A bird’s eyeview of antenuptial contracts: what you need to know before you say “I do”

07 October 2019 474

There is a definite misconception in society today that regulating the proprietary aspects of the dissolution of one’s marriage is like “getting married with the intention of getting divorced.” Not only is this entirely untrue, an antenuptial contract does so much more than divide assets upon the dissolution of a marriage. This agreement dictates the proprietary operation of one’s marriage throughout its duration and ensures that parties have thought and are intentional about the financial aspect of their union.

An antenuptial contract (“anc”) is an agreement by which prospective spouses to a marriage out of community of property regulate certain patrimonial aspects of their pending nuptials and the distribution of their assets upon its possible dissolution (by death or divorce), for example, which assets (if any) are to be excluded from the joint estate. It is important to note that parties who do not enter into a valid antenuptial contract before they get married are automatically presumed to be married in community of property. This means that all assets and liabilities held by the parties before the conclusion of their marriage, as well as those acquired thereafter, form part of one joint estate. Having one joint estate has various implications, one of the many being that where one of the spouses purchases immovable property, the other will automatically be the owner of half of this property, even if this was not the intention of the parties. Furthermore, there are certain transactions that spouses married in community of property cannot enter into without the written consent of their husband or wife – the above example of the purchase of immovable property being only one such transaction.

As previously mentioned, a marriage out of community of property can only be entered into where the parties to the marriage have executed a valid anc. Under such a contract, a marriage out of community of property can be entered into either with or without the application of accrual. Where the accrual is not applicable, there is total separation of each party’s estate. This means that each spouse retains the assets they entered the marriage with as well as those they acquired during the subsistence of the marriage to date of dissolution, by death or divorce.

Where the system of accrual applies, each spouse will begin the marriage with what is known as a commencement value, which is the value of their separate assets. If the marriage should terminate, either by death or divorce, the value of each spouse’s estate will again be calculated. The spouse whose estate has shown the smaller growth (“accrual”) during the subsistence of the marriage will be entitled to the value of half of the difference between their accrual and that of their spouse’s estate. The accrual system finds common application in situations where one spouse does not make financial contributions to the household as much as the other, but grows the communal domestic unit in other ways, for example, by seeing to the running of the household and the care of minor children.

It is indisputable that deciding which matrimonial property system should be applicable to one’s marriage is not a decision to be taken lightly, and the consequences of such a decision cannot be avoided. One must, therefore, think carefully about the practical implications of each option and approach an attorney for clarity and assistance.
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