Key Benefits of Antenuptial Contracts


Whether you get an antenuptial contract (ANC) or go with the traditional in community of property (COP) route there are important facts that you need to cosider before taking the plunge.

Marriage is one of life’s most serious commitments, and is upheld as such in law as much as n religion. A whole range of laws govern the way in which two people are joined in marriage, and cover many different legal changes that take place, affecting both parties. In order to ensure that both partners in a marriage are legally protected, as well as to clarify the changes in ownership, property rights, and many other aspects of each individual’s personal life that take place when they get married, various legal documents can be drafted that explain the agreement entered into by the newlyweds upon their marriage.

One document that is highly recommended by lawyers is the antenuptial contract. This legal documents serves to clarify the property ownership rights of each individual in a marriage prior to being legally married. Under South African law, couples who are married without prior closure of an antenuptial contract will automatically be married ‘in community of property’. This means that the property owned by each individual prior to marriage becomes jointly owned thereafter.

In such a case, both husband and wife share ownership in a joint estate that is comprised of all property brought into the marriage as well as everything that is accrued for as long as the marriage lasts. In addition to joint ownership of property, married couples are jointly responsible for any debt or liability the joint estate of the marriage might accrue.

married couple

The above explanation serves to highlight some potential pitfalls that may await marriages that fall into this category. While most happy marriages can continue to prosper indefinitely when the couple is married in community of property, which promotes a sense of shared responsibility and equality in the marriage, many troubles have the potential to arise in such as situation.

Insolvency risks for married couples

One obvious problem with this arrangement is that if one partner runs into financial trouble, the other ends up being equally liable for his or her debt. This eventuality can cause tension in the marriage, and may even lead to separation or divorce.

Even worse (for some), if one partner becomes insolvent, any contents of the joint estate can be sold to pay creditors – even items that originally belonged to the individual who is not currently in financial difficulty. In serious financial situations, this can even lead to both parties going bankrupt, unless one is protected by property that does not form part of the joint estate.

A marriage ends up being a business deal: no matter how long or short it is, somebody owes somebody money.

Goldie Hawn

Division of assets in community of property due to divorce

Whether divorce is arrived at due for financial or personal reasons, this process can become extremely stressful and complex for couples who have been married in community of property. Once married, both individuals’ property becomes jointly owned, and therefore cannot be legally separated again on the dissolution of the marriage. This effectively means that, while each party is entitled to a half share of the marriage’s jointly owned estate, there is no specific designation of who will receive what in terms of property and other material assets. The disputes that follow, regarding which individual will receive what share of money, property, and personal belongings from the joint estate of the marriage, can be drawn out and painful to say the least, and both parties often end up walking away unsatisfied with their share.

Basic idea of antenuptial contracts

The antenuptial contract is so highly recommended by lawyers due to its effectiveness in eliminating disputes like these before they even begin. Couples who choose to marry in this way execute such a contract before their marriage is legally certified in order to ensure that both parties understand and agree to the property rights it entails. Essentially, the antenuptial contract is an agreement stating that each individual’s respective estate remains under their sole ownership, and that the debts and liabilities of each person remain their sole responsibility. In this way, each spouse in a marriage can remain financially whole, and will not be affected by the finances of the other unless he or she chooses to do so. The legal phrasing used to denote this relationship describes such a couple as married ‘out of community of property’ and ‘out of community of profit and loss’ accordingly.

Antenuptial agreements with or without accrual

Antenuptial contracts can be personalised to a significant extent, and can include any legal provision provided that it does not fall outside the confines of the law, cannot be considered to be immoral, and does not go against public policy. The parties involved in the marriage must also specify if they do not want the accrual system to apply. This determines whether or not the two individuals who are getting married agree to share in the accruals, or profits, of the marriage (in other words, all financial and material gain acquired by either party during the marriage itself). If no indication of this is given, the accrual system will automatically apply.

In drafting the antenuptial contract, the two parties to a marriage can decide on certain assets that will not become part of the joint estate, as well as those that will. In the event of the dissolution of the marriage, such items will be excluded from the calculation carried out to determine the net value of the jointly owned assets that must be divided between the individuals. In addition to specific assets, each individual may also choose to exclude a certain amount of money that they do not wish to share as part of the joint estate. This is referred to as a ‘commencement value’.

In summary

While no one enters into a marriage thinking about divorce, the reality is that all marriages change over time, and some may even fall apart. The antenuptial contract is not only a way for the individual parties to a marriage to protect themselves financially, but is also a vital means of simplifying the separation process, reducing the stress and pain that this process can cause by keeping petty disputes over money and property to an absolute minimum.

Carefully drafting such a contract with the help of an attorney can even help to increase the bond of trust in a marriage, as each party knows exactly what they are getting into. It is therefore one of the most important legalities to consider when getting married.