Before you sign a contract

04/10/2013 16:15

Marriage regimes and  Contracts

Ensure that you read and understand every contract that you sign especially your anti-nuptial contract. Marriage is a legal agreement between two parties with financial consequences. Put the same amount of effort in to your financial planning and structuring of your marriage contract as you do with planning of the wedding and reception.

 Types of contracts:

  • ANC ,  Anti –Nuptial Contract.
  • ANC with Accrual  (You can stipulate that the accrual takes effect after a certain period example 3 years.)
  • In community of property.

 

I think every Anti-nuptial contract should be accompanied by an Assets and Liabilities Statement when you decide to get married, especially if you are older and have accrued some assets. This  assets and liabilities sheet should then be reviewed annually with your financial advisor and you should be aware of any changes like reduced debt or new assets.

 

There is a big difference between: “Creating wealth in your mind vs. creating wealth on paper”  paper is powerful, measureable and dividable. If you are not aware of what is going on in financial life during marriage then you wont have any idea if you have to get a divorce. Gaining access to this information at divorce stage is  not only stressful but also costly.

 

If you are in a position to care for the children while your other half is working and putting bread on the table, you should still know “how” the  bread gets on the table. Make it your goal to understand finances and see it as a goal.

 

Division of Estate when married ANC with Accrual:

 

Spouse A

Value

Spouse B

Value

Home

R 1 900 000

House

R 700 000

Motor

R 300 000

Motor

R 240 000

Household Content

R 70 000

Household Content

R 80 000

Time Share

R 50 000

 

 

Pension Funds

R 2 500 000

 

 

 

 

 

 

Total

R 4 820 000

Total

R 1 020 000

Liabilities

R 740 000

Liabilities

R 200 000

Total

R 4 080 000

Total

R 820 000

       

Total A -

R 4 080 000

   

Total  B

R 820 000

   

50% share

R 3 260 000

   

Claim against B

R 1 630 000

   

 

 

The following is not part of the accrual and cannot be taken into considderation when doing the accrual calculation:

  • Inheritance and donation between spouses.
  • Assets that have  been excluded  from the marriage and stipulated in the contract.
  • Assets bought that replaced excluded assets.
  • Life cover.
  • Damages awarded to a spouse by a court of law.

 

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 Disclaimer: all the information supplied by this website are intended as guidelines only, it is advisable to contact Divorcesmart directly for appropriate advice for your unique circumstances