Antenuptial contracts (ANCs) allow couples to marry out of community of property. This is a popular option for those who want to protect their assets and finances before and during their marriage. With an ANC, each spouse retains their right to contract with third parties without the other's consent and is protected from the creditors of the other spouse.
When marrying out of community of property, there are two options to consider regarding the ANC: with or without accrual. Marrying without accrual means that each spouse keeps their own property and liabilities acquired prior to and during the marriage. With accrual, each spouse is entitled to a fair share of the estate in case of a divorce. The default option is marrying with accrual, which is automatically included if the accrual system is not excluded in the ANC.
A recent court case (RD v TD 2014 (4) SA 200 (GP)) highlights potential legal loopholes for couples who choose to marry with an ANC without accrual and later engage in a joint business venture. The court ruled that these spouses should be treated as business partners and the net benefits from the partnership would be divided between them. It is important for couples to have these difficult discussions and understand the consequences of their marriage regime before entering into it, to protect themselves and their future spouse in the event of a divorce or death.
For expert advice on matrimonial systems and related topics, please contact Louwrens Koen Attorneys.