What you should know about Marital Contracts
When in wedding planning mode, you may get consumed with the romanticism of venues, dresses, and vows. Who wants to focus on the nitty-gritty aspects when there is love to celebrate, right? It is easy to forget that the marital contract is the backbone of the law of marriage, so here are some helpful guidelines to assist you in choosing how to get married.
In South Africa we have 3 legal options:
1. In community of property.
2. Out of community of property, without the accrual system.
3. Out of community of property, with the accrual system.
The ante nuptial contract entered into will regulate the terms and conditions of the marriage. Let us look at a breakdown of what these options entail:
• Married in community of property
If no contract is entered into, this means that you are automatically married in community of property. The disadvantage of getting married in community of property is that, if one of the spouses go into debt, creditors will claim all the assets of both parties. You have no financial independence from your spouse and certain transactions will require both parties to consent and sign for same.
In the case of divorce all assets and liabilities will be split equally between parties.
• Married out of community of property
An Antenuptial Contract is signed between the parties, specifying that each party retains a separate estate. The advantage of this option is that creditors cannot attach the assets of a party for the debt of the other.
The disadvantage of this option is that, should one party stay at home and look after the children or give up his or her career to support the other party’s career, the party giving up his or her opportunity to build a career will not be entitled to any of the other party’s assets in the case of divorce.
• Married out of community of property, with the inclusion of the accrual system
The advantage of this system is that both parties can exclude assets owned prior to getting married, which means that one party cannot stake a claim to those assets when getting divorced. Both parties share in the accumulation of wealth and assets during the marriage. If one of the parties has debt, it cannot be claimed from the other party’s estate. When getting divorced, all assets bought or accumulated throughout the marriage are shared – each partner’s current net asset value is calculated by subtracting liabilities from assets. An agreement is singed prior to the marriage, clearly stipulating which assets are excluded, if any, and the value of such excluded assets. This agreement can be tailored to suit your needs.
When must an Ante Nuptial Contract be singed?
This agreement must be signed prior to the marriage taking place either in a church, or at Home
Affairs. The agreement must be registered within 3 months after signing.
Remember to change your will when getting married Most parties forget to change their wills when getting married. This may result in your partner not inheriting, or an ex-husband, wife, or partner ending up inheriting your estate.