Richard and Lucy were in a hurry to get married. They had been dating for two years but with Richard trying to get his new business established and Lucy working as a clerk, they did not have enough money to set up home together.
Then Lucy’s grandmother died and bequeathed her a small townhouse, so they decided to tie the knot.
They prepared for their big day with enthusiasm. They spoke to the minister of their church, set the date and drew up a guest list while Lucy went shopping for a wedding dress.
Both sets of parents had no problem with their decision – but insisted that the couple see an attorney to have an antenuptial contract drawn up before the wedding. This was particularly important because Lucy was now a property owner.
“Why?” Lucy asked. “We love each another. We want to share everything we own.”
Fortunately, good sense prevailed when the couple were told that an antenuptial contract (ANC) would protect the interests of both.
If they were married in community of property – a state of affairs which would automatically result if they did not have an antenuptial agreement – they would indeed share everything, debts included.
Attorney Roy Bregman of Bregmans, a Johannesburg legal firm specialising in family law, says most young couples are married in community of property. While initially it may seem romantic to share all their worldly goods, problems often emerge years later when the couple have accumulated assets.
“In Richard and Lucy’s case, an ANC is particularly important because Richard is a young businessman,” he says. “If they do not have an antenuptial agreement and the business runs into trouble, there is a chance that the house could be claimed to pay the husband’s debts. An ANC offers protection – but it has to be signed before the wedding and not after.”
With a marriage in community of property, neither husband nor wife is financially independent of the other. If, for instance, Lucy loses her head and goes on a wild shopping spree, her husband would be responsible for her debt. Most major financial transactions such as the sale of shares or the acquisition of a home loan, would require the written consent of both.
There can be another down side. Wives forced to work to feed their families are known to have their wages taken from them by exploitative husbands with little chance of redress. While this was not a problem Lucy anticipated, both she and Richard accepted that an antenuptial agreement could solve future problems.
The picture became clearer as their attorney explained the differences in the two kinds of ANCs.
One is an antenuptial contract without accrual, the other is an antenuptial contract with accrual.
Bregman explains that an ANC without accrual means that assets acquired before the marriage – such as a house, expensive art work, a car or even shares – remain the sole possession of the person who owns them. Neither the wife nor the husband shares the other’s possessions.
Legacies or inheritances, even monthly income, are automatically excluded – as are debts. If a partner becomes insolvent, creditors cannot attach the other’s estate.
This does not mean, however, that they are not legally obliged to care, share with and protect one another.
It’s a businesslike arrangement but it works for people who want to safeguard their possessions should problems arise. It is a particularly useful tool for couples who may have been married before.
“That would work for my friend, Angela,” Lucy commented. “She inherited all her late husband’s assets when he was killed – and she wants to keep most of it for her little boy if she should remarry.”
More common is an ANC with accrual. This means that couples starting marriage together exclude the possessions they had before marriage. Thereafter husband and wife share in the financial benefits accrued during the marriage.
An ANC also takes cognisance of the benefits and contributions made by a mother who stays home to look after the children. An array of imponderables can be covered by the contract. If, for instance, the marriage ends in divorce or death, assets made during the marriage are shared equally regardless of who earned them.
Bregman illustrates: “If, say, a wife has accumulated assets valued at R1 million, and the husband R2m, the joint estate would be worth R3m – or R1.5m each. If either party had assets before the marriage that were excluded, these would vest in each party, before the accrual is given effect to. “
In short, an ANC protects the wife throughout the couple’s married life. It solves yet another problem that could arise – but hopefully won’t – should the husband have an affair. If he were to die he cannot bequeath his assets to his mistress. An ANC takes precedence over a will, with the wife’s interests paramount. It is a valuable legal document in marriages that could last a lifetime. - The Star