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An antenuptial contract is a legal agreement between two people who intend to get married. The purpose of the contract is to regulate the financial consequences of their marriage.
An antenuptial contract allows spouses to keep their assets and liabilities separate. This means that each spouse retains ownership of their own assets and is responsible for their own debts. The antenuptial contract can also specify how assets and debts will be divided in the event of divorce or death.
In a marriage in community of property, the spouses share all assets and liabilities equally, regardless of whether they were acquired before or during the marriage. This means that all assets and debts are combined into a single estate, and each spouse has an equal share in the estate.
In South Africa, couples have the option to choose between two types of antenuptial contracts: with or without accrual.
An antenuptial contract with accrual is a contract where the spouses share in the growth of their assets during their marriage. This means that at the end of the marriage, the spouses will split their assets and liabilities equally, but only the growth in value of their assets during the marriage will be considered. The starting point for the calculation of accrual is the value of each spouse's assets at the beginning of the marriage.
An antenuptial contract without accrual is a contract where each spouse keeps their own assets and liabilities separate. In the event of divorce or death, each spouse will keep the assets that they owned before the marriage, as well as any assets they acquired during the marriage. Each spouse will also be responsible for their own debts and liabilities.
The accrual is calculated by subtracting the net value of each spouse's assets at the beginning of the marriage from the net value of each spouse's assets at the end of the marriage. The spouse with the smaller accrual will receive half of the difference between the two accruals, and the spouse with the larger accrual will keep the other half. It is important to note that certain assets, such as inheritances and gifts, are excluded from the calculation of accrual.
If you are considering getting married in South Africa and would like to learn more about antenuptial contracts, please contact us to schedule a consultation.
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