Antenuptial agreements allow a couple to put together their own matrimonial property regime. They can include any provisions they wish in their prenup, on condition that the provisions are not against the law, ethics, or the nature of the marriage.
An antenuptial contract is the most affordable and reliable matrimonial contract that can protect your business assets in the event of a divorce.
Under the accrual system, each spouse states the value of their respective assets at the beginning of marriage. Thereafter, any assets are shared 50-50. One can state that specific assets be excluded from the accrual, for instance, inheritance and donations.
Advantages of accrual:
- The couple shares the increase in their assets accumulated during the marriage and the economically weaker spouse benefits.
- The spouses do not share their assets acquired before their marriage. In this way, the accrual system appeals to people who are already wealthy at the time of marriage.
- During the course of the marriage, each spouse handles his/her estate at will. There is no complex joint or equal administration.
- The spouses are not liable for each other’s debts. All that they share is their net assets. Therefore, if one spouse becomes insolvent (bankrupt), the other spouse is protected against creditors.
Disadvantages of accrual:
- The financially stronger spouse is required to share the assets that he/she acquired during the marriage.
- If one spouse is the breadwinner, the other spouse will be financially dependent on them.
- Antenuptial excluding accrual means that assets acquired before or during the marriage stay separate throughout the course of the marriage. Assets are not shared, and each spouse has a separate estate. This type of regime is usually used by those who have accumulated substantial assets prior to marriage and want to protect them.
Advantages of no accrual:
- The divorce process for a prenup without accrual is financially quicker and simpler.
- The financially and/or economically stronger spouse is not legally obligated to share his/her assets with the financially weaker spouse.
- If one spouse becomes insolvent, creditors may not attach the assets of the other.
- Each of the parties is still legally obliged to offer financial support to one another should one spouse be unable to support himself/herself.
Disadvantages of no accrual:
In the case of divorce or death, a spouse is entitled only to those assets that he/she has accrued in his/her name – should one spouse choose to stay at home, say, to raise children, that spouse would not be entitled to the assets accumulated by the other spouse.
Based on the pros and cons of both types of prenuptial agreements, it is advisable that a couple owning a joint estate sign an antenuptial agreement with accrual.
Read related resource: Registering an antenuptial contract in South Africa.