As you plan your happily ever after, there might be a little something waiting for your legal attention: a prenuptial agreement. Most couples want to avoid any discussion about prenups as they fear the word divorce. You won’t be jinxing your chances at happily ever after by discussing a prenuptial agreement, the idea is to protect both parties and their assets
A prenuptial agreement is signed by two people before they get married and is a legally binding contract which addresses all financial issues involved in the marriage. The prenup will address financial aspects such as property brought in by each party, property acquired during the marriage and what decisions will be made regarding the division and ownership of the property.
Although it may not be the most ‘romantic’ thing to do but having this honest financial discussion can have a positive effect on your relationship. It also gives you the opportunity to discuss how you will deal with your financial situation throughout your marriage – if you have not already discussed this. So how do you know if a prenuptial agreement is right for you as a couple?
Creating and signing a prenup does not mean that you are planning to get a divorce. Prenuptial contracts go a long way to preserve family ties, inheritance, and financial well-being of children from previous marriages. Personal and business assets accrued before your marriage are protected and a prenup will also state how the assets will be divided in the event of death. In the event of a divorce, a prenup eliminates any battles over assets and money.
Fair warning: prenups are known to cause friction in the relationships and among extended family, especially if there is an inheritance involved. Prenups can create the impression that there is a lack of trust between partners and can create feelings of resentment especially when one party has greater financial wealth than the other.
Prenuptial Agreements are not for everyone, especially if no one is bringing any significant assets into the marriage. Speak openly with your partner, parents or anyone you trust to get their opinion on the matter before you make your final decision.
Married in Community of Property
Couples who are married without a prenup are married in community of property. The couple effectively has one communal estate and are liable for each other’s creditors. This could have a negative impact down the line in the case of death or sequestration. All assets and liabilities are in a joint estate.
If you get into debt, your partner can be held responsible for paying it off if you default and visa versa. If one spouse is paying alimony or child support, the other can be held liable.
Married out of Community of Property
Couples who get married with a prenup are married out of community of property. Each person’s estate is separate, and they have freedom to make decisions and are not liable for the debts of their spouse.
With and Without Accrual
Prenuptial Agreements in South Africa can be created with or without accrual (more about anti-nuptial contracts here). A prenup without accrual means that each respective spouse does not have a claim against the other in the event of divorce. A prenup with accrual means that both parties share in the estate created during the marriage until the dissolution thereof.
Each spouse retains ownership of the estate they brought into the marriage but are required to share the estate acquitted during the marriage.
Being open and honest with your spouse is the easiest way forward to creating a suitable prenuptial agreement in South Africa. This contract serves to put the decisions in your hands instead of leaving it in the hands of a judge. You have the peace of mind that in the event of a divorce that you have nothing to worry about.
Be honest about the terms and conditions that suit you and speak calmly to your spouse about the reasoning behind your decisions and desires. You should listen to your partner’s requests with an open mind and be open to compromise.
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