Ante Nuptial Contracts (ANC)

What is it?

This form of contract is entered into between two people before they enter into marriage. The contract seeks to govern how the property of each person entering into the marriage will be dealt with upon dissolution of the marriage. It is important to note that there are three types of marital regimes each regulating the matrimonial property in a different manner:

  1. Marriage in Community of Property;
  2. Marriage out of Community of Property;
  3. Marriage out of Community of Property with the inclusion of the Accrual System.
Marriage in Community of Property

Marriage in Community of Property is a regime where all the assets of each spouse, upon marriage, become part of a joint estate of which each spouse owns an undivided half share. Practically this means that whatever assets a person had before marriage and assets that person acquires during marriage, shall not be the sole property of that spouse. In fact, the property must be shared on a 50-50 basis between each spouse. It is important to note that according to South African Law, if a marriage is entered into without a marriage contract, such a marriage shall by default be in Community of Property.

Advantages:

  • On death or divorce the joint estate is divided equally;
  • A spouse who stayed at home to look after minor children will still own half of the joint estate.

Disadvantages:

  • Although spouses have a 50% share in all the assets, each spouse shall also have a 50% share in all debts accrued by any one of the spouses.
  • If one spouse is sequestrated or that spouse’s business is liquidated, all assets jointly owned will form part of the estate which will be liquidated or sequestrated.
  • There is very little financial independence since most transactions will require the consent of both spouses.
  • Upon the death of one spouse, the surviving spouse’s estate shall also be wound up, often causing the surviving spouse a plethora of legal tasks to complete before his/her portion of the estate is separated.
Marriage out of Community of Property Without the Accrual System

With this form of Matrimonial regime the persons wanting to enter into marriage conclude a written agreement before marriage which is drafted by an Attorney and is notarised by a Notary Public. This contract is then registered at the Deeds Registry which keeps a record of the contract.

In accordance with this regime all property of each spouse acquired before and during the marriage shall not form part of the other spouse’s estate and shall always be the sole property of that spouse.

Advantages:

  • Upon insolvency of the one spouse, the other spouse’s assets are protected from creditors as that spouse’s assets are his/her sole property.
  • Upon divorce or death each spouse retains their own property.
  • This regime suits persons who have accumulated a great deal of wealth and who wish to protect such assets.

Disadvantages:

  • Upon death or divorce the spouse who has chosen to stay home and raise the children and manage the household will not be entitled to assets which have been accumulated together.
Marriage Out of Community of Property With the Inclusion of the Accrual System

This form of regime requires each person, before marriage, to value his or her respective assets. These assets then serve as a starting point to evaluate the net worth of each person’s estate before they entered into marriage. These values are set out in the marriage contract as well as certain assets one would like to exclude from the joint estate.

Advantages:

  • Both spouses share in the wealth which has accumulated during the marriage.
  • Property acquired before marriage shall remain the property of each spouse and does not form part of the Accrued Estate.
  • Spouses who remain in the home to care for the family and manage the household are entitled to half of the Accrued Estate and are therefore protected.
  • Upon insolvency of one spouse, the other spouse’s assets are protected from creditors as that spouse’s assets are his/her sole property until the dissolution of the marriage.
Time Period

An Ante Nuptial Contract must be entered into before the date of marriage in order to be valid.

Documents Required:
  • Identity documents of both parties
  • List of assets of both parties.