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Different Types of Marriage Contracts

The matrimonial property regime, or ante nuptial contract you choose will affect your and your spouse’s future, specifically in relation to your assets. You must exercise an informed choice as your choice will determine your property rights during your marriage, as well as if it is dissolved — either by death or divorce.

It is imperative that you elect your matrimonial regime (prenuptial contract) prior to the marriage, as changing it after the fact is a difficult, costly and time-consuming procedure.

What are your options?

A marriage contract in community of property or out of community of property.

In the case of out of community there is the option of with or without the accrual system.

What steps do you follow to let a particular system apply to your marriage?

Should you marry without entering into any form of ante nuptial contract (ANC) you are automatically married in community-of property in terms of South African Law.

Should you wish to be married out of community of property an ANC has to be entered into and attested before an attorney who is a Notary Public prior to the marriage. The ANC will then be lodged in the Deeds Registries Office for registration.

An ANC is a contract entered into between you and your future spouse prior to getting married, which stipulates the terms and conditions of the exclusion of community of property. Any provision may be included in your ANC, provided it is not contrary to the law. The accrual system will apply should your ante nuptial fail to expressly exclude the accrual system.

Which marriage contract option is the best?

One specific system is not necessarily the best for all couples. Which marriage contract option is best will depend on the individual needs and circumstances of each couple.

Brief outline of the different marriage contracts, or matrimonial property regimes

Marriage in Community of Property

Before Getting Married

Each spouse has separate estates.

On date of Marriage

Both spouses estates join into one joint estate and each spouse is the owner of on undivided ½ share of the joint estate.

During the Marriage

  • Any increase or decrease in the assets of the spouses will benefit or prejudice the entire joint estate.

  • Written consent of both spouses is required for certain important transactions such as those relating to fixed property, suretyship & credit agreements.

End of Marriage by Death or Divorce

The joint estate is halved and each spouse is entitled to an undivided ½ share.

Advantages

  • Fair and promotes legal and economic equality.

  • During the marriage and on its dissolution both partners are entitled to a half share in the joint estate and each one has equal powers of administration.

Marriage out of Community of Property

Excluding the Accrual System

Before Getting Married

Each spouse has separate estates.

On date of Marriage

Each spouse’s estate remains separate.

During the Marriage

Any increase or decrease benefits or prejudices the relevant spouse only.

End of Marriage by Death or Divorce

Each spouse retains his/her own assets and own accrual - no sharing unless ANC compels donations or court orders transfer of assets.

Advantages

Protects own estate from insolvency.

Including the Accrual System

Before Getting Married

Each spouse has separate estates.

On date of Marriage

Each spouse’s estate remains separate.

During the Marriage

Each spouse retains control of his or her own property, builds up his or her own estate and each is responsible for his or her own debts. Therefore, any increase or decrease benefits or prejudices the relevant spouse only but at the end of the marriage the spouses share equally in the growth of each others estates (“Accrual”).

End of Marriage by Death or Divorce

Application of the Accrual: look at initial value of both estates (before marriage} and the end value of both estates (end of marriage). The spouse with the larger estate will give the other spouse 1/2 the difference of the two estates (net accrual).

Advantages

  • Fair as there is equal sharing in the growth of each other’s estates at the end of the marriage.

  • Protects one estate from insolvency.

  • During the marriage the competence of the spouses to deal with their property is not limited in any way, provided that the one does not or will not seriously prejudice the right of the other to share in the accrual.