Don't let marriage tie you in financial knots

For those who are ready to tie the knot, decisions around whether to marry in or out of community of property may lead to resentment if not addressed properly.

Bertus Preller, a family law attorney, said drawing up an antenuptial contract should not be rushed or left to the last minute because couples must be aware of all the implications.

When people are married in community of property, all of the assets acquired individually before getting married become part of the joint estate. This applied to debt as well, said Preller, even debt that existed before the marriage.

There was no protection against creditors, said Preller. "Spouses share in debt and negative growth of the joint estate," he said.

story_article_left1

When it comes to the maintenance of the estate, spouses have equal control and, in some cases, a spouse's consent must be obtained. When making big financial decisions - such as buying a car - the couple should reach a mutual agreement beforehand.

It's also important to note the impact your spouse's credit record has on your own. "The spouses share in each other's creditworthiness, whether good or bad," warned Preller.

Marrying in community of property means each spouse is entitled to half of the net assets and liabilities of the joint estate in the event of divorce. Spouses could take protective measures to ensure their security, but "limited legal remedies are available if a spouse squanders the assets of the joint estate", said Preller.

If a couple choose to marry out of community of property, they have to opt for an antenuptial contract, with or without accrual.

A contract with accrual means assets acquired during the marriage are jointly owned, but the debt is not included. Without accrual means each person's assets belong entirely to them in the event of divorce, and this applies to debt as well.

The accrual refers to the fact that a couple have become richer by the end of their marriage.

The couple could include their own terms and conditions as long as they were legal.

"When married according to the accrual system, each spouse acquires a certain right to the other's property on divorce."

story_article_right2

Preller pointed out that, when people marry out of community of property, the marital property regime chosen must suit theirspecific needs.

In terms of the antenuptial contracts - regardless of the regime - the couple don't share in the growth of each other's assets bought before the marriage. This also applies to debt incurred before. You are also protected from debt your partner incurs in their personal capacity.

This means you can act independently of your spouse when managing and controlling your estate, and do not need consent from your spouse to, for example, buy a car.

When people are married out of community of property and they have an antenuptial contract without accrual, they do not share their assets or the growth of these assets at divorce. This applies to debt and other liabilities as well.

For couples married out of community of property with accrual, the spouse with the smaller portion of the total value of assets accrued is entitled to half of the difference in the respective accruals.