What is an Antenuptial Contract (“ANC”)

What is an Antenuptial Agreement?

An antenuptial agreement is a written agreement that is entered into by couples who are getting married and who do not want to get married in community of property. The purpose of an ANC is to change some or all of the automatic financial consequences of marriage.

Do I Need an ANC?

To understand if and when you will need an antenuptial contract, it is important to understand the different marital regimes in South Africa and when and how they apply.

South Africa’s Marital Regimes

Married in Community of Property

When you get married in community of property, each person’s estate (i.e. the total sum of your assets and liabilities) is joined, consolidated and/or massed into one estate, which is called the joint estate. Everything is shared equally between spouses - what is mine is yours and what is yours is mine.

In the absence of entering into an antenuptial agreement, all marriages in South Africa are deemed automatically to be in community of property. There are some disadvantages associated with being married in community of property e.g. both spouses have to entered into contracts together, if one spouse is sequestrated, the creditors can attach the assets of the ‘joint estate’ other spouse is automatically also insolvent and if you inherit something or receive a donation from somebody this asset will form part of the joint estate unless the testator provides specifically in his Will that the inheritance will not form part of the joint estate or the donor specifies this fact in the donation agreement.

Married Out of Community of Property - Without Accrual (Straight Out & Out)

For a marriage to be out of community of property but without accrual, a couple must sign an antenuptial contract before the marriage.

Both spouses retain their own separate estates pre-marriage, during marriage and post marriage. What is mine is mine and what is yours is yours - nothing is shared. Here spouses have complete freedom to deal with their own property as they want to.

Married Out of Community of Property - With Accrual

For a marriage to be out of community of property and with accrual, a couple must sign an antenuptial contract before the marriage.

When ‘accrual’ applies, a commencement value is given to each spouse’s estate at the beginning of the marriage, which is specified in the ANC. When the marriage comes to an end via death or divorce, the net increase in value of each spouse’s estate is determined and a formula is used to calculate how much the spouse with the larger estate must pay the spouse with the smaller estate.

The underlying principle of the accrual system is that each spouse is entitled to take out the asset value that he or she brought into the marriage, and then share what they have built up during the marriage, together.

The right to share in accrual is exercisable only upon dissolution of the marriage and as as a result, this right is not transferable and cannot be attached by creditors during the subsistence of the marriage.

What are the Benefits of an ANC?

Spouses can share in the assets accumulated during their marriage and the spouse with the smaller estate is compensated upon the dissolution of the marriage. Certain assets or all assets owned by the spouses pre-marriage can be excluded from the accrual and each spouse retains their discretion on how to deal with their own finances. Married couples are not liable for each other’s debt and if one spouse becomes insolvent, creditors cannot touch the assets of the solvent spouse.

How to Execute & Register an ANC?

It is advisable that you get legal advise from an experienced Family Lawyer when deciding which marital regime will suit your needs and that if you need an ANC, that same is drawn up by a Family law expert. ANC’s have to be executed in the presence of a notary and then registered in the Deeds Registry. The Antenuptial must be registered in the Deeds Registry within 3 months of the date of the marriage.

Our Family Law Attorneys have extensive experience with drafting and registering antenuptial contracts. If you would like to find out more, contact our offices.