What Is an Antenuptial Contract?
An antenuptial contract, commonly called an ANC, is a notarial contract entered into in connection with a marriage and used to regulate the matrimonial property consequences of that marriage.
In practical terms, an ANC allows prospective spouses to exclude community of property and community of profit and loss. The parties can then determine whether their marriage will be subject to the accrual system or whether accrual will also be excluded.
The contract is executed before a notary and registered in the Deeds Registry in accordance with the legal requirements.
What Happens If You Do Not Sign an ANC?
For an ordinary civil marriage to which the default matrimonial property rules apply, failure to enter into an antenuptial contract generally means that the spouses are married in community of property.
This creates a joint estate. Instead of each spouse maintaining a completely separate estate, the spouses' property and liabilities generally form part of the joint estate, subject to the applicable legal rules and exceptions.
Do not assume that keeping separate bank accounts or registering an asset in only one spouse's name automatically creates a marriage out of community of property. Your matrimonial property regime is a legal status, not merely a private budgeting arrangement.
Understanding the Main Matrimonial Property Systems
Couples should understand the practical difference between the principal matrimonial property systems before deciding what arrangement suits their circumstances.
In Community of Property
The spouses generally have a joint estate containing their assets and liabilities, subject to applicable exclusions and legal rules.
Out of Community With Accrual
Each spouse maintains a separate estate during the marriage, while the accrual system provides for sharing in the growth of the estates when the marriage ends.
Out of Community Without Accrual
The spouses maintain separate estates and exclude the accrual system, subject to the applicable law and the terms of their ANC.
Your Choice Has Long-Term Consequences
The matrimonial property system can affect property, debt, business interests, divorce and the financial consequences of death.
What Is the Accrual System?
The accrual system is designed to allow spouses to maintain separate estates during the marriage while sharing in the growth of those estates when the marriage is dissolved by divorce or death.
In broad terms, the accrual of an estate is determined by comparing the net value of the estate at the commencement of the marriage with its net value at the end of the marriage, subject to the adjustments and exclusions provided for by law.
Marriage with accrual does not mean that everything becomes jointly owned during the marriage. Each spouse retains a separate estate. The sharing mechanism becomes relevant when the marriage is dissolved.
How Does an Accrual Claim Work?
When a marriage subject to the accrual system ends, the growth of each spouse's estate is calculated according to the Matrimonial Property Act.
Determine the Starting Values
The commencement value of each spouse's estate is relevant to determining how much that estate has grown during the marriage.
Determine the Ending Values
The net value of each estate at dissolution is determined, taking account of the applicable statutory rules and exclusions.
Calculate Each Estate's Accrual
The growth of each estate is calculated after the relevant commencement values and statutory adjustments have been considered.
Compare the Accruals
The spouse whose estate shows the smaller accrual may have a claim for half of the difference between the accrual of the respective estates.
Why Do Commencement Values Matter?
Where the accrual system applies, the value of each spouse's estate at the commencement of the marriage can have an important effect on the eventual accrual calculation.
Prospective spouses should therefore provide accurate information about their assets and liabilities when the ANC is prepared and obtain advice about how commencement values should be recorded.
If accrual is being chosen, discuss your existing property, investments, businesses and liabilities with the notary. The ANC should reflect the financial arrangement the parties actually intend.
Can Assets Be Excluded From Accrual?
An antenuptial contract can identify particular assets that are to be excluded from the accrual system, provided the exclusion is properly dealt with in the contract.
This can be particularly relevant where a prospective spouse already owns a significant asset, business interest or other property that they intend to keep outside the accrual calculation.
Existing Immovable Property
A spouse may wish to discuss the treatment of property already owned before the marriage.
Business Interests
Existing companies, shares or other business interests may require careful consideration when the ANC is drafted.
Existing Investments
Significant investment portfolios or other assets can be discussed with the notary when structuring the contract.
Family Assets
Existing family assets and broader estate-planning considerations may influence how the parties structure their ANC.
What Does an ANC Without Accrual Mean?
Prospective spouses may expressly exclude the accrual system in their antenuptial contract.
In that situation, the spouses are married out of community of property without accrual. Each spouse generally retains a separate estate during the marriage and there is no contractual accrual-sharing mechanism on dissolution.
Excluding accrual creates a substantially different financial arrangement from marriage with accrual. Couples should understand the long-term implications before choosing complete separation of their estates.
How Can an ANC Affect Debt?
One of the important consequences of marrying out of community of property is that the spouses maintain separate estates rather than creating one joint estate.
This can provide important protection where one spouse operates a business, incurs commercial risk or has significant existing liabilities.
Separate estates do not mean that a spouse can never become liable for a particular debt. Liability may still arise from contracts, suretyships and other legal obligations. Do not sign joint credit agreements or suretyships on the assumption that the ANC will automatically protect you.
