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Planning your wedding day is a joyful experience full of expectations and excitement. The names on your to-do list are those of wedding planners, dress designers, make-up artists and hair stylists. Make sure you also put the following two words on your list:

Antenuptual Contract

In other parts of the world this agreement is often called a “Pre-nup” and you have probably heard that word in movies and on television. Many people however do not know what it means, or that it is a very important part of getting married.

The Antenuptual Contract is a written contract between two people who are about to get married, which sets out the terms for possession of assets, how future earnings will be treated, how each person will control his or her property, and how everything will be divided when the marriage ends.

This may not be as exciting as planning the menu for your Big Day, but it is very important, as the effects of the Antenuptual Contract will influence your life for many years after your wedding day.

In terms of South African Law, there are 3 forms of marriage:

In Community of Property
Out of Community of Property, without the Accrual System
Out of Community of Property, with the Accrual System

In Community of Property

When people get married in Community of Property, their individual assets and liabilities will become part of one joint estate, and they will own these assets and liabilities in equal shares. They must, from that point onward, both agree and consent on the buying and selling of assets, and before entering into certain contracts.

This may sound romantic, as it reminds us of the saying that “we are in this together, for better or for worse” but in actual fact it poses real risks to the parties. If one of the spouses owns a business, or is exposed to risk, his or her insolvency will affect the joint estate. Also, should one of the spouses pass away, the joint estatemust be administered, which may cause financial stress for the other spouse.

If you get married without signing an Antenuptual Contract , then your marriage will automatically be one in Community of Property. The only way to avoid this, is by signing an Antenuptual Contract before you say “I do”.

Out of Community of Property, without the Accrual System

When people marry Out of Community of Property, without the Accrual System, the following will happen:

The assets and liabilities belonging to each of them prior to the marriage will not be merged into a joint estate, but will remain as is.
Assets acquired during the marriage will also not be shared, as there will always be a complete separation of assets of the spouses.
When the marriage ends, neither spouse will have a claim against the other

This system comes down to “what is mine, is mine, now and forever” and does not make provision for spouses who want to share the assets that they build up during the marriage. It is, however, often chosen by spouses who are entering a second or third marriage and where both have income and assets.

Out of Community of Property, with the Accrual System

The Accrual System is based on the principal that each spouse will own the assets and liabilities that he or she had prior to the marriage, but that the assets acquired during the marriage will be shared. The best way to explain it, is by way of example:

John and Jane decide to get married Out of Community of Property, with the Accrual System. To do this, they must each make a list of all their assets and liabilities. On the assets side, John has a car that is worth R250 000, but he still owes the bank R150 000, so the nett value of the car is R100 000. Jane owns a flat that is worth R900 000 but she still owes the bank R500 000, so the nett value of the flat is R400 000.

After calculating their total nett values on the above basis, including all assets and liabilities, it appears that John is worth R300 000 and Jane is worth R600 000. They include these figures in their Antenuptual Contract as the values they will start their married life with.

During the course of their marriage, the Accrual System does not play an active roll, as it only kicks in when the marriage is dissolved (by death or divorce) So, they are for practical purposes married out of community of property, and each one can deal with this or her assets individually.

Then the unforseen happens. The marriage is dissolved (by divorce, or the death of one of the spouses) and now the Accrual System comes into play. The parties must now again calculate their nett worth, at the time that the marriage is dissolved.Here is what happened:

John was involved in a very successful business, and managed to increase his nett worth from R300 000 to R4 million. Jane also increased her wealth, from R600 000 to R1.5 million, but then decided to stop working to raise the kids and run the household.

It now follows that John grew his estate by R3.6 million, and Jane grew her estate by R900 000. The Accrual System states that the spouse who enjoyed the most growth (John) must give half of the difference in growth, to the other spouse.

John growth: R3 600 000
Jane growth: R9 00 000
Difference: R2 700 000
Half of the difference: R1 350 000

So, John must give R1 350 000 to Jane.

This marriage system is popular with young people getting married, who want to be married out of community of property, but also want to share in the financial success acquired by each other during the marriage.

What to do next?

Decide which marriage system will work best for you
Complete the form and send it to us.

What then?

We will draft an Antenuptual Contract for you, and arrange for you to sign it. Once it has been signed, we will giver a Certificate to you that you must give to the Marriage Official who will conduct the ceremony. We will then proceed with registration of the Antenuptual Contract in the Deeds Office.