Antenuptial contracts: With or without the accrual system?
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Antenuptial contracts: With or without the accrual system?
The default matrimonial property law regime in South Africa is a marriage in community of property. This happens by law if parties sign a marriage register (which is usually signed on the day of the wedding) without having signed an Antenuptial Contract before signing the marriage register. The parties to such a marriage share one estate, i.e. all debts and assets are jointly owned by both parties.If parties decide to marry out of community of property, they have to enter into an Antenuptial Contract to separate their respective estates.
What is an antenuptial contract?
An Antenuptial Contract is an agreement in terms of which the parties determine that they want their marriage to be out of community of property. When preparing the Antenuptial Contract, one of the important decisions is whether the accrual system (explained below) will be applicable to their matrimonial property regime or not. An antenuptial contract is prepared by a Notary Public and signed by both parties and two witnesses in the presence of the Notary Public. The signed Antenuptial Contract has to be registered in the Deeds Registries Office within 3 months after date of signature. The date of signing the marriage register and/or the wedding date is not relevant in this context.
What is the accrual system?
The accrual system is a regime that implements a formula whereby the party whose estate shows no accrual during the marriage, or a smaller accrual than the estate of the other, or in the case of the death of the first mentioned party, his or her executor, will have a claim against the other party or his or her estate for an amount equal to one half of the difference between the accruals of the respective estates of the parties. For purposes of determining the accrual of each party, they will be expected to declare their asset values at the commencement of the marriage, which will be deducted from their asset value at the termination of the marriage, to determine the accrual.
The accrual claim only vests at the dissolution of the marriage and shall not during the subsistence of the marriage be transferable or liable to attachment or form part of the insolvent estate of either party.
Whether or not to include the accrual system in an Antenuptial Contract is a personal choice of the prospective spouses.
It is important that both parties consult with the Notary Public preparing the Antenuptial Contract so that they are both fully appraised of the consequences of the different regimes.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
Author: Welgedacht Properties
