Antenuptial Contracts – R1 600 all inclusive fee (Consultation,drafting of the Contract, signature and notarization, lodgement and registration)

 

Why do you need to sign an Antenuptial Contract?

 

 

Should the parties not enter into an Antenuptial Contract before marriage, they will automatically be married in community of property.

 

 

This means that the parties’ separate estates before marriage get merged into one joint estate. The results being that the parties cannot enter into contracts like buying a house on their own, but needs the written consent of the other party.

 

 

This limited contractual freedom is obviously not the ideal, but perhaps the biggest disadvantage of this system is that when one or both spouses incur debt and are financially reckless, the entire joint estate will be held liable. Therefore, when one spouse becomes insolvent, so does the other spouse.

 

 

To avoid these unfortunate circumstances, the parties need to enter into an Antenuptial Contract before getting married, thereby rendering their marriage out of community of property. Being married out of community of property means that the spouses retain their separate estates and not being held liable for the debts of the other spouse.

 

 

•Pro’s: Lana Roux Attorneys’ all inclusive Antenuptial Contract fee of R1 600.00 is avoided

 

 

However there are two options that the Antenuptial Contract affords the parties, being:

 

 

-Out of community of property without accrual

 

 

The “straightforward” Antenuptial Contract: Very simply put, the estates (assets and liabilities) of the parties both before and during the marriage remain completely separate, and at dissolution of the marriage (by death or divorce) the parties will only be entitled to the assets that they have accumulated in their own names.

 

 

Con’s: The spouse who earns less/not at all during the marriage/with a lesser estate, at dissolution of the marriage, will be at a disadvantage in the sense that he or she is not entitled to share in the accrual that the other party’s estate have amassed during the subsistence of the marriage.

 

 

Pro’s: Parties with substantial estates and/or income of their own and/or who are getting married at a later stage of their life and/or whose second marriage it is with children born from previous marriages, tend to favour this option as it is the most “uncomplicated” option.

 

 

-Out of community of property with accrual

 

 

(Accrual = growth)

 

 

It works exactly the same way as the “without accrual" option in the sense that the parties

 

 

1.are married out of community of property;

 

 

2.are not liable for the debt of the other party;

 

 

3.retain their separate estates during the subsistence of the marriage.

 

 

The difference comes in at dissolution of the marriage by death or divorce, where the right to share in accrual becomes enforceable. In practice this works as follows:

 

 

 

 

 

1.The parties declare a net (total value of estate after liabilities have been deducted) commencement value of their respective estates in their Antenuptial Contract;

 

 

2.This net commencement value is deducted from the net end value of their estates at dissolution of the marriage (the total value of the estate after their liabilities have been deducted).

 

 

3.The following will also be deducted and therefore not being taken into account for purposes of calculating the accrual:

 

 

3.1Inheritances, legacies and donations that accrue to the parties during the subsistence of the marriage;

 

 

3.2Donations between spouses;

 

 

3.3Delictual damage for non-patrimonial loss; and

 

 

3.4Assets excluded in terms of the Antenuptial Contract

 

 

4.After all the above has been deducted, the amount that remains are the parties’ accrual. For example: The first spouse’s estate shows an accrual of R800 000 while the second spouse’s estate shows an accrual of R400 000.

 

 

5.The spouse whose estate has shown the lesser growth, is entitled to share in half of the difference between the two accrual amounts, in other words: R800 000 minus R400 000 = R400 000. R400 000/2 = R200 000. Therefore, the second spouse has an accrual claim of R200 000 against the first spouse.

 

 

Pro’s:

 

 

-The parties are protected against the creditors of the other spouse.

 

 

-The parties get share in the profits made during the marriage, while retaining their estates which existed on the date of marriage.

 

 

-The parties retain their full contractual capacity.

 

 

Cons:

 

 

-Spouses need to keep record of their cash flow, which entails more accounting.

 

 

It is important to bear in mind that an Antenuptial Contract determines whether parties are married out of community of property and therefore regulates their matrimonial property regime. It does not determine how the assets of a party are distributed at death. In this case a Will is of the utmost importance to ensure that the party’s estate is distributed according to his/her wishes.

 

 

Especially young engaged or married couples who are just starting out, mistakenly believe that it is not worth making a Will if they do not have many assets. This cannot be further from the truth. It is worth making a Will, even if it only determines how a single asset should be distributed.

 

 

It is also vital to note that once an Antenuptial Contract has been registered for the parties and they are married, the stipulations of the Contract cannot be changed that easily and entails a long and expensive process. A Will on the other hand can be changed very easily and on a regular basis when the circumstances of the party changes.