Marriage and the Antenuptial Contract

The decision to marry is the most important one that you will make.  The consequences of your marriage on your property rights and obligations, is far reaching and after you are married, difficult to change.  Preparation for marriage is a joyful but emotional time, and it is important that correct decisions are made before your marriage. The problem is that it is very often difficult if not impossible, to predict what life has in store next week let alone five, ten, or fifty years time.

It is ironic that at the very time of the greatest happiness in your life, you should be thinking of “what happens if I or my spouse should die” or “what happens if we divorce”. It is something that you just do not want to think about. However, it is a time when you must consider the future, realize that you have a spouse to share your life with, and the future may bring children.  Their wellbeing is important.

You must carefully consider whether you require an Antenuptial contract, a will, life insurance, retirement annuities, and generally look ahead to the good and possibly hard times.

This article cannot deal comprehensively with all the aspects of your future.

An Antenuptial Contract must be signed before marriage, and registered in the deeds office within three months of it having been signed.  As it is registered in the deeds office, it is a public document which can be accessed by anyone.

The property consequences of your marriage are governed by the domicile of the husband at the date of marriage.  Generally, a person takes on the domicile of his or her father at the date of their birth.  This is called your domicile of birth or origin.  Your domicile of birth can change if, while still a minor, your father changes his domicile.  There is a presumption that you have not changed your, domicile of birth.  In order to change your domicile of birth, a conscious and, at that time, a definite decision must be made to change that domicile.  For example, you may travel overseas, get a new job, and settle down.  You still believe that one day you will returned to South Africa.  In these circumstances you have not changed your domicile of birth.  On the other hand, you may emigrate, find permanent employment, and make a definite decision that your new country of choice is now your permanent home.  In this case you have changed your domicile of birth and your domicile is now the county where you have your new home.

If parties should marry, they take the domicile of the husband.  This means that if the husband is domiciled in England at the time of the marriage, then the laws of England will govern the property consequences of the marriage.  The place where the marriage ceremony takes place is not relevant.  In the deeds office, the parties will be described as-“married, which marriage is governed by the laws of England.”  The laws of England are in many ways similar to being married out of community of property.  However, as the registrar of deeds cannot keep track of the laws of each country in the world, especially where those laws change, and may be different in various states in that country such as the United States of America, he requires a person married by the laws of a foreign country to be assisted by his or her spouse.  That assistance does not make that spouse an owner or co-owner.

If, at the time of your marriage, you are domiciled in South Africa, the common law provides that you are married in community of property.  Domicile at the date of your marriage is the only determining factor.

Marriage in community of property.

In the commercial world in which we live, marriage in community of property has a number of shortcomings and problems.

The assets of the spouses are pooled in a joint estate, meaning that if one of the spouses has financial difficulties, then a judgment creditor can attach and sell in execution the assets of the joint state of both spouses. (There are very limited exceptions to this – where a spouse receives an inheritance or donation which specifically excludes the community).  There are other problems with marriages in community of property.  For example if one of the spouses should die, then the whole of the joint estate is wound up at a cost higher than if only the deceased’s estate is being wound up.

Immovable Property must be purchased by both spouses married in community of property and the name of both spouses are reflected on the Title Deeds as being married in community of property to each other.  When selling a property, both spouses married in community of property must sign.  Both spouses must also signed when passing a mortgage bond over a property or when signing as surety.

Because of the shortcoming of a marriage in community of property, it is recommended that parties about to be marry should enter into an Antenuptial contract.

All Antenuptial contracts must be signed before an attorney who has also been admitted as a Notary Public.  He takes additional exams to qualify as a Notary Public.  Once the Antenuptial Contract has been signed by the parties, before two witnesses and the Notary Public, the Notary Public must send it to agents in Pietermaritzburg (if signed in KwaZulu Natal) to enable it to be registered in the deeds office.

Generally speaking, there are two types of Antenuptial contracts.

The Antenuptial contract with Accrual.

