Benefits of antenuptial contracts

Purpose and benefits of antenuptial contracts

If you’re thinking of getting married, you may wonder if you need an antenuptial contract (ANC or, colloquially, pre-nup). Or perhaps a friend or relative is planning a wedding and you’re wondering why they are fretting over their pre-nup when there is so much to do for the ceremony. Although ANCs were historically associated with wealth and fame, or sometimes second marriage, today they are becoming more widespread. What’s behind their increasing popularity, what are the benefits of antenuptial contracts, and should you consider one for your marriage?

Society is changing and, with it, the nature of relationships. According to Stats SA, 25% of South African households (around 4.6 million) are single-person households. That would have been unthinkable 50 years ago, when the average age of marriage was younger and many people went straight from the parental home to a marital home. Today the median age of women in civil marriages is 33 and men 35 (slightly younger for women and older for men in customary marriages). This means that couples enter marriage with assets of their own, often including residential property and possibly business interests. If they marry in community of property – the traditional default matrimonial regime – all their assets (and liabilities, such as debts) become part of a joint estate. If the marriage ends in divorce, assets and liabilities are equally divided. Not everyone wants this.

What is an ANC?

An antenuptial contract is a legal document that outlines the financial and property rights of spouses before marriage. It serves to protect assets, clarify financial responsibilities, and prevent future disputes in the event of divorce or death. Without an ANC, a marriage is automatically in community of property, meaning that all assets and liabilities are shared equally between spouses. This default position is governed by Section 2 of the Matrimonial Property Act. If a couple instead chooses to marry out of community of property (with or without accrual), they must execute an ANC before marriage. 

Understanding matrimonial regimes 

Marriage out of community of property without accrual allows each spouse to retain ownership of their respective assets and liabilities, both during the marriage and upon its dissolution. This type of contract is often chosen by individuals who wish to protect existing assets or have significant business interests they do not want to divide. This absolute protection of assets has been challenged in the courts recently and there could be legal developments that affect divorce proceedings for couples married out of community of property without accrual. The Constitutional Court issued a ruling declaring Section 7(4) of the Divorce Act unconstitutional, which could potentially lead to a redistribution of wealth even where this regime is in place. For this exception to be granted, one spouse must have contributed to the growth of the other spouse’s estate by any means. Currently, the legislation has not been changed; but we will provide information on legal updates as they happen.

Marriage out of community of property with accrual grants each spouse control of assets acquired before the marriage but ensures that any wealth accumulated during the marriage is shared equitably upon divorce. The accrual system is regulated by Sections 3 and 4 of the Matrimonial Property Act.

Legal requirements for a valid ANC

To be legally binding, an ANC must be executed before the marriage takes place and must be signed in the presence of a notary public. Once signed, the contract must be registered with the Deeds Office within three months of execution. Failure to register the contract within this timeframe means the marriage will automatically be in community of property, regardless of the couple’s original intentions. Furthermore, registered ANC contracts are legally enforceable against third parties, including creditors, ensuring the financial arrangements agreed upon by the spouses are protected from external claims.

Benefits of antenuptial contracts

One of the primary advantages of an ANC is asset protection, as it keeps assets acquired before the marriage separate from the marital estate. This is particularly beneficial for individuals with significant personal wealth or business interests. Additionally, an ANC protects each spouse from the debts of the other, which may be important if one spouse has substantial financial liabilities.

Another important benefit is its role in estate planning. An ANC allows spouses to structure their financial affairs in a manner that aligns with their succession planning objectives. This may be particularly relevant in second marriages where there are children from a previous marriage or marriages and the parents want to protect their inheritance. The agreement can also provide business security, safeguarding commercial interests from marital claims. Furthermore, in the event of divorce, an ANC prevents lengthy and costly legal disputes by clearly defining the division of assets in advance.

Cape Town family lawyer can help

A properly drafted and registered ANC is a legal tool that provides financial clarity and security for both spouses. At Simon Dippenaar and Associates we are experts in family law, based in Cape Town, with offices in Johannesburg and Durban. We can help you decide which type of marriage is best for you and draft an appropriate ANC. 

If you choose marriage out of community of property with accrual, we can assist with the valuation of your respective estates prior to the marriage and draw up the corresponding contract. If you would like to discuss your options, call Simon today on 086 099 5146 or email sdippenaar@sdlaw.co.za for a discussion in complete confidence.

Further reading:

• The importance of an antenuptial contract
• Antenuptial contracts – the accrual system
• Antenuptial agreement now available to women in customary marriages
• The financial consequences of your marriage contract
• New court ruling has massive implications for marriage and divorce in South Africa

Simon Dippenaar

Founder & Managing Partner, SD Law

Attorney Simon Dippenaar has a BBusSc LLB degree and Professional Diploma in Legal Practice from the University of Cape Town, and is an admitted attorney of the High Court of South Africa. He is the founder and director of private legal practice, Simon Dippenaar & Associates, with offices in Cape Town and Gauteng representing South African and international clients.

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