Prenup: What You Need To Know
Most couples experience the ‘honeymoon phase’ a few weeks before they even tie the knot. And why wouldn’t you? In a few short weeks, you’ll be married to the one you love and start your happily ever after together! Love is in the air, and the last thing you want to think about is all the nitty-gritty details of the financials and legalities involved in a marriage. That’s why most couples just avoid the subject of a Prenup entirely. A Prenuptial Agreement is a legal contract which you and your future spouse sign before entering into marriage. It’s a touchy subject because you need to discuss the financial rights of each spouse if the two of you were to ever get divorced. However, you’re not jinxing your marriage by signing a Prenuptial Agreement, the idea is simply for you to protect yourself and your assets.
Here’s what you need to know
What is a Prenup?
A Prenuptial Agreement is a legally binding contract which is created and signed by two people before they get married. In this agreement, you address all financial issues which are going to be involved in your marriage. For example:
- You address issues such as the property brought into the marriage by each person
- The property acquired during the marriage
- What the property rights of each will be should they enter into a divorce
Deciding whether or not to sign a prenuptial agreement can be one of the most difficult decisions which a couple can face during their engagement! Let’s face it- it’s not exactly the most romantic conversation to have, but having this honest financial discussion prior to a wedding ceremony can be a very positive experience. That doesn’t mean that it’s for everybody though. So how do you know if a prenup is for you?
Is a Prenup right for me?
There are a few things to consider before signing a Prenuptial Agreement. Firstly, it is important to remember that signing a prenuptial agreement doesn’t mean that you and your fiancé are anticipating a divorce. They can preserve family ties, inheritance and the financial well-being of children from a previous marriage. In addition, personal and business assets accumulated before your marriage are protected. A Prenup Agreement spells out which assets a spouse may want to give to children or other family members in the event of death. Finally, in the event of a divorce, it eliminates battles over assets and finances.
[VIDEO] How a Prenup Works:
Contacting a Marriage Advisor
Prenuptial Agreements aren’t for all couples, some don’t see the point of getting into all the financial drama, especially if neither of the spouses are bringing massive amounts of assets into the marriage. Before making your mind up about it, why not speak to your parents, a marriage advisor and your fiancé about it? Honesty and communication are key!
Matrimonial Property Regimes in South Africa:
1. Married couples without a Prenuptial Agreement are married in community of property. The effect of this is that the couple has one communal estate and are liable towards each other’s creditors. This is a situation which could potentially have a detrimental effect on the financial well-being of your family; especially in the case of death of a spouse or sequestration. All assets and liabilities are merged in a joint estate in which both spouses, irrespective of the value of their contributions hold equal shares.
2. A married couple with a Prenuptial Agreement is married out of community of property. Each spouse retains his/her own estate and has complete freedom to deal with his/her respective estate. One spouse can therefore not be held liable for the debts of the other.
3. A Prenuptial Agreement can either include or exclude the accrual system.
- An agreement excluding the accrual system means that one spouse will not have a claim against the estate of the other spouse in the event of dissolution of the marriage;
- An agreement including the accrual system has the effect that both parties share in the accrual of the other’s estate; from the commencement of the marriage until dissolution thereof. Each party will be entitled to exclude the value of the estate which he/she brought into the marriage and only share the accrual during the marriage.
Make sure your that your marriage really is “happily ever after” by dealing with the less romantic most important decisions before you are placed in a vulnerable situation where you are unable to do so.