Marriage has many implications on one’s life, both personally and economically. It is therefore imperative that the parties carefully consider which matrimonial property regime they wish to be applicable to their marriage.

What is an Antenuptial Contract

An antenuptial contract is a contract which is concluded between two prospective spouses prior to their intended marriage and which embodies the matrimonial property regime that shall be applicable to the marriage as well as any modifications thereto made by the parties. The parties may include any terms and conditions in the antenuptial contract which they wish to be applicable to their intended marriage, provided that such terms and conditions are not illegal, immoral or contrary to public convictions.

There are two Matrimonial Property Regimes in South Africa, namely:

1. Marriage in community of property; and
2. Marriage out of community of property.

1. Marriage in Community of Property

If parties enter into a marriage without first concluding an antenuptial contract arranging the type of matrimonial property regime which will govern their subsequent marriage, then in that event their marriage will be regarded in terms of the common law as being in community of property. The legal consequence arising from this is that both spouses will be joint owners and administrators of an undivided share in all assets owned by each of them separately prior to the marriage and all assets which they acquire during the subsistence of the marriage. Similarly, all premarital and post-marital debts or liabilities also become communal, the result being that creditors may recover their claims against the joint estate.

Certain assets do not form part of the joint estate, namely:

• Assets which are specifically excluded from community of property in terms of an antenuptial contract;
• Donations and inheritances which are expressly excluded from community of property by the testator/testatrix or donor;
• Assets acquired subject to a fideicomissum or usufruct. However, the fruits of such assets will form part of the joint estate unless such fruits are also specifically excluded therefrom;
• Any amount recovered by a spouse by way of damages for non-patrimonial loss;
• Certain life insurance policies.

Since both spouses are joint owners and administrators of the communal estate, various transactions which bind the communal estate require the consent of both spouses prior to transacting.

2. Marriage out of Community of Property

2.1 Marriage out of Community of Property excluding the Accrual System

The primary purpose for electing a matrimonial property system whereby the marriage will be out of community of property, profit and loss also explains the nature thereof, namely that each spouse will own and control his or her own estate assets without interference or control by the other spouse. The estate of each spouse consists of all the assets he or she owned prior to the marriage and any assets acquired by each spouse subsequent to the marriage. Such a matrimonial property system means that each spouse is personally liable for his or her own debts and obligations existing before the marriage and arising thereafter.

2.2 Marriage out of Community of Property incorporating the Accrual System

The accrual system is automatically applicable to marriages concluded out of community of property and with exclusion of community of profit and loss, unless the accrual system is expressly excluded in the antenuptial contract. In terms of the accrual system spouses are entitled to share equally in the “net accrual” of their respective estates upon dissolution of the marriage either by death or divorce. The term “accrual” is used to denote the net increase in value of the estate of a spouse since the date of the marriage. Because the right to share in accrual is exercisable only upon dissolution of the marriage, such right is not transferable and cannot be attached by creditors during the subsistence of the marriage. During the subsistence of the marriage to which the accrual system applies, two separate estates still exist and each spouse manages and controls his or her own estate.

Calculation of Accrual and Net Accrual

The accrual of a spouse’s estate is calculated by subtracting the net asset value of his or her estate at the commencement of the marriage from the net asset value of his or her estate upon dissolution of the marriage. This can be exemplified as follows:

If spouse A had a net asset value of R10 000-00 at the commencement of the marriage (his “initial value”) and a net asset value of R100 000-00 at the dissolution of the marriage (his “end value”) then the accrual to his estate is R90 000-00. If the initial value of the other spouse B was R20 000-00 and her end value R200 000-00, it follows that the accrual to her estate is R180 000-00.

Net accrual is calculated by subtracting the “smaller” accrual from the “larger” accrual. In the above example: R180 000-00 – R90 000-00 = R90 000-00. In accordance with the Matrimonial Property Act, A (the spouse with the smaller accrual) acquires a claim against B (the spouse with the larger accrual) for one half of the net accrual (namely – R45 000-00).

The initial value of a spouse’s estate must be declared either in an antenuptial contract or a separate statement made not later than six months after the marriage, failing which the initial value will be deemed to be nil.

Various assets are excluded from the determination of the accrual of a spouse’s estate, and they are:

• Any amount which accrued to the estate by way of damages other than damages for patrimonial loss;
• Any asset which has been expressly excluded from the accrual system in terms of the antenuptial contract of the spouses as well as any other asset which a spouse has acquired by virtue of his or her possession or former possession of such asset;
• An inheritance, a legacy or a donation which accrues to a spouse during the subsistence of his or her marriage as well as any other asset which he or she acquired by virtue of his or her possession or former possession of such inheritance, legacy or donation, except insofar as the spouses may agree otherwise in their antenuptial contract or insofar as the testator/testatrix or donor may stipulate otherwise;
• Donations between spouses other than a donation mortis causa (after death).

If you have any questions regarding the legal side of marriage, visit our Antenuptial Contracts category to contact the lawyers listed there.

This article was posted by Celebration.co.za - South Africa Wedding Guide.