Weddingguide


	MARRIAGE CONTRACT
	by VGV Attorneys

	The most beautiful day of your life is around the corner. You have decided to
	take the big step and marry your loved one.

	As our grandmothers advised our parents and our parents advise us, financial
	stability is one of the corner stones of any marriage. Our parents like to
	advocate hard work and a steady income, but often fail to teach us how to
	protect our assets.

	One of the easiest methods to do this is to give careful consideration and
	choose the correct matrimonial regime for your marriage.
	There are two matrimonial regimes to consider:
	A marriage in Community of Property
	A marriage out of Community of Property (with or without the Accrual System)

	If you marry without a proper contract (for which you will need an attorney) you
	will be married in Community of Property. In this case you will only be able to
	protect your assets adequately if you enter into a formal contract with your
	future spouse, which is the first step in reaching financial stability.

	MARRIAGE IN COMMUNITY OF PROPERTY
	Being married in Community of Property will have a major impact on your
	independence to enter into contracts, and will influence your estate planning.
	You are equally liable for the debts of your spouse and will be sequestrated
	with your spouse, should he (or she) be unable to pay his/her debts. In the
	unfortunate event of your marriage ending in divorce, your shared
	responsibility will complicate an already difficult situation even further.

	If you are married in Community of Property you will need the signature of
	your spouse on most of the contracts you will have to sign during your married
	life. Your spouse will be co-owner of all assets you acquire, which entitles and
	obliges him/her to co-sign all contracts. The same logic applies to debts
	incurred by either spouse. Most financial institutions require both parties to
	sign a contract for a personal loan where the spouses are married in
	Community of Property.

	Both you and your spouse have to sign all documents when purchasing a
	house, even if it is for investment purposes. You do not have the choice to
	register the property in the name of only one spouse. It will be registered in
	both your names and you will be co-owners of the house. This may not sound
	like a bad thing, but keep in mind that you do not have the choice to register
	the property in any other way. Should your husband/wife start his/her own
	business – success as well as failure is just a flip of a coin away. If failure
	befalls you, your family home will always be at the mercy of the business’
	creditors.

	This brings us to the dangers of sequestration. Most of us have fixed financial
	obligations, i.e. the repayments on a new car. If you are married in
	Community of Property, the car is not yours – it belongs to you and your
	spouse. Once again this sounds very romantic, but when creditors threaten to
	take away your beautiful new BMW and the Sheriff of the Court leaves you
	with nothing but a very empty feeling, romance flies out of the window and
	does not have the same ring as before.

	If you should ever be so unfortunate as to go through a divorce, your spouse
	will be entitled to half of all your assets. This will entail that the pearl earrings
	that belonged to your mother or the holiday house that your deceased father
	bought years ago may not belong to you in its entirety.
	Though this is true, also take into consideration that the financial situation of
	your marriage will have a much greater impact on your life than that of your
	photo album. Maybe consider downsizing on the flowers, think about hiring
	your wedding dress, but make sure that you consult with an attorney at least
	one week before your wedding.





	CHANGING YOUR MARRIAGE REGIME
	If you do not enter into an antenuptial contract before your wedding day, your
	marital status could still be altered afterwards. This is costly and time
	consuming. You will have to apply in the High Court to change your marital
	regime. Even if your application is successful, you will not be able to escape
	your spouse’s current debts. You will only be protected against debts incurred
	after the court order is granted.

	Remember: decide in haste, repent at leisure. Making an informed choice can
	have a very positive impact on your future. Make an appointment with an
	attorney and rest assured that you and your spouse have made the right
	decision.

	Even though your spouse might have been completely at fault in a divorce, it
	will not necessarily protect your assets and you may lose things with great
	sentimental value or financial worth.

	MARRIAGE OUT OF COMMUNITY OF PROPERTY
	This type of contract simply dictates that each of the spouses retains his or her
	property as their own, as well as the assets which they might acquire during
	the marriage. They are only liable for their own debts and not that of their
	spouse. There is no sharing of assets, debts or profits of any kind at the
	dissolution of the marriage.

	THE ACCRUAL SYSTEM
	Marriages out of Community of Property can be very unfair to wives and
	especially mothers. Very often wives sacrifice their careers for the sake of their
	homes and children. Husbands stay economically active, amassing a large
	estate, whereas the mother/wife’s assets are selflessly given to and shared with
	the other members of the family.

	The Accrual System was introduced in 1984 in order to bridge a gap between
	the two existing extremes, namely joint ownership of property (in Community
	of Property) and complete separation of property (out of Community of
	Property).

	The Accrual System is only applicable to marriages out of Community of
	Property. It grants the same protection as that of the out of Community of
	Property agreement, in terms of any claims from creditors. Husband and wife
	are, however, entitled to share all wealth accumulated after date of marriage,
	without discriminating against the spouse who looks after family and home
	without earning an income. This is, for obvious reasons, the most popular
	system at present.

	HOW THE ACCRUAL SYSTEM OPERATES:
	Accrual means ‘the combined growth of the estate of each spouse during the
	marriage’. The net value (assets less liabilities) of the assets of each spouse is
	calculated at the beginning of the marriage and recorded in the antenuptial
	contract. All assets accumulated during the marriage are shared by both
	spouses. Certain assets can be identified and excluded from the operation of
	the accrual system, for example a family heirloom.

	HOW THE ACCRUAL IS CALCULATED:
	The accrual in the estate of each spouse is calculated on date of termination
	of the marriage by subtracting the respective commencement values from the
	values on date of termination of the marriage. This is adjusted according to
	inflation.

	Antenuptial contracts are drafted by attorneys and must be executed in front of
	a Notary Public, an attorney with special qualifications.
	Most people will advise you to spend money on a good photographer, seeing
	that these are often the only tangible memories you have of your big day.