...and they lived happily ever after

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"Unfortunately in real life not all fairy-tale starts have a happy ending. Sometimes it can feel more like a horror movie; therefore it is important to be aware of the less romantic elements of marriage, such as your marriage contract, before you find yourself in a horror situation," said Geraldine Macpherson, legal marketing specialist of Liberty.

Macpherson went on to comment: "When getting married there are different contracts that you and your partner can choose to adopt. No couple's situation is the same, so ensure that whatever contract you enter into is best suited to both your needs and does not favour one partner over the other."

An ante-nuptial contract, or ANC, or prenup as some refer to it, is a contract that you and your partner will enter into when you get married. It outlines the conditions or exclusions of any property between you.

Automatically married "in community of property"

In South Africa, a couple is automatically married "in community of property". Simply put, everything that each individual owned and any debts they may have before they got married are put together into a joint estate. From the time they are married, anything and everything they earn or buy will be included in this joint estate, including any debt or liabilities incurred by either one of them.

Within the ante-nuptial contract set-up, a couple can choose to be married out of community of property with the accrual system or out of community of property without the accrual system.

Macpherson explained: "Couples who choose to get married out of community of property with the accrual system enter their marriage with assets they already own. Should their marriage end or a partner passes away, they will leave the marriage with those same assets. However, any profit accumulated during the marriage will be shared amongst the couple. But if one spouse has a smaller accrual, they are entitled to claim against their spouse for an equal amount or the difference between the accrual."

Should this not be a suitable option and a couple would rather have no blurred lines, they can choose a contract that is out of community of property without the accrual system.

What this means is any asset that you enter into the marriage with, you will leave with. Should you, during the time that you are married, obtain any form of asset, ie. a car or a house, when you purchase this item it will be in the name of one or the other spouse. Should the marriage come to an end each partner walks away with exactly what they own and neither partner can claim against the other.

Choosing a contract

But what does this all mean and what should you be taking into consideration before choosing a contract that is best suited to you?

When you stand before your partner and exchange vows, one vow you promise is "for ever after". Carefully consider what this means. Look at each partner's responsibilities and their needs and should the marriage end or a partner passes away, will your estate be able to ensure that everything that needs to be taken care of is? Consider:

• What immediate responsibilities does each partner have? Does the deceased have children from a previous marriage or possibly parents that depend on them? How will the accrual impact on this specific bequest?
  
• If one partner, upon their passing, wishes to leave assets/or a donation of his estate to someone other than the survivor - how does the accrual impact on this?
  
• What is the deceased spouse did not have a will? What if that person has children and the smaller estate from an accrual perspective? Where will the survivor get the liquidity to pay into the estate?

"Everybody wants to live their happy ending, but remember life happens and before you get pulled into the land of fairy tales, speak to someone who knows, who can advise you to make the right decision," concluded Macpherson.