Before the Matrimonial Property Act of 1984, marriage out of community of property (with an Antenuptial Contract) was in effect without accrual.  If parties became estranged and decided to divorce, the civilized, and cheapest way of dealing with their property rights and obligations was to enter into a settlement agreement. In a divorce situation, this is still the best way of dealing with the property rights, maintenance, custody, and access to children. However, when parties cannot reach a settlement, a court of law must make a determination.  If a spouse is not working, or if his or her income is insufficient, he or she can claim maintenance for himself/herself and children. Except in exceptional circumstances, the wife would be awarded the custody of the children and maintenance for them. The best interests of the child is paramount.

This system was regarded as being too rigid and two other categories of Antenuptial contracts were established in the Matrimonial Property Act of 1984.

The Matrimonial Property Act.

The accrual system:

The Antenuptial Contract provides that the assets owned by the intended spouses at date of marriage is excluded from the accrual and remain the asset of the intended spouse who owns them. Sometimes intended spouses bring into the marriage depreciating assets which very soon will be of no value or they my decide to reflect the assets which they bring into the marriage as Nil - Nil.  This means that on termination of the marriage by death or divorce, the assets will be divided equally.  To achieve this, the assets of the spouse are valued.  The spouse whose assets are worth more than the other will share the excess with the other spouse so that they will both take out of the marriage assets of equal value.  It is important to realise that during the marriage, the assets of the spouses are kept separate so that creditors of the one cannot attach the assets of the other.

Where the parties expressly record in the Antenuptial Contract that they exclude assets from the accrual, on termination of the marriage by death or divorce, only the assets which are accrued (earned or accumulated) during the marriage will be split half/half as described above.

Remember, it is important to draw up a will and sign it.  When children are born, it is essential to draw up and will and sign it.  Professionals should draft wills.  Wills drafted by those with little or no experience usually lead to problems.

Marriage by Antenuptial contract, with the exclusion of the accrual system:

If the Antenuptial contract explicitly excludes the accrual, this means that the assets of the intended spouses will remain separate at the time of the marriage, separate during the marriage, and separate on termination of the marriage.  This has many features of the Antenuptial Contract prior to the Matrimonial Property Act, 1984. 

Should intended spouses elect to be married by Antenuptial Contract with accrual or alternatively without accrual?  The answer to this question is sometimes very difficult. As pointed out above, it is very difficult to predict the future.  You can only assess what is fair and reasonable at the time. Social norms are changing. Whereas the husband was usually the main breadwinner, this is not necessarily true today.  In any event, the contributions of the husband and wife to the marriage can be different although each just as important. Giving birth to children, nurturing them and looking after them during their formative years, is as important as going out, establishing a career, and creating wealth in order to look after the family.

It is therefore often regarded as being fair that parties enter into an Antenuptial contract with accrual.

Where parties have established a business with partners or co-directors or co-members, it is possible in an Antenuptial Contract with accrual to exclude that business and other existing assets from the accrual.

Parties sometimes prefer to keep their assets separate both during marriage and on termination.  It is possible to register properties in the joint names of spouses or in the name of one of them, take out Life Insurance policies, Retirement Annuity Policies and Endowments to ensure, as far as possible, that spouses are financially independent and secure when it comes to retirement.  If a spouse owns a business for example, is it fair to exclude all assets, liabilities and capital of the business not only at the time of the marriage, but also during the marriage so that on termination of the marriage by death or divorce, the party owning that business is entitled to it in its entirety.  To provide otherwise, could possible wreck the business, especially where the other spouse is not involved in the business and has no expertise in running the business.

What do I recommend?

1. Where intended spouses are starting out in life, an Antenuptial Contract should be entered into with accrual.  Where, prior to the marriage, there is immovable property, other appreciating assets or a business owned by an intended spouse, these should be excluded from the accrual.

2. Where intended spouses have established their individual wealth, (sometimes a second marriage) the Antenuptial Contract should exclude the accrual system.

3. The intended spouses should make wills especially when children come along.

4. Make sure you invest for your future.  Pay off your bond as soon as possible.

5. Don’t get divorced.

Our fees and disbursements:
Our fees and disbursements for taking instructions, drafting ANC, registration in the Deeds Office, disbursements and VAT is R1 100.00.