Simply put, an ante-nuptial contract (or ANC) is a marriage contract.  It is signed before you get married and it predominantly governs the effect of marriage on your assets and liabilities.

It is our view that an ANC is an essential requirement when getting married, possibly the most important document you will ever sign.

To understand why an ANC is so important, you need to understand the 3 main types of marriages or “matrimonial property systems”:

• Marriage in community of property.
• Marriage out of community of property (without the accrual system).
• Marriage out of community of property (with the accrual system).

The main purpose of entering into an ANC is to ensure that your marriage will be out of community of property (the accrual system will automatically apply to the contract unless you specifically exclude it).

You must sign the ANC before you get married.

MARRIAGE OUT OF COMMUNITY WITHOUT THE ACCRUAL SYSTEM

Overview

Signing this kind of an ANC will result in both parties having completely separate Estates before, during and after the marriage; they will not share in any assets or liabilities by virtue of their marriage.

Of course, separate agreements can still be concluded regarding co-ownership of assets (e.g. joint ownership of a house) if the parties desire.

This kind of ANC is useful in the following circumstances:

• Older couples with grown children, and no intention to have children together, who have amassed their own respective Estates and, in the normal course, would not require financial support from one another.
• Instances where the interest of the children of either party would best be served by the parties’ Estates remaining separate (e.g. where a party has children from previous relationships and only those children should benefit from that party’s Estate. If the couple intends having children of there own, this kind of ANC is probably not advisable).
• Both parties fall into an exceptionally high earning group and they plan not to have children at all.

The introduction of the accrual system was intended to benefit women who may be out of the labour market for extended periods due to possible domestic or maternal obligations. If you are considering this option, it is recommended that both parties obtain independent legal advice.

MARRIAGE OUT OF COMMUNITY OF PROPERTY WITH THE ACCRUAL SYSTEM

Overview

Signing this kind of an ANC will result in both parties having separate Estates and separate liabilities; however, the increase in the nett value of the parties Estates during the marriage will be subject to an accrual calculation (see below), which will be shared between the parties.

The Accrual System

• The respective Estates of the parties remain separate.
• During the marriage each party retains control over their respective Estates; they build up up their own estates and each is responsible for their own debts.
• When the marriage ends, either by death or divorce, the value of the assets obtained during the marriage (“the accrual”) will be shared equally between the parties.
  • To calculate the accrual, the starting nett value of each party’s Estate (stated in the ANC) is subtracted from the final value of that party’s Estate.
  • This is done for both parties’ Estates, then the value of lesser Estate is subtracted from the greater Estate.
  • The balance is then divided equally between the parties.

The advantages of this kind of ANC are obvious as the parties do not share in liabilities and they do share equally in the increased value of their Estates for the time they are married; it is the preferred option for most marriages today.

DISCLAIMER: THERE ARE MORE CONSIDERATIONS THAN WE CAN COVER IN THIS ARTICLE SO ONLY USE THIS INFORMATION AS A GUIDE.   THIS INFORMATION DOES NOT CONSTITUTE LEGAL ADVICE.  IT IS ALWAYS BEST TO DISCUSS YOUR SITUATION WITH AN ATTORNEY; CONTACT US AT 0861 88 88 35; helpdesk@gcm-legal.com AND THROUGH THE CONTACT FORM ON THIS PAGE.