Planning for your wedding is rather exciting. Whilst, much time and energy is directed at planning the wedding itself, it is vital that focus also be directed at planning for your marriage and in particular, the proprietary consequences of your marriage.
No one goes into a marriage contemplating a divorce but when you consider that the Antenuptial Contract (ANC) governs what will happen to your assets and liabilities upon divorce or death and it regulates whether creditors have any rights to attach assets belonging to you or your spouse, it makes sense that proper consideration be given to whether or not an ANC would be appropriate in your circumstances and if so, the particular contents of your ANC.
The consequences of failing to conclude an ANC prior to your marriage is that your marriage will automatically be one in community of property
In a marriage that is ‘in community of property’, all assets belonging to either of the spouses at the time of the marriage, or acquired by them at any time thereafter, ceases to be their private property and becomes part of a joint estate in which each of the spouses has an equal, undivided share. The same applies to their debts. On termination of the marriage (whether by divorce or death), the spouses are each entitled to a half-share of the joint estate and they are jointly liable for any liabilities.
A major disadvantage of this marriage system is that, if one spouse becomes insolvent, anything in the joint estate may be attached and sold off to pay creditors. Also, although both spouses have equal powers with regard to inter alia the disposal of assets and management of the joint estate, neither spouse may perform certain acts without the written consent of the other spouse. These acts include inter alia purchasing, selling and/or mortgaging immovable property.
The first type of ANC is without the application of the accrual system. The ANC will clearly state that the accrual system is expressly excluded. The result of this, is that there is a complete separation between the party’s respective assets, those acquired prior to their marriage as well as those acquired during the marriage. There will not be any form of sharing of assets at the dissolution of the marriage. Each party may dispose of their own assets as they choose.
The second type of ANC, specifically includes the operation of the accrual system, in that each party’s property remains separate for the duration of the marriage, but at the time of death or divorce their estates are adjusted so that the difference in accrual between the two estates is divided equally. The advantage of this system is that on termination of the marriage, both parties’ contributions to the marriage are recognised in that they each have an equal share in proprietary gains made during the marriage.
In respect of our Muslim clients, please note that we are living in a country where the Laws are not Islamic, we need to ensure that we are aware of the consequences that follow once we are married. Our law does not currently recognise an Islamic marriage (Nikaah), so the couple who make Nikaah will need to legally register their marriage at the Department of Home Affairs. Prior to registering the marriage though, the couple will have to enter into an ANC, failing which, their marriage will be automatically registered in community of property. It should be noted that an ANC, without the application of the Accrual system, is the correct Islamic way of marriage.
An ANC must be signed, in duplicate, before the marriage and must be signed in the presence of a Notary and two competent witnesses. The Notary will then register the contract in the local Deeds Registries Office. Registration must be affected within three months of the date it was signed by the Notary.
In the event that the ANC is not registered timeously, the couple can approach the High Court in terms of the Deeds Registries Act by means of a joint application to grant condonation for the late registration of the ANC after the conclusion of the marriage.
If you do intend to get married, please contact us to consult with our Notary Public, to discuss your particular requirements and to ensure that you fully understand the legal implications. Our rates are highly competitive.
BY: FATIMA SALAJEE