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Ante-Nuptial Contracts: In Community or Out of Community of Property

Ante-Nuptial Contracts are also known as ANC or Pre-Nup. This is a contract that is signed before marriage; ante meaning before, and nuptial meaning marriage.

ante-nuptial-contracts

Signing or not signing an ante-nuptial contract will dictate the property regime that will govern your marriage. By property, we aren’t just talking about homes, but rather anything that a person can own. A car, house, guitar, laptop, phone, pet, and so on. So signing or not signing an ANC determines what happens to everything you each own.

In South African law, when an ante-nuptial contract isn’t signed, the default property regime is “In Community of Property”. This is true, whether you have separate bank accounts or own separate businesses or not. If you don’t want to be married in community of property, remember that you need to sign an ante-nuptial contract before you get married.

Let’s take a look at the three property regimes and how they each affect you and your spouse:

In Community of Property

Essentially, this property regime means that there is one estate co-owned between two spouses. Both spouses will be liable to one another’s debts. When we talk about an estate, we aren’t just talking about a piece of land or a house. An estate is everything that you own.

Most couples think that this is the best option, because surely divorce isn’t on your mind, so you want to own everything together. “What’s mine is yours”, right? Well, when you share everything, you share everything, including one another’s debt.

An innocent party can be affected by one spouse’s business going bankrupt. All shared assets can be seized by the court to pay creditors the money that is owed to them, even if the other spouse wasn’t involved in the business at all.

Out of Community of Property – Without Accrual

In this property regime, two people have separate estates and legally speaking, one can’t be held liable for the debts of the other.

Essentially, this is a “what’s mine is mine” situation.

Out of Community of Property – With Accrual

Although each spouse will have a separate estate, all assets acquired by the couple since the start of the marriage will be split 50/50 upon dissolution of the marriage by death or divorce.

Essentially, you will be protected from one another’s creditors, but the accrual system allows you maintain the sense of sharing.

Ante-nuptial contracts have been given a bit of a bad name, with many people assuming that signing such a contract means that you don’t have high hopes for your marriage or that you don’t trust each other. It is still possible to share everything while owning separate estates legally.

For example, I have access to all of my husband’s bank accounts and I can send myself money whenever I need to. The bank accounts belong to him legally, and should he accumulate debt, he is the one liable for that debt. Legally, the bank cannot take any of my assets in order to account for my husband’s debt. In our minds, though, the money we each earn is shared. What’s his is mine and what’s mine is his, in our hearts.

If you would like more information about Ante-Nuptial Contracts, I’d highly recommend getting in touch with my friends at Gunstons.

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4 comments

  1. Charn says:

    Thanks so much for this! 🙂 Can you perhaps share some details on how you went about getting your contract drawn up? (i.e. the process)

  2. Robyn says:

    Good one Kelly! Also worth bearing in mind is that when you die, if the marriage was in community of property, all assets are frozen pending working out the estate of the deceased spouse. That can mean you’re stuck without access to your money or assets until it’s sorted.

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