Antenuptial Contract VS Marriage In Community Of Property – Which Contract Is Best Suited For You?

In this article, we will discuss some high-level points of an antenuptial contract, marriage in community of property, and the advantages/disadvantages between the two.

Here is an overview of what to expect…

So let's dive straight into it!

1. What Is An Antenuptial Contract (ANC)?

The legal definition of an antenuptial contract or antenuptial agreement according to Merriam-Webster dictionary is, "an agreement made between a couple before marrying in which they give up future rights to each other's property in the event of a divorce or death".

This simply means that any assets or liabilities that were brought into the marriage by you is yours and any assets or liabilities that were brought into the marriage by your spouse belongs to your spouse.

However, there are two basic types of antenuptial contracts that a couple planning to wed can enter into i.e. one with accrual and one without accrual.

Let's take a look at both a little more in detail…

2. Antenuptial Contract (ANC) Without Accrual

In an antenuptial contract without accrual, all assets and liabilities of the spouses are separate.

This means that from a fiscal point of view, each partner's estate remains solely theirs before, during and after the marriage i.e. in the case where the marriage ends in a divorce or the death of a partner.

2.1. Benefits Of ANC Without Accrual

• You and your spouse will be seen as separate legal entities and as a result, have separate commercial identities.
• All assets of the spouses are kept separate and protected from one another's creditors. This includes everything earned, bought, inherited or acquired in any way (salaries, inheritance, vehicle, property, furniture, etc). As a result, your partner cannot claim for any of your assets at the end of your marriage.
• All liabilities of the spouses are kept separate.
• You don't need consent from your partner to enter into any agreements, such as the purchase or sale of a property or business. You can control and grow your assets independently.

2.2. Disadvantages Of ANC Without Accrual

• If you are a stay at home parent and your marriage ends as a result of death or divorce, none of your partner's assets will be shared with you. This means that you will be in a poor fiscal position especially if you were depending on your spouse financially.
• Legal costs are associated with drafting up an antenuptial contract.

3. Antenuptial Contract (ANC) With Accrual

In an antenuptial contract with accrual, all assets and liabilities of the spouses are kept separate going into the marriage, and the partners get to share the assets and liabilities they have acquired together during marriage upon divorce or death of a spouse.

Certain assets such as an inheritance or donations between the parties can be excluded from the accrual system.

3.1. Benefits Of ANC With Accrual

• You and your spouse will be seen as separate legal entities and as a result have separate commercial identities.
• All assets of the spouses before marriage are kept separate and protected from one another's creditors. As a result, your partner cannot claim for any of your assets that have been accounted for in the ANC at the end of your marriage.
• All liabilities of the spouses before marriage are kept separate.
• You don't need consent from your partner to enter into any agreements, such as the purchase or sale of a property or business. You can control and grow your assets independently.
• If you are a stay at home parent and your marriage ends as a result of death or divorce, you will receive your share of the assets accrued during your marriage.

3.2. Disadvantages Of ANC With Accrual

• If you are the partner that grew the assets substantially during your marriage, you will be required to split the profits equally with your partner upon divorce or death.
• Legal costs are associated with drafting up an antenuptial contract.

4. Marriage In Community Of Property

A marriage in community of property is the default civil marriage agreement that a couple enters into when they marry without an antenuptial contract being drafted between them.

In this type of agreement, all assets (with the exception to inheritance) and liabilities acquired before and during the marriage will form part of the joint estate.

Upon dissolution of the marriage, the joint estate will be divided in two and be shared equally between the spouses.

4.1. Benefits Of Marriage In Community Of Property

• The spouses do not have to enter into an antenuptial contract before getting married, and therefore you save on legal costs.

4.2. Disadvantages Of Marriage In Community Of Property

• You and your spouse will have a joint commercial identity resulting in all assets and liabilities being shared equally.
• All assets of the spouses before and during the marriage are not protected from one another's creditors.
• Both spouses are jointly liable for each other's debts.
• You will require consent from your spouse to enter into certain contracts such as a credit agreement or the purchase of a property.

5. Infographic: Antenuptial Contract VS Marriage In Community Of Property

6. How To Register An Antenuptial Contract In South Africa?

• First, have a discussion with your partner and decide that you would want to enter into an ANC agreement.
• Contact a qualified and admitted notary public.
• Together with your partner discuss the type of ANC you want to enter into.
• Negotiate all the costs involved in writing up the ANC.
• Have the notary public draft the ANC. You will have to declare the value of your assets upon entering the marriage and provide him/her will all the relevant details.
• If you are happy with the ANC, you and your partner will have to sign the agreement before the notary public and two witnesses.
• Once signed, your contract will then be lodged with the relevant Registrar of Deeds.
• It takes approximately one to two weeks for the registration to take place.
• From the date of lodgement, it takes between 7 to 10 days for the registration to take place.
• After registration and copies of your original contract have been made at the Deeds Office, the notary public will then return the original contract to you for your safekeeping.

7. Frequently Asked Questions (FAQs)

7.1. What Is The Difference Between Antenuptial And Prenuptial Agreement?

An antenuptial agreement is also commonly referred to as a premarital agreement, prenuptial agreement or prenup.

7.2. When Must An Antenuptial Contract Be Registered?

Typically, within 3 months after the notary public has signed the contract.

It is advisable to have the antenuptial contract finalised well before the marriage, as your relevant marriage officer will require a letter from the drafting attorney confirming that you have entered into an ANC.

7.3. What Does An Antenuptial Contract Cost In South Africa?

The cost of an ANC would depend on the complexity of the contract being drafted and the experience of the attorneys involved in the process. An approximate cost of a basic ANC would be around R3500.

7.4. Can The Marriage Contract Be Changed After Marriage?

Yes, this is called a postnuptial contract. You can change from an "in community of property" agreement to an "out of community of property" agreement.

The procedure involves a joint application to the High Court by both spouses and can be quite costly.

8. Conclusion

Marriage is a wonderful and joyous occasion for any couple.

We as people are always hopeful on having a fairy tale marriage that lasts forever, however, in reality, we forget that the ending of a marriage is inevitable, whether by divorce or tragically by the death of our loved one.

No matter which of these circumstances you will end up facing, it's best that you are informed on the type of marriage agreement you can enter into at the very onset.

To decide which civil marriage contract is best suited for you, whether in community of property or an antenuptial contract, you will have to discuss these options in detail with your future wife or husband to be, deliberate the pros and cons of each contract type, consider both your financial positions and also seek legal advice from an expert.

Having these considerations may save you a lot of financial troubles when one's marriage ends.

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Disclaimer: We are not a legal service provider. You may use this information discussed in this article as a basis for marriage contract discussions but you should always seek legal advice from the subject matter expert.