About To Marry? Don’t Forget Your ANC and the 3 Types of Marriage
“And she's got brains enough for two, which is the exact quantity the girl who marries you will need” (P.G. Wodehouse)
Wedding Season being once again well and truly upon us, the chances are high that even if you yourself aren’t contemplating marriage you know of someone who is. If so, please think of forwarding this article to them.
Planning and preparing for your wedding is an exciting and busy time, and your ‘To Do’ list will be a long one. Plus you will be stressed for time, and distracted, and it will be tempting to put the “boring” legal bits and pieces low down on your list.
Don’t do that! A visit to your lawyer is an essential, not a “nice to have” to be squashed in between “Book Airbnb for Auntie Jo” and “Bath dog”. First on the agenda for your legal consultation will be an ANC…
Your ANC – what it is and why it is vital
Your ANC or “antenuptial contract” is an agreement you enter into with your future spouse, before you get married, which regulates your financial (and to some extent your personal) affairs.
Do not be put off the idea of an ANC because you think it might be an admission that your marriage may fail. For two very good reasons it is nothing more nor less than a vitally important part of your future planning –
- Firstly, no matter how strong your marriage may be, our divorce statistics make it very unwise to discount the possibility – however remote - that for some unforeseeable reason and at some unforeseeable time in the future, one or both of you will be visiting a divorce lawyer. Whose first question will be “Let me see your ANC”.
- Secondly, an uninformed choice now will have serious consequences for you, for your spouse and in due course for your children both throughout your marriage and when (not if) one of you dies.
Choosing the marital regime that is right for you
Our law allows you three options, which we discuss below.
Bear in mind that this is a summary only and that no article can do full justice to the many individual factors you should take into account. That’s why a visit to your attorney – well before you actually tie the knot - is vital. Ask what the right option is for your particular needs and circumstances, and have your ANC tailored accordingly.
Your 3 choices, and a trap for the unwary
- Marry in community of property: All of your assets and liabilities are merged into one “joint estate”, in which each of you has an undivided half share. Everything (with only a few specific exceptions) that you bring into or acquire during your marriage falls into this joint estate. You will need your spouse’s written consent for some important transactions. On divorce or death the joint estate (including any profit or loss) is split equally between you, regardless of what each of you brought into the marriage, or contributed to it thereafter. If one of you runs up debts or gets into financial difficulties, it is the joint estate that must pay – you could lose everything if your joint estate is sequestrated. That all makes this option unsuitable for many couples. The big danger for the unwary is that it is the default regime - so you will automatically be married in community of property if you don’t specify otherwise in an ANC executed before you marry.
- Marry out of community of property without the accrual system: Your own assets and liabilities, both what you bring in and what you acquire during the marriage, remain exclusively yours to do with as you wish – so you don’t need your spouse’s consent for any of your own transactions. You are not liable for your spouse’s separate debts and if your spouse’s estate is sequestrated you can claim your separate assets back (you will need to prove that they are indeed yours). Note that the “accrual system” (see option 3 below) will apply to you unless your ANC specifically excludes it. Excluding accrual will be the right choice for some, but be aware that without accrual the poorer spouse (usually a spouse whose contribution to the marriage was more on the home-making side rather than financial) risks being left destitute after many years of marriage.
- Marry out of community of property with the accrual system: Firstly, although this is often seen as being the fairest and most popular option for modern marriages, it is not necessarily the best choice for everyone. As with the previous option, your own assets and liabilities remain solely yours, you don’t need your spouse’s consent for any transactions relating to them, and you can protect your own assets from your spouse’s creditors. On divorce or death you share equally in the “accrual” (growth) of your assets (with a few exceptions) during the marriage, as the example below illustrates –