Have you decided what type of Ante Nuptial Contract you want?
You have decided on the venue, the cake and centerpieces but have you decided what type of Ante Nuptial Contract you want?
The Monster in the Closet in Perspective
Thinking about the dissolution of your marriage before you have even said, “I do,” is awkward and unromantic. No one gets married with the intention of getting divorced. Even though this might not be the case with you and your prospective spouse, the fact of the matter is that life happens, situations change, people change and the dissolution of your marriage does not only mean divorce but also death. It’s therefore imperative that you decide on a marital regime or contract that works best for you.
The best decision is an informed decision and therefore the purpose of this article is to give you a short, yet, informative overview of the different marital regimes as well as the advantages and disadvantages of each.
What’s your Best Fit?
There are basically three options to choose from:
- Let us start with Marriage in Community of Property – profit and loss. This means that you did not conclude and register an ante nuptial contract before getting married. You therefore have a joint estate belonging to both spouses in equal undivided shares. The advantages of this system are that it affords spouses with greater economic equality. Spouses thus share in each other’s wealth both during the marriage and upon dissolution thereof. The disadvantages are that the spouses have no protection against the insolvency of the other spouse; therefore you both will be considered insolvent, which could lead to unfavourable restrictions on your legal status. This type of regime also restricts your contractual capacity; it’s a joint estate, so, both parties must sign and consent to enter into contracts. Think of this type of regime as a partnership where both parties are joint owners of an undivided half share of the estate.
- The second type is Marriage out of Community of Property – profit and loss with the Accrual system. With this option, each spouse has his or her own separate estate and may deal with the estate as he or she wishes. During the subsistence of your marriage, it’s the same as if married out of community of property. Upon dissolution, that would be death or divorce, the spouse whose estate shows no accrual or a smaller accrual than the estate of the other spouse, has a claim against the spouse whose estate shows the greater increase, for half of the difference between the respective accruals. The advantages of this system are protection against insolvency of one of the spouses, and against the attachment of the assets of the other spouse. There is also a fair sharing of profits and losses during the marriage and no restriction on the contractual capacity of the spouses. The disadvantages of this system are that both parties need to keep some sort of record and accounting of their finances. It’s important to note that after 1 November 1984 accrual automatically applies unless expressly excluded in your contract.
- The third option is Marriage out of Community of Property – profit and loss without the accrual system. This would be a complete separation of property, thus two separate estates. The advantages are that you are protected against the insolvency of the other spouse and there are no restrictions on your contractual capacity. The disadvantages are that the parties do not share in each other’s wealth and this could be potentially unfair to the spouse with a lower earning capacity.
How long does this process take?
As a general rule of thumb, it’s advisable that you consult with an attorney a minimum of two weeks before your wedding. The reasons for this being that the attorney drafting your contract must be given sufficient time to take instructions from you as well as draft the contract and have it registered at the Deeds Office before your wedding. It’s also important to keep in mind that your ante nuptial contract must be registered at the Deeds Office three (3) months after it is signed. Your attorney upon registration will receive a certificate as proof of registration and this you will have to give to the person solemnizing your marriage.
Accept Our (helping) Hand
Poor or inadequate legal advice regarding what option will suit you best when deciding on a Matrimonial Property Regime can create unnecessary conflict and unwanted negative financial implications.
At Simpsons Attorneys Inc., we are able to provide you with sound legal advice and a contract tailored to your individual needs. We also offer a complimentary basic will for yourself and your prospective spouse when you have your ante nuptial contract drafted by us.
Contact us today at 021 949 2270 and let us walk you down the isle with confidence.