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Antenuptial contract without the accrual (Marriage)

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Antenuptial Contract WITHOUT accrual

A contract setting out the agreement between the parties whereby they wish to marry but do not wish to share in the profits of their marriage nor combine their assets upon the conclusion of the marriage.
1. Introduction
An antenuptial contract sets out the rules and conditions that will govern the division of assets, both during the marriage and upon
its termination. It is concluded between two unmarried persons who are legally competent to enter into a marriage.

Historically, most marriages were concluded in community of property in order to provide a level of protection for women who
took care of the household and therefore received no income. In this contemporary era we are aware that it is more natural for
both parties to have well established careers and separate economic lives prior to entering into a marriage.

This article will explore the legal background of antenuptial contracts in its entirety and reflect on the importance of
understanding the different marital regimes best suited to the different lifestyles.

2. Formal requirements for an antenuptial contract

2.1 Notarial form:

It is important to keep in mind that only an admitted and practising notary may execute an antenuptial contract. The
notary executing the contract must not have a personal interest in the contract and must not be closely related to one of the intended spouses.

The full names and surname of the notary must be mentioned, and the notary’s seal of office is usually affixed
on the last page of the contract.

2.2 Description of the parties:

The parties to the contract must be described by their full names and surname, identity number (or date of birth) and marital status (unmarried).

If a party is a minor, such minor must be assisted by either his/her parent or guardian, the Commissioner of Child
Welfare or the person appointed in terms of a court order to assist the minor in entering into the antenuptial contract.

2.3 Date:

The date on which the antenuptial contract is executed must be indicated in the preamble of such contract. This date is of importance for two reasons. Firstly, the antenuptial contract
must have been executed prior to the parties entering into their marriage. Secondly, there is a prescribed time period
within which the antenuptial contract must be registered after its execution in order for the contract to be valid and enforceable against third parties.

2.4 Place of execution:

The place of execution must be mentioned either in the commencement (heading) or in the conclusion of the contract.

2.5 Signature:

Both the intended spouses must sign the antenuptial contract
in front of a notary, and in the presence of two competent witnesses.

If the parties sign on two different dates, the latest date will be regarded as the date of the contract.

2.6 Registration:
Once the antenuptial contract has been signed it must be forwarded to the deeds office, in the area where the parties
reside, to be registered. Registration must take place within three months of the date it was signed by the notary.

2.7 Witnesses:

It is customary for two competent witnesses to attest the parties signatures. The registrar of deeds has a discretion
to allow the registration of an antenuptial contract which has not been attested by witnesses, if there is a good reason for such omission.

3. Civil Unions and Customary Marriages

The parties must be able to validly marry each other in order to enter into an antenuptial contract.

3.1 Civil Union Partners: As a result of the Civil Union Act partners in a civil union can also conclude and register a valid antenuptial contract.
The same practices and procedures applicable to the registration of antenuptial contracts of persons married in
terms of the Marriage Act apply to the registration of antenuptial contracts of persons joined in civil union.

3.2 Parties to a Customary Marriage:

A customary marriage concluded after the commencement of the Recognition of Customary Marriages Act is regulated by
the Matrimonial Property Act in the same manner as applicable to other marriages. Whereas, a customary
marriage concluded before the commencement of the Act is deemed as in community of property. The spouses can apply
to court to change the matrimonial system applicable to their marriage.

4. Marriage out of community of property without accrual

The purpose of an antenuptial contract is to exclude the community of property and profit and loss as well as to include or
exclude the accrual system from the marriage. However, the exclusion of community of property does not necessarily mean that
the community of profit and loss are also excluded. Thus, there has to be an express provision that excludes profit and loss.

Example 1. “There shall be no community of property between the spouses.” 2. “There shall be no community of profit and loss between the spouses.” When an antenuptial contract is in place the marriage is automatically out of community of property. This entails that all the
assets owned by the parties prior to entering the marriage remains the property of the individual and does not form part of the joint marital estate.

A marriage out of community of property without accrual is the simplest marital arrangement. All the assets and liabilities acquired
during the marriage belongs to the person who acquired it, and each party may make any arrangements regarding the disposal of their estate in a will.
5. Marriage out of community of property with accrual

The “accrual” of the estate of a spouse is the growth that the spouse’s estate showed during the marriage.

In terms of the accrual system , during the existence of the marriage the property belonging to each spouse remains
completely separate. Only upon the termination of the marriage, all the property acquired by the parties during the marriage are
shared between them. The property acquired by the parties prior to their marriage is not shared

4.1 Calculation of the accrual

Value at commencement:

The value of each spouse’s estate at the commencement of the marriage must either be discussed in the antenuptial contract or in a separate statement.

The commencement value of the spouse’s estate is deemed to be nill if the liabilities of that spouse exceeds the assets, or
if the commencement value was not declared in the antenuptial contract or in the separate statement.

Value upon termination:

When the marriage is terminated each spouse’s estate will be valued again in order to calculate the growth/accrual of
each estate. The commencement values are adjusted to make provision for inflation.

