Romance and Reality: Ante Nuptial Contracts

A marriage requires a continuous balance of romance and reality: The Ante Nuptial Contract.

Amidst the romantic flurry of wedding planning, and before you say your ‘I do’s’ it’s essential to consider the real legal matters that will shape your marital journey.  It is important to understand Ante Nuptial Contracts. Wether you think you want or need to sign one, informing yourself about the pros and cons of ANCs, and each type is vital for safeguarding the financial health of your union.  Unstable marital financial health can obviously lead to poor marital emotional health. And thus it’s key to have clarity on the the framework of your financial union in order to protect the emotional one.

Please note that the writer of this article is not a lawyer, and this post does not constitute legal advice.  A lawyer should be consulted who will advise on the legal path that is best for your particular situation.  The following information is merely an overview. 

What is an Ante Nuptial Contract?

An Ante Nuptial Contract (ANC) is a legal agreement often entered into by couples before marriage, to determine how their assets and liabilities will be treated during the marriage, and in the event of divorce or death.  In South Africa, couples have three options when drafting an ANC:

1. In Community of Property: By default, if no ANC is signed, couples are automatically married in community of property. This means all assets and liabilities, both those acquired before and during the marriage, are shared equally between spouses.  Both spouses are equally responsible for the other’s debts, both those incurred before and those incurred during the marriage.
2. Ante Nuptial Contract without Accrual: This option allows couples to keep their assets and liabilities separate throughout the marriage. Each spouse retains control over their individual finances, and there’s no sharing of assets or liabilities accumulated during the marriage. In the event of divorce or death, each spouse keeps what they brought into the marriage, and earned during the marriage.  This can obviously be tricky to unravel after years of shared living.
3. Ante Nuptial Contract with Accrual: Each spouse documents and excludes their pre-marital assets from the union.  And the wealth or assets acquired during the marriage are shared equally upon divorce or death.

Pros and Cons of Each Option

In Community of Property:

1. 1. Pros: Straightforward. Equal sharing of assets and liabilities.
   2. Cons: Both spouses are equally liable for each other’s debts.  Those incurred prior to the marriage and during it.
   3. Limited financial independence for each party.

Ante Nuptial Contract without Accrual:

• • • Pros: Protects pre-marital assets. Allows for financial independence.
    • Cons: No sharing of assets acquired during the marriage. Can lead to disparities in wealth accumulation, and create knock on emotional concerns.

Ante Nuptial Contract with Accrual:

• • Pros: Protects pre-marital assets. Allows for equal sharing of the wealth accumulated during the marriage. Equal distribution of assets upon divorce or death.
  • Cons: Requires careful calculation and evaluation of assets pre wedding.

Why Ante Nuptial Contracts Are Important:

Ante Nuptial Contracts are not just about financial protection in divorce; they’re about securing your financial health within a marriage. ANCs provide clarity and transparency, ensuring that both spouses understand their rights and responsibilities. By defining the financial framework of your marriage, you’re laying the groundwork for a stable and equitable partnership.

Example Scenarios:

1. In Community of Property: Sarah and John decide not to sign an Ante Nuptial Contract at all. The default result is that they are married In Community Of Property.  After marriage, Sarah discovers that John has significant debt. Since they’re married in community of property, Sarah is now equally liable for John’s debt.
2. Ante Nuptial Contract without Accrual: Emma and Michael sign an Ante Nuptial Contract without accrual. During their marriage, Emma takes years off work to raise the family, putting her ‘behind’ Michael professionally and in her earnings. In the event of divorce, Emma will have accrued a lesser estate.
3. Ante Nuptial Contract with Accrual: Tumi and Tapelo opt for an Ante Nuptial Contract with accrual. Over the years, they both contribute to the growth of their lives, financially and otherwise.  In case of divorce, the accumulated assets will be divided equally, ensuring a fair outcome for both parties.

Ante Nuptial Contracts are a crucial aspect of wedding planning in the South African context. Whichever path you choose it’s essential to understand the implications of your decision. By discussing and drafting an ANC together, with the assistance of a lawyer, you’re not only protecting yourselves in case of unforeseen circumstances but also laying the foundation for a financially healthy and harmonious marriage.

Ante Nuptial Contracts are not unromantic; they’re a practical step towards building a secure future together.