Let’s talk about marriage and money…

May 23, 2019 | , , , , , , , , , | News

When you plan your wedding, the last thing you want to do is talk to your one and only about your debt, or what would happen if your soon-to-be marriage would end. You are planning your wedding day, your honeymoon, of buying your dream home with the white picket fence and your future children. Who cares about your assets and liabilities?

Well, we do, and it is important that you understand the risk of not making an informed decision before your wedding day as to how the financial matters in your marriage will work.

I cannot tell you how many times I have heard couples say “but it feels like if I sign an antenuptial contract, that I am saying my marriage wont last”. That is understandable, but you have to be sure you understand what this means and make this decision with your head and not your heart.

What is an antenuptial contract and why is it important?

It is a contract that you and your soon-to-be-partner enter into before your wedding, stipulating that you want to be married either out of community of property with the accrual system or out of community of property without the accrual system.

In South Africa, you are married either in community of property or out of community of property.

If you don’t have an antenuptial contract, you are automatically married in community of property. This would mean that from your wedding date, your separate estates will form one joint estate and all the assets, debts and liabilities each of you had prior to your wedding day will now form a joint estate. This means that you both are liable for debt and liabilities of your joint estate. So, if one of you goes into debt, creditors can claim from both.

If you have an antenuptial contract, you are married out of community of property, in other words, each of you will keep and maintain your separate estates before, during and after marriage and each of you are liable for your own debts and liabilities during the marriage. In the antenuptial contract it can be stipulated that the accrual system applies, or not. In short, if the accrual system applies, each of you retain your own assets and liabilities during and after marriage, but the one with the smallest accrual (growth of estate) is entitled 50% of the difference between the two parties’ accrual.

So, let’s use a practical example – you give up your job and stay at home. Your partner decides to buy a biltong shop. If the shop makes money, wonderful. If the shop loses money, what then? Well, if you are married in community of property, you are liable to settle all debt of the shop with your partner, or you will be liable if your partner can’t pay. If you had listened to your attorney, and have an antenuptial contract – you won’t be held liable.

So, before you put a ring on your partner’s finger and say your vows, talk to an attorney to guide you through the not so romantic part of your soon-to-be marriage.


Disclaimer – this article is for information purposes only and cannot be construed as legal advice.

Author: Petra van Vuuren

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