Why Is an ANC Important for Business Owners?
Business owners often have additional reasons to consider their matrimonial property system carefully.
A business can represent a substantial portion of a person's estate, while entrepreneurship may also involve loans, guarantees and commercial risk.
Business Interests
The treatment of existing shares or business interests should be considered when the ANC is prepared.
Future Business Value
Where accrual applies, the growth of an estate during the marriage may become relevant to the eventual accrual calculation.
Commercial Liabilities
Separate estates can be particularly significant where one spouse carries greater commercial or entrepreneurial risk.
Long-Term Structure
The ANC should be considered alongside shareholder agreements, estate planning and other relevant business arrangements.
Does an ANC Matter When a Spouse Dies?
Yes. An antenuptial contract does not only become relevant if the spouses divorce. The matrimonial property system can also have important consequences when a marriage ends through death.
In a marriage subject to accrual, the accrual mechanism can become relevant on dissolution through death as well as divorce. Estate planning should therefore take the matrimonial property regime into account.
An antenuptial contract is not a replacement for a will. Couples should consider their matrimonial property regime and estate planning together so that the documents do not work against one another.
How Does the ANC Process Work?
An antenuptial contract involves legal formalities. It should therefore not be left until the final hours before the wedding.
Discuss Your Financial Position
Consider existing assets, liabilities, property, businesses and the financial arrangement each partner wants for the marriage.
Choose Your Matrimonial Property System
Decide whether the marriage will be out of community of property with the accrual system or whether the accrual system will be expressly excluded.
The ANC Is Prepared
The contract is prepared according to the parties' instructions and the legal requirements applicable to antenuptial contracts.
Execution Before a Notary
The antenuptial contract is executed in accordance with the prescribed notarial formalities.
Registration
An ANC executed in South Africa must be registered in a Deeds Registry within three months after its execution, subject to the applicable statutory provisions.
Why Is a Notary Required?
An antenuptial contract is a specialised notarial instrument. It must comply with the formalities prescribed by South African law and be attested by a notary.
The notary also assists the parties in understanding the difference between the matrimonial property systems and in translating their chosen arrangement into the ANC.
An antenuptial contract is not an ordinary private contract that prospective spouses can simply print, sign at home and place in a drawer. Notarial execution and registration requirements apply.
What If You Are Already Married?
Couples sometimes only discover after the wedding that they are married under a matrimonial property system they did not intend.
Once the marriage has taken place, spouses cannot ordinarily correct the position merely by signing an ANC and backdating their intentions.
The Matrimonial Property Act provides a mechanism through which spouses may jointly apply to court for authority to change their matrimonial property system, provided the applicable legal requirements are satisfied.
Dealing with the matrimonial property system properly before marriage is considerably simpler than approaching a court afterwards to seek authority to change it.
Questions to Consider Before Choosing Your ANC
There is no single matrimonial property system that suits every couple. The correct choice depends on the parties' circumstances and what they want their financial relationship to look like.
What Do You Already Own?
Consider property, investments, vehicles and other significant assets owned before marriage.
What Do You Already Owe?
Existing loans, business liabilities and other debt should form part of the discussion.
Does Either Partner Own a Business?
Business ownership, commercial risk and anticipated growth may influence the structure selected.
How Do You Want to Share Growth?
Consider whether each spouse should remain completely financially separate or whether growth accumulated during the marriage should be shared through accrual.
Does Signing an ANC Mean You Expect to Divorce?
No. An antenuptial contract is financial planning, not a prediction about whether the marriage will succeed.
Couples routinely make decisions about insurance, property, wills, investments and retirement without expecting something to go wrong. Choosing a matrimonial property system serves the same purpose: it establishes clarity before major financial consequences arise.
The wedding may be about flowers, vows and champagne. The matrimonial property system is about assets, liabilities, ownership and financial consequences. Both deserve attention before the marriage.
The Bottom Line
An antenuptial contract determines the financial framework of a marriage out of community of property and can have consequences throughout the marriage and when it ends through divorce or death.
Couples should understand the difference between marriage with accrual and marriage without accrual, consider their existing financial circumstances and ensure that the ANC accurately records the arrangement they intend.
If you intend to marry out of community of property, deal with your antenuptial contract before the marriage takes place. Leaving the matrimonial property discussion until afterwards can turn a relatively straightforward process into a far more complicated legal exercise.
Antenuptial Contracts & Matrimonial Property
Danel Campbell Attorneys assists clients with matrimonial property advice and related family-law matters, including understanding the legal consequences of different matrimonial property systems.
Explore Family Law Services →This article provides general information about antenuptial contracts and matrimonial property systems in South Africa and does not constitute legal advice. The appropriate matrimonial property regime, wording of an antenuptial contract and legal consequences for a particular couple depend on their individual circumstances and the applicable law.