A Prenuptial agreement is also known as an ANC, or Antenuptial Agreement, is a marriage contract that is drawn up by a family lawyer. Even though discussing financial affairs is not something couples look forward to, it is something that must be done. Having these discussions can ensure that both parties, entering into the marriage, have clarity on their financial future together.
Types of Marriage Contracts in South Africa
There are three types of marriage contracts (marital regimes) in South Africa. Each has its advantages and disadvantages, depending on the couple.
Marriage within Community of Property
Marriage within community of property does not require a contract, as one automatically enters into this marriage regime if one does not sign another agreement, such as a Prenuptial Agreement. Marriage within community of property means that:
- Once married, all assets as well as the debt of the parties involved, are joined into a “common estate”.
- Both parties legally have ownership of all assets, including each other’s capital. Other assets included are property, vehicles, inheritances (if not specifically excluded within the Will), and any earnings.
- This ownership includes liability for any debt or insolvency that might take place. In effect, this means that if one party is declared insolvent, the other is automatically insolvent as well.
- If either of the parties within the marriage passes away or a divorce occurs, all assets are split equally. This includes any debt that might have been incurred by either party.
Prenuptial agreement marriage contract
A Prenuptial Agreement is a legally binding contract that is entered into between two parties before marriage. The contract is a safety precaution, protecting those that enter into a union against the unforeseen negative effects of a civil union. These can include debt, insolvency (bankruptcy), and the way in which property and financial assets are divided in the case of divorce or death.
The main reasons why couples choose a prenuptial agreement include:
- Asset protection: Prenups can specify how assets acquired before and during the marriage will be divided in the event of a divorce. This can be particularly important when one or both partners have significant assets, businesses, or debts.
- Clarifying financial expectations: Prenuptial agreements provide an opportunity for couples to openly discuss their financial expectations and obligations. This can help avoid misunderstandings and conflicts related to money matters during the marriage.
- Protecting family assets: Individuals may use prenups to safeguard family wealth, inheritances, or businesses, ensuring that these assets remain within the family in the event of a divorce.
- Debt protection: Prenuptial agreements can specify how debts incurred by one spouse before or during the marriage will be handled, protecting the other spouse from assuming responsibility for those debts in the event of a divorce.
- Child maintenance or spousal support considerations: Prenups can outline the terms of spousal support or alimony, specifying whether it will be paid, how much, and for how long. This provides clarity and can help prevent disputes over support in the future.
- Protecting the rights of children from previous relationships: If one or both partners have children from previous relationships, a prenuptial agreement can address matters related to inheritance, custody, and support for these children.
Types of Prenuptial Agreements in South Africa
Marriage Signing a Prenuptial without Accrual
A Prenuptial Agreement without accrual will require both parties entering into the civil union to sign a legally binding contract before marriage. This agreement is, in essence, the complete opposite of marriage within community of property.
- Once a Prenuptial without accrual is signed, and the civil union commences, each party’s assets remain their own.
- Each party’s current possessions and future earnings are solely their own. This includes the acquisition of, or currently owned properties, vehicles, and other possessions.
- This is also applicable to any debt, insolvency, or liability. Neither party will be held legally responsible for the other party’s burdens.
- If a divorce takes place, each person walks away with their own assets. This is oftentimes a very quick and easy resolve.
- In this instance, it is extremely important to ensure that there is a Will in place, as a partner’s assets will not automatically go to the other party, should death occur.
Marriage Signing a Prenuptial with Accrual
A Prenuptial Agreement with accrual is very similar to one without accrual; however, there are some assets that are shared. Each party’s assets before marriage, unless otherwise specified, are seen as their own.
Once married, they share the increased and decreased value of assets. Thus, if a divorce takes place, the current value of both parties’ estates are calculated and compared to the value they started with. This joint increase in value is then split evenly between the parties involved.
Drawing up a Prenuptial Agreement in South Africa
If you have decided to move forward with a Prenuptial Agreement, whether it be with or without accrual, it is important to start negotiations months before the union. It is better to ensure that both parties are happy with the agreement, and have the necessary time to make sound and informed decisions.
In order to draw up and sign a Prenuptial Agreement, an attorney that is also qualified as a notary must be consulted. To find out more about marriage regimes, and what the best choice would be for your civil union, contact our team or request a consultation online.
