The Need for an Antenuptial Contract

An Antenuptial Contract is one of the most important documents that you may ever sign and in the hype and rush of wedding preparations people often time neglect to or treat same as an afterthought attended to in the very last minute, with little or no thought given to the content thereof.

It is clear from the title itself (the word ante meaning “before” in Latin), that the Agreement must be signed by both parties prior to the date of marriage. The terms of the agreement come into effect on the Death of one or both of the parties or Divorce. As much as you don’t envisage Divorce at the time of entering into a marriage, statistics speak for itself.

If not from a Divorce perspective, then one can also appreciate it as a protective mechanism for your family or spouse. At a time in our country where the interest rates have spiked leaving the man on the street in a financially precarious situation, it would be prudent for an Antenuptial contract to be entered into, at least from the perspective of protecting your family should creditors come knocking on your door. After all, if you are owing a debt then so is your spouse, whether they choose to or not, if you are married in Community of Property.

Let me explain. In terms of South African Law, should you proceed to get married without an Antenuptial Contract in place, then you are deemed to be married in Community of Property. Essentially this means that all assets and liabilities are owned jointly by both parties, which includes that which was acquired prior to the date of marriage. The downfall of this regime is that if one of the parties are owing a debt, then both of you are liable. Further, if for whatever reason one of the party’s are sequestrated then both the parties are sequestrated. It certainly is not ideal.

The further frustrations that one may encounter with a marriage In Community of Property, is that the law may require the consent of both parties when transacting, for example the purchasing of immovable property. You also run the risk of financial instability when both parties are not responsible with funds. One party may for example be an avid gambler or shopaholic, who places the family’s financial well-being in jeopardy.

The marriage Out of Community of Property is the alternate to the aforementioned regime. It allows parties to live financially independent lives from beginning to end. It certainly is the solution to the concerns that Marriages in Community of property breed but in my view it is not fair, especially in marriages where the couple are building a life from scratch and the wife may take time out of her career to possibly raise children, causing her estate to stagnate due to lack of income. At the point of divorce, the wife is placed in an unfair position with a Nett value that is minimal due to the sacrifice. There are however certainly circumstances that warrant a Marriage Out of Community of Property without the accrual system.

The Marriages out of Community of Property with the application of the Accrual System is in my view the balance between the extreme of In Community and Out of Community of Property marriages. There is a level of sharing on Death or Divorce but it still allows you the financial independence to transact without concerning yourself with the consent of your spouse.

Essentially the Out of Community of Property Marriages with the Accrual System operates as follows. The parties as with the aforementioned Out of Community of Property Marriages operate and exist financially independently of each other. However, at the point of death or divorce the Accrual System Calculation comes into play. That is, the Nett Values of each estate is calculated independently of each other. The spouse with the higher Nett Value gives the spouse with the lower Nett Value, half of the difference of the estates.

With the Out of Community of Property marriages with the Accrual System, parties have the option to exclude property should they not wish same to fall part of their individual estate’s when calculating their Nett worth. Parties may also opt to begin their marriage with a ‘commencement value’’, that is, each party may decide that they are entering the marriage with liquidity, which amount they would like to be left out of their Nett worth when the accrual is being calculated. Alternatively, parties may decide to start on equal footing and have their Commencement Values declared at zero.

Ultimately the Antenuptial Contract can be tailored to suit specific needs. Parties can agree to anything that is not immoral or illegal. It is therefore important to consult an attorney who is also a Notary to advise you based on your specific circumstances. It is a specialized area of law simply because it has far reaching consequences if not attended to by the relevant qualified legal mind.

In terms of cost, most Notaries charge a rate depending on the complexity of the Contract. Costs may consequently differ. It is worthy to note that should you not enter into an Antenuptial Contract prior to your marriage and wish to then change your marital regime from an In Community of Property to one that is Out of Community of Property, then same is possible by way of a High Court Application. Such application is however quite expensive and lengthy.

Should you require any further advice please do not hesitate to contact the writer hereof.

WRITTEN BY:
Serisha Azaria Moodley
Attorney, Conveyancer & Notary Public
SERISHA AZARIA MOODLEY INCORPORATED