During the excitement of your impending wedding it is easy to forget about the ante-nuptial contract. It is however vitally important that you and your future spouse discuss the matrimonial property regime best suited to your financial needs from the date that you are married.
Why the ante-nuptial contract?
In terms of South African law, (Matrimonial Property Act, 88 of 1984) your marriage will automatically be registered as being “in community of property” if you do not conclude an ante-nuptial contract.
Being married in community of property means that the assets and liabilities of the spouses are pooled together into one joint estate, regardless of whether the assets or liabilities were acquired prior to or during subsistence of the marriage, or by which one of the spouses it was acquired or incurred. You and your spouse therefore each own an undivided half-share of the joint estate (assets and liabilities). The spouses must consent to certain transactions being done within the joint estate, for example buying a house or a car. Creditors of either spouse can collect the debt of that spouse against the joint estate, which situation can put the family unit at risk.
What are the alternatives?
Prospective spouses have the option to conclude an ante-nuptial contract in terms of which they choose a matrimonial property system other than community of property. This contract is registered in the deeds office against each spouses’ name and provide a measure of security against creditors of the other. This is especially necessary if one of the spouses conducts business in his personal capacity.
The ante-nuptial contract can specify that the parties are married out of community of property with or without application of the accrual system. The accrual system was introduced to provide a fair division of assets accumulated during the marriage, especially where one spouse stayed at home to raise the children, for example. If the accrual system is excluded, the assets and liabilities of each spouse remains their own, regardless of whether it was accumulated prior to or during the marriage. A specific formula is prescribed in terms whereof accrual and the accrued assets of the spouses are divided.
The ante-nuptial contract should only be drafted by a notary public (specialist attorney), who must co-sign the contract with the prospective spouses. The contract is then registered against the names of the prospective spouses at the deeds office.
Do not be caught off guard by neglecting this important aspect of your marriage. Contact us today to attend to your ante-nuptial contract.