When it comes to discussions about antenuptial contracts, there is often some confusion regarding certain terms. For clarification, here is an explanation of three terms that couples are bound to come across when researching information on these contracts.
An antenuptial contract, known colloquially as a prenuptial contract (or “prenup”), is a private agreement entered into between a couple who plan to get married. The purpose of the contract is to change some or all of the automatic financial values of marriage.
The prenup allows the 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. It is tricky to change a prenup because they dictate the financial and proprietary outcomes of the couple’s future and can affect the rights of the couple’s creditors.
A prenup dictates the division of the couple’s assets in the event of divorce or death. Under South African law, this contract determines whether your marriage will exist in one of the three marriage regimes below:
- In community of property; all assets and liabilities are shared and jointly owned by spouses.
- Out of community of property with accrual; each spouse declares his/her estate’s nominal value at the start of the marriage and keeps their assets and liabilities, unless expressly included.
- Out of community of property; all assets and liabilities of the spouses are separate, unless otherwise stated in the antenuptial contract.
Prenuptial contract (“prenup”)
The term, “prenuptial contract”, or “prenup”, is simply another term for “antenuptial contract”. They are in fact the same thing and can be used interchangeably. The colloquial term, “prenup”, is what it is generally referred to.
In terms of South African law, if a couple does not sign an antenuptial contract before their marriage, they are automatically deemed to be married in community of property. So, all assets and liabilities are automatically shared and jointly owned by the couple.
If a couple has already married without signing a prenup, they are able to register a postnuptial contract. A postnuptial agreement allows married couples to change their matrimonial property regime from “in” to “out” of community of property. This can be an expensive process, however, and requires the following under the Matrimonial Property Act:
- There must be sound reasons for the proposed change
- There must be sufficient notice of the proposed change to all creditors and the Registrar of Deeds
- The court must be satisfied that no other person will be prejudiced by the change