While you are in the throes of planning your wedding, you might pay more attention to the guest list and the cake than drawing up a legal contract with your spouse. After all, you’re in it for the long haul – and you don’t want to ruin the romance by talking about the financial implications of a failed union. However, although it might feel distasteful to discuss contracts before you’ve said ‘I do’, experts agree that knowing how your property will be divided in the case of death or divorce can save you a lot of heartache and unnecessary complications further down the line. It can also have a positive impact on your years together.

    ‘The legal structure of a marriage forms the basis of several material, financial aspects of your life together, including life insurance, investment decisions and the estate you leave to your family,’ says Jeremy Woods, Head of Fiduciary Services at GTC, a financial advisory company.

    Here are the three types of marriage contracts available in South Africa. If you don't draw up an antenuptial contract (ANC), the state will assume you are married in community of property.

    Marriage certificate

    1. Community of Property (COP)

    This means everything you own before getting married – and everything you own, earn or create while married – is shared equally between you and your partner when the marriage ends. 

    While this sounds like the right way to enter a lifelong union, there are important points to note. For example, if your partner accumulates debt, if their owned business tanks, or if a business deal sours during the marriage, you will be held liable for their debt. In other words, your jointly owned home, your income and your other assets can be taken from you to service that debt. 

    COP also makes financial independence virtually impossible. This is because certain transactions, such as buying a car or selling shares, need the consent of both parties. In addition, if one of you dies, your joint estate has to be wound up. This means you will find yourself in legal limbo for a long time.

    That said, there are upsides to this type of marriage contract, too. It means if your spouse is in a tough spot financially, you can offer support. And it encourages a foundation of equality for both legal and financial matters from the start of your marriage.

    2. Antenuptial contract (ANC) without accrual

    This contract means everything you own and acquire before and during the marriage remains separate from your partner’s assets. In other words, you each have a separate estate.

    The good news is you are protected if your partner becomes insolvent because creditors won’t be able to attach your assets. ANC without accrual also affords you full contractual freedom (in other words, you can make purchases without needing your partner’s signature). This type of contract might be the most appropriate if you have already amassed a sizeable estate before saying ‘I do’.

    The downside to ANC without accrual is that when the marriage ends due to death or divorce, you are entitled only to the assets you have in your name. This might seem unfair if you have opted to stay home to raise children while your partner has been the main source of income, as a stay-at-home parent doesn’t have a claim to their spouse’s estate. 

    3. ANC with accrual

    The accrual system means that when your marriage ends, all the assets you and your partner accumulated during your union are shared equally. In other words, everything acquired after getting married is considered part of your joint estate and will be divided equally in the event of divorce. This includes any increase in the net value of your individual estate (such as a home you owned before getting married). You can choose to exclude certain assets from the accrual system, such as an inheritance, or items that hold sentimental value, such as your mother’s jewellery.

    In terms of accrual, you generally won’t be held liable for your partner’s debts. This form of marital property regime is by far the most equitable, especially if one of you puts your career on hold while raising children or caring for extended family.

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    Header photo by Jasmine Wallace Carter from Pexels

    Biddi Rorke