Deciding on a Prenuptial agreement

The marriage system is often the last thing on a bride’s mind when planning a wedding. The fact is if an antenuptial agreement is to be concluded between couples, it must be signed before a notary before the marriage is concluded. The agreement must furthermore be registered with the registrar of deeds within 3 months after the couple has been married. There are different options available when couples decide on the type of marriage system that will govern their marriage:

Marriage within community of property:

A marriage will be in community of property if parties get married without first concluding an prenuptial agreement. The estates of the parties will be joined which will include their once separate assets and liabilities. This option is not advised as claims against one estate may be claimed from the other spouse’s estate and parties will be jointly and severally liable for liabilities incurred by the other spouse even without his or her consent. Should one spouse pass away, the living spouse will be dependent on the executor until the finalisation of the parties’ joint estate. If a marriage should dissolve for whatever reason the estates will be divided between the parties in equal shares. Certain actions may not be taken without the prior written consent of the other spouse.

Marriage out of community of property with the exclusion of the accrual system:

The estates of the spouses remain the property of each spouse. The spouses are only liable towards their own debtors and do not incur liability on behalf of the other spouse. Should one of the spouses pass away the living spouse can carry on as per usual as the two estates does not join at any stage and the living spouse does not become dependent on the executor to finalise the estate. A spouse does not become entitled to the estate of the other spouse at dissolution of the marriage.

Marriage out of community of property with the inclusion of the accrual system:

The estates of the spouses remain the property of each spouse. The spouses are only liable towards their own claimants and do not incur liability on behalf of the other spouse. At the dissolution of the marriage relationship, for whatever reason, the spouses become entitled to 50 percent of the growth of the other spouse’s estate. Should one of the spouses pass away, the living spouse can carry on as per usual as the two estates does not join at any stage and the living spouse does not become dependent on the executor to finalise the estate. The parties may decide to exclude property that they bring into the marriage from the accrual system.

See a practical example of the accrual system below in Figure 1:

1. 1st Spouse’s estate at the beginning of the marriage is R10,000.00.
2. 2nd Spouse’s estate at the beginning of the marriage is R50,000.00.

1. 1st Spouse’s estate at the dissolution of the marriage has a Net value of R50,000.00.
2. 2nd Spouse’s estate at the dissolution of the marriage has a net value of R100,000.00.

1. At the dissolution of the marriage the spouse with the smallest growth in the estates (1st Spouse) is entitled to half of the difference between the accrual of the two estates calculated as follow:
   1. Joint net values: R40,000.00 + R50,000.00 = R90,000.00;
   2. The estate with the smallest accrual is subtracted from the joint net value: R90,000.00 – R40,000.00 = R50,000.00;
   3. 1st Spouse is entitled to R25,000.00 of the estate of the 2nd spouse.