4.2 Assets excluded in the calculation of the accrual:

• damages received for non-patrimonial loss;
• assets specifically excluded from the accrual in the antenuptial contract;
• inheritances, legacies and donations received from third parties;
• donations between the spouses.
4.3 The calculation:

The spouse whose estate shows no accrual or a smaller accrual compared to the estate of the other spouse has a
claim against the spouse (or the spouse’s estate if he is deceased) whose estate shows the greater increase, for half
the difference between the respective accruals.

Example

Spouse A has a net asset value of R10 000. 00 at the commencement of the marriage (commencement value) and a net asset value of
R100 000.00 upon termination of the marriage (termination value). The accrual of spouse A’s estate is R90 000.00.
Spouse B has a commencement value of R20 000.00 and a termination value of R200 000.00. The accrual of spouse B’s estate is R180 000.00.

The net accrual is calculated by subtracting the smaller accrual from the larger accrual. R180 000.00 – R90 000.00 = R90 000.00.
Spouse A acquires a claim against spouse B for half of the net accrual (R45 000.00).
6. The pros and cons of the two matrimonial property systems

 

Marriage out of community of property with accrual

 

Marriage out of community of property without accrual

 

Pros

 

Cons

 

Pros

 

Cons

 

It provides security to the economically weaker spouse.

 

The economically stronger spouse has to share his/her profits made during the marriage. 

 

Each spouse keeps his/her own assets, and can dispose of their estate freely.

 

The economically weaker spouse does not share in the estate of the stronger spouse.

 

The spouses share in their assets accumulated during the marriage.

 

The parties have to enter into an antenuptial contract in order for the accrual system to apply.

 

Spouses are generally not liable for each other’s debts.

 

An antenuptial contract has to be entered into which costs money.

 

The spouses do not share their assets acquired prior to the marriage.

 

The calculation of the accrual upon termination of the marriage can be complex.

 

The financially stronger spouse does not have to share his/her estate with the weaker spouse.

 

 

7. Operative clauses

Inclusion or exclusion of the accrual system:

In order to prevent any uncertainty regarding whether or not the accrual system should apply to the marriage it is
advisable to insert a clause in the contract which states the wishes of the parties.
Example

1. Inclusion of accrual: “The accrual system referred to in Chapter 1 of the Matrimonial Property Act 88 of 1984 shall,
as from date of conclusion of the intended marriage, apply to the said intended marriage.”

2. Exclusion of accrual: “The intended marriage will not be subject to the provisions of Chapter 1 of the Matrimonial
Property Act 88 of 1984 and the accrual system is hereby expressly excluded in terms of the provisions of Section 2 of the said Act.

8. Clauses regarded as contra bonos mores

The following clauses are regarded as contra bonos mores (against good morals) and may not be included in an antenuptial contract:

• An undertaking by a spouse to adopt/convert to the religion/faith of the other spouse;
• A clause stating that the marital disputes will be referred to arbitration;
• A clause recreating/retaining the husband’s marital power;
• A clause stating that the spouses will not live together after marriage;
• A clause permitting the parties to commit adultery;
• A clause stating that the wife shall stop working and become a housewife on a permanent basis from the birth of their first child;
• A clause stating that the one spouse cannot bind the other spouse for household necessities;
• A clause stating that neither spouse shall have the right to ask for an order of forfeiture to share in the accrual of the other’s estate in divorce.
9. The impact of Covid-19 on antenuptial contracts

As a result of the covid-19 pandemic and subsequent national lockdown many couples were forced to cancel or postpone their marriage.

In the event of the antenuptial contract being signed and registered prior to the marriage the contract will only become
effective once the marriage has been solemnized.

An antenuptial contract regulates the matrimonial property system applicable to the marriage and will only become
effective after the conclusion of the marriage. Should the parties find themselves unable or unwilling to marry, for
whatever reason, the antenuptial contract will not have any force or effect even if it is registered with the deeds office.

10. Legal assistance by attorneys

It is strongly recommended to consult an attorney prior to making life changing financial and social decisions regarding marriage
and divorce. Attorneys can be expensive but they are crucial to ensure adherence to the law and the correct implementation of the parties rights.

However, there are options available to parties who cannot afford the legal services of an attorney:

10. 1 Legal Aid South Africa – aims to provide legal aid to those who cannot afford their own legal representation. This
includes poor people and vulnerable groups such as women, children and the rural poor.

10.2 Pro bono (free) legal services offered by attorneys – attorneys in South Africa are obligated to provide pro bono
legal assistance 24 hours per year to impoverished members of the public. This aims to enhance access to justice for parties of limited financial means.

The Legal Practice Council will refer a party who qualifies for free legal assistance to an attorney who will assist the party
pro bono. The party will then only be responsible for the actual expenses incurred such as sheriff’s fees. The attorney
will not charge any fees for the work and legal services provided.

11. Conclusion

When deciding between a straightforward out of community of property, or out of community of property with accrual it is
important to take into consideration all the aspects discussed above. As time passes and spouses become involved in
businesses, investments and other opportunities, the legal side of the relationship plays a significant role.
The accrual system is more popular in South Africa, especially to young couples who are still establishing a substantial estate.
However, antenuptial contracts can have consequences for spouses and their families, and great care should be taken to
properly discuss the required terms and consequences of an antenuptial contract with a notary public.






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