The big day is approaching. Mom is running up and down like a madwoman juggling caterer, florist, and the ‘Dominie’*.
Dad’s sitting on the sofa with a contented smile on his face, telling everyone within earshot that ‘everyone just needs to calm down and relax’…
Hours and hours of preparation are put into planning one of the most important days in your life, BUT…How much thought have you put into planning your marital regime?
And no, I’m not talking about ‘who gets what’ if it comes to divorce – I’m talking about things like estate planning and life insurance.
Robert and Diane approached us recently and wanted to know what options they had besides getting married in community of property. Diane owned a small start-up business and wanted this kept out of the joint estate should the business go ‘belly-up’.
I immediately suggested an antenuptial contract with the accrual system and not the ANC without the accrual system.
Robert wanted to know the difference between the two so I started off by explaining the antenuptial contract excluding the accrual system…
You might recall that in my community of property article I mentioned that marriages without an antenuptial contract are automatically marriages in community of property.
ANC marriages therefore have to include some form of legal contract which is entered into prior to the marriage. This contract is drafted by an attorney and then registered at the deeds office.
Now there’s a very important date when it comes to antenuptial contracts…
I don’t know how many times we’ve met with clients who’ve been married for ‘yonks’ (ages!), who know they’re married, who know they’re married ANC, but who don’t know whether they’re married with or without the accrual system.
The date in question is 01 November 1984!
All antenuptial contracts drawn up after this date are deemed to be ‘with accrual’, UNLESS…you exclude the accrual and record it as such in the contract.
Marriages prior to this date are without the accrual system (although you can amend the contract to include the accrual if both parties agree to this).
What’s the major benefit of getting married with an antenuptial contract without the accrual?
Well Robert and Diane are treated as two separate individuals in terms of the law. Robert can enter into contracts without Diane’s permission and vice versa.
With an ANC excluding the accrual, Robert’s assets are kept separate from those of Diane. Should they divorce – or either spouse pass away – then neither party has a claim on the others assets.
What’s the major drawback when it comes to an antenuptial contract without the accrual?
Well let’s say that Robert decides to become a stay at home dad.
Diane goes out, brings in the money, and buys all the assets in her name.
Should they ever split up Robert could quite possibly walk out with nothing!
This is exactly the reason why the accrual system was introduced…
“We’re definitely going the ANC route…so what happens if I’m sequestrated. Can I say I that everything belongs to Robert?”
Let’s make one thing clear.
If you marry someone with a bad credit record, then, as long as you get married with an antenuptial contract, you’re safe!
If one of you gets sequestrated during the marriage you’re still safe, BUT…
What often happens is that the sequestrated spouse tries to protect their assets by saying that they belong to the other spouse.
By saying this, the sequestrated spouse has just dumped the solvent spouse in the poo.
It’s now up to the solvent spouse to prove ownership of all these assets!
Here’s the kicker…
Let’s assume that Diane buys a property in Robert’s name. Remember that Robert is a stay at home dad which means that Diane has paid for it. That property – even though it’s in Robert’s name – will be attached!
In our next article on love and marriage we’ll discuss the accrual system in more detail.
You won’t want to miss that one!
Till tomorrow
* A Pastor or Priest
Related posts:
- Financial Planning | Love, Marriage, And The Accrual System
- For Better Or For Worse…We’re Married In Community Of Property!
- Financial Planning | What Forms The Basis Of Valid Insurance Contracts
- Financial Planning | We Are Married COP And My Spouse Is Insolvent
- Legally Speaking, Isn’t ‘Living Together’ The Same Thing As Being Married?
Article by Lawrence
Someone, who as he gets older, finds he has more questions than answers
Lawrence has written 150 awesome articles for us at Insurance Fundi
