ANTENUPTIAL CONTRACT WITH ACCRUAL PDF

The Antenuptial Contract is one of the most important documents that a person will sign in his or her lifetime, that is if you opt to get married. How exactly does it it work? Antenuptial Contract The problem, however, is that many women somehow disregard the importance of the antenuptial contract and many embark on a divorce without due cognizance of the repercussions that might follow at a later stage, especially when the marriage end in divorce. Somehow many people merely see the antenuptial contract as a mere formality, something that needs to be signed prior to the wedding day, without realising the consequences of such an important legal instrument.

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The Antenuptial Contract is one of the most important documents that a person will sign in his or her lifetime, that is if you opt to get married. How exactly does it it work? Antenuptial Contract The problem, however, is that many women somehow disregard the importance of the antenuptial contract and many embark on a divorce without due cognizance of the repercussions that might follow at a later stage, especially when the marriage end in divorce. Somehow many people merely see the antenuptial contract as a mere formality, something that needs to be signed prior to the wedding day, without realising the consequences of such an important legal instrument.

No one goes into a marriage contemplating a divorce but when you consider that the antenuptial contract governs what will happen to your assets and liabilities on divorce or death, it makes lots of sense that considerable thought should be given to concluding it and that its contents should be fully understood by all parties concerned.

Unfortunately, many people are more drawn into the eyes of their spouse prior to the marriage than to the importance of the wording of a proper antenuptial contract. Marriage in Community of Property Where you did not conclude an antenuptial contract prior to your wedding day, you will automatically marry in community of property. And everything they earn or buy after their marriage is also part of this joint estate.

Any money or possessions belonging to either of the spouses at the time of the marriage, or acquired by them at any time thereafter, cease to be the private property of the one person and become part of a joint estate in which each of the partners has an equal, undivided share. On termination of the marriage, the husband and wife are each entitled to a half-share of the joint estate and they are jointly liable for any liabilities.

A major disadvantage is that if one partner becomes insolvent, the other is protected only if he or she owns property that does not form part of the joint estate. Everything in the joint estate will be attached and sold off to pay any creditors. Marriage out of Community of Property Each spouse retains his or her own assets and liabilities whether acquired before or during marriage.

There is no sharing of profits and losses. Both spouses have full and independent contractual capacity. Upon death or divorce, each spouse keeps control over their own assets. There is no provision for any sharing whatsoever. Where one party stays at home to raise children and does not contribute financially towards the marriage and the other spouse works and accumulates assets, the former may find herself with nothing and no claim to the assets of the latter. The marriage is governed by a contract known as an ante nuptial contract which is concluded by the parties before the marriage.

If the marriage occurred after 1 November , the contract had to specifically exclude the system of accrual. In the absence of this exclusion the rules of accrual will automatically apply. Before the introduction of the accrual system in , if prospective spouses chose to be married out of community of property, there was no form of sharing between them of what was built up during the marriage.

The accrual system was introduced to remedy this. The accrual system is a form of sharing of the assets that are built up during the marriage. The underlying philosophy in respect of the accrual system is that each party is entitled to take out the asset value that he or she brought into the marriage, and then they share what they have built up together.

It is of utmost importance that a party wishing to enter into an Ante Nuptial Contract must fully understand what it is they are signing. It is for this reason that a standard form contract cannot be used, that consultations cannot be held over the phone or by means of email and that, unfortunately.

The important features of an accrual marriage are in essence the following: Each party retains his or her own estate. Each party may accumulate assets and incur liabilities without interference from or assistance of the other spouse. The estate of each party is determinable separately. The monetary value of the smaller estate is subtracted from the monetary value of the larger estate, the difference is split, and the party having the larger estate pays half of the difference between the two estates to the party with the smaller estate.

At dissolution of the marriage, the estate of each party is calculated by listing all assets, listing all liabilities, subtracting liabilities from assets and arriving at a net asset value. In practical terms this amounts to a similar division to a marriage in community of property. However there are certain crucial factors of an accrual marriage which add complexity and much more freedom of choice.

When drafting the Ante Nuptial Contract, the parties can each decide to exclude certain assets. The effect of excluding an asset will be that it does not feature on the asset statement at dissolution of the marriage and is completely excluded from the calculation. Assets which are not properly described can cause huge problems when the executor or the divorce attorney tries to decide what to do with it in calculating the net accrual value.

To exclude either a specific asset, or a commencement value, or both which must be separate and not derived from the same asset , can effectively ensure that couples share only what they choose to share and keep separate any item or items, or values, which they do not believe it fair to share for example something acquired before the relationship commenced.

Excluded from the Accrual Certain property belonging to either the husband or the wife may not be taken into account when the accruals are worked out: Any damages awarded to either spouse for defamation or for pain and suffering; Any inheritances, legacies or gifts that either spouse has received during the marriage, unless the parties have agreed in their antenuptial contract to include these or the donor has stipulated their inclusion; A donation made by one spouse to the other.

Example: If spouse C had a net asset value of R10 If the initial value of the other spouse B was R20 In accordance with the Act, C the spouse with the smaller accrual acquires a claim against B the spouse with the larger accrual for one half of the net accrual, namely — R45 If you do intend to get married, it is well worth your while to consult a reputable attorney, to discuss your particular requirements and ensure that you fully understand the application of the accrual system to your particular situation.

Conclusion An Antenuptial Contract must be signed before the marriage and must be signed in the presence of a notary and two competent witnesses. The notary will then register the contract in the local registry of deeds. If parties wish to conclude an Antenuptial Contract after their marriage it is necessary to launch an application to the High Court.

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Sample Antenuptial Contract with accrual

Prospective spouses need to specifically mention that they wish for exclusion of the accrual system in their antenuptial contract in order for it to be excluded. Thus neither spouse will be affected by the debts or liabilities of the other. However, they will share the assets they acquire from the start of the marriage. The sharing of these assets only takes place once the marriage ends. Accrual relates to the extent of increase of the joint wealth between spouses throughout the marriage.

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Antenuptial Contracts with Accrual

Marriage in Community of Property When the parties do not enter into an antenuptial contract prior to marriage they will be automatically married in community of property. The property, assets and liabilities belonging to both parties at the time of marriage or acquired any time thereafter become part of the joint estate. The parties own the assets and liabilities in equal undivided shares and they are joint administrators of the joint estate. The parties in certain circumstances may however own separate property which will not form part of the joint estate for example donations and inheritances where the testator or donor expressly excluded from the joint estate.

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Antenuptial Contract without Accrual

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