of the marriage can be
complicated.

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3 QUESTIONS

Why sign an ANC? Requirements for an ANC

The most common reasons for the popularity of In order to me married out of the accrual
antenuptial contracts are: (whether with or without accrual) the following
must happen:
Debts are not shared
A spouse can protect the other from creditors, 1.The couple must sign an ANC, in front of a
particularly if one has his/her own business Notary Public, before they are married. The
Each spouse retains control of their own signing can take place a little as an hour
property and is responsible for their own before the wedding but the ANC can also
debts. (preferably) be signed earlier in the wedding
Each spouse is independent from the other preparations
and is able to make independent financial 2.Within 3 (three) months of the signing, the
transactions regarding their own assets Notary must register the ANC at the Deeds
Office.

What if an ANC is not signed?

If an ANC has not been signed before the marriage the couple would be married
in community of property. In order to change this to out of the accrual (whether
with or without accrual) the couple must apply to court for permission to change
their marital regime. The court must be satisfied that there are good reasons for the
change and that no creditors will be prejudiced before the order will be granted.

This is a costly and time-consuming application which may not, depending on the
circumstance, be successful.

Also, the couple would only be considered married out of community of property
from the date of the court order, not the entire marriage.

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QUESTIONS

What is the Accrual? How is the Accrual calculated?

The accrual is a system which aims to The accrual of each spouse is calculated by
ensure that both spouses benefit equally deducting the starting value (stated in the ANC)
from the marriage. from the value of the estate at the end of the
marriage.
This is achieved by once spouse paying The smaller accrual is deducted from the larger
half of the difference between the two accrual and the spouse with the larger accrual must
accruals to the other. pay half of this difference to the spouse with the
smaller accrual.
The accrual system only causes values to
be shared between the two spouses. Each For example:
spouse retains their own assets
regardless of whether they have the Z has a starting value ofY has a starting value of
larger or smaller accrual. The spouse with
the larger accrual would only need to R250 000.00 and an endR400 000.00 and an end
transfer or sell and asset if he/she does
not have sufficient liquidity to pay the value of R1 150 000.00.value of R1 200 000.00.
accrual claim.
Z’s accrual is thereforeY’s accrual is therefore
Are assets acquired during
the marriage shared? R900 000.00 R800 000.00

Apart from the values of all assets being As Z has the larger accrual, Y will receive the
included when calculating the accrual, ALL accrual payment from Z. The value which Z must
assets of one spouse are completely pay is:
separate from those of the other. R900 000.00 – R800 000.00 = R100 000.00
R100 000.00 / 2 = R50 000.00
Z must pay R50 000.00 to Y.

The estate of each party therefore increased by
R850 000.00 during the marriage:

Z: R900 000.00 – Y: R800 000.00 +
R50 000.00 = R50 000.00 =
R850 000.00 R850 000.00

It is possible to exclude assets from the calculation,
so long as they are owned before the marriage and
are detailed in the ANC.
All inheritance, whether received before or during
the marriage is automatically excluded.

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