When two people marry in South Africa, their assets and liabilities are governed by a matrimonial property regime. If no antenuptial contract is signed before the marriage, the default regime applies automatically. That default is in community of property, which means that the assets and liabilities of both spouses are merged into a single joint estate from the moment of marriage.
Many people are not aware of that default, or do not appreciate its implications, until something goes wrong. A business started before the marriage, a property purchased before the marriage, or an inheritance received by one spouse can all become part of the joint estate if no ANC is in place. More significantly, the debts of one spouse become the debts of the other. That is not always what the parties intended, but it is what the law produces in the absence of a contrary agreement.
The three property regimes in South African law
South African law currently recognises three matrimonial property regimes. The first is in community of property, which applies by default if no ANC is signed. In this regime, a single joint estate is formed on marriage. Both spouses have equal undivided shares in that estate, and the debts of either spouse are enforceable against it.
The second regime is out of community of property without the accrual system. This requires a properly executed ANC. In this regime, each spouse's estate remains entirely separate throughout the marriage and on dissolution. Each party keeps what they own and is responsible only for their own debts. There is no sharing of growth or gain on dissolution, which suits parties who want complete financial independence.
The third regime is out of community of property with the accrual system. This also requires an ANC, which must expressly include the accrual system. In this regime, the estates remain separate during the marriage but at dissolution, whether by death or divorce, each spouse has a claim against the other for a share of the accrual. The accrual is the growth in each estate during the marriage, calculated from a commencement value declared in the ANC.
How the accrual system works in practice
The accrual system is often described as a middle path. It allows spouses to maintain financial independence during the marriage while sharing in the economic partnership at the end of it. At dissolution, the spouse whose estate shows the smaller accrual has a claim against the other for half the difference between the two accruals.
The commencement value, which is declared in the ANC at the time of signing, represents what each party brings into the marriage. Assets that existed before the marriage are excluded from the accrual calculation, provided they are properly declared. Inheritances and donations received during the marriage can also be excluded from the accrual, but this must be stated expressly in the ANC. Without that express exclusion, they may fall into the accrual and be included in the calculation at dissolution.
Getting the commencement values right and choosing what to include or exclude from the accrual are two of the most important drafting decisions in any ANC that incorporates the accrual system.
Why the default in community of property regime can be a problem
The in community of property regime has real consequences that are not always obvious at the start of a marriage. Because the estates are merged, neither spouse can generally dispose of assets that form part of the joint estate without the consent of the other. That restriction applies to immovable property, but also to other assets depending on the circumstances. A spouse who runs a business will find that the business and its assets form part of the joint estate unless they are excluded by an ANC.
The position regarding debt is equally significant. In community of property, a creditor can generally proceed against the joint estate for a debt incurred by either spouse. That means the other spouse's assets and income are exposed to claims arising from the other's financial decisions. Where one spouse has business risk, personal surety obligations, or significant credit exposure, the in community of property default can create serious problems for the other.
What the ANC must contain
A valid ANC must be prepared by a notary public, signed before the marriage, and registered in the Deeds Office within three months of execution. It must clearly state that the marriage is out of community of property. If the accrual system is to apply, the ANC must say so expressly and state the commencement values of both parties' estates. If particular assets or categories of assets are to be excluded from the accrual, those exclusions must be stated in the contract.
An ANC that does not meet those requirements, or that is not registered within the prescribed period, may not have the intended effect. The notary's role is not merely to witness signatures. It is to ensure that the contract is correctly drafted, that both parties understand and consent to its terms, and that the registration process is completed.
The antenuptial contract and third parties
The ANC protects the parties to the marriage, but it also affects third parties who deal with either spouse. A creditor considering whether to extend credit or take security will want to know the matrimonial property regime. A co-investor, business partner, or property co-owner may also need to understand whether the other spouse has any claim over the assets involved.
Registration of the ANC in the Deeds Office serves the function of making the regime public. An unregistered ANC can still be valid between the spouses but may not be enforceable against third parties who did not know of it. That is why the registration step is not optional.
Timing is not flexible
The ANC must be signed before the marriage ceremony takes place. There is no provision for a post-nuptial contract of the same kind in ordinary South African law. Couples who marry without an ANC and later wish to change their regime must apply to the High Court, which is a separate, more involved and more costly process. The court has the power to authorise a change of regime where good cause is shown and creditors' interests are not prejudiced, but it is not a routine matter.
The practical consequence is that the time to deal with an antenuptial contract is well before the wedding, not the day before. The contract should be discussed, drafted, reviewed, signed and submitted for registration with enough lead time to do each step properly. Couples who approach this at the last moment sometimes find that urgency does not serve them well.
Understanding the matrimonial property regime that will govern a marriage is one of the most important legal decisions a couple makes together. The antenuptial contract is the instrument that allows that decision to be made deliberately rather than left to default. Done properly, it protects both parties and provides a clear framework for the financial dimension of the marriage, whatever the future may bring.