GETTING MARRIED? LET SCHNETLER’S GUIDE YOU IN CHOOSING A MARITAL REGIME TO SUIT YOUR REQUIREMENTS

In our last month’s newsletter, we provided some insight into marriages which are classed as “In Community of Property”. In this month’s newsletter, we shall address “Out of Community of Property” marriages and the impact of the “accrual system”.

Should you wish to read last month’s article, you may find it on our website under the “News” tab, titled “Let Schnetler’s help you to tie the knot”.

ANTENUPTIAL CONTRACTS

An Antenuptial Contract is a marriage contract which is entered into between two persons who are intending to be married to one another. In this contract, the terms and conditions which will govern the marriage will be set out, more particularly the matrimonial property system which is to apply to their marriage.

There are two options of such Antenuptial Contract:

1. excluding the accrual system
2. including the accrual system

OUT OF COMMUNITY OF PROPERTY WITH THE ACCRUAL SYSTEM

The accrual system is, in theory, the best of all matrimonial property systems. During the subsistence of the marriage, the spouses have separate estates. The accrual of the estates of each spouse is the amount by which the nett value of the estate at dissolution of the marriage (either by death or divorce) exceeds the nett value of the estate at the commencement of the marriage. Hence, the nett value of the estate at date of marriage is deducted from the nett value of the estate at date of dissolution thereof. If the result is zero, then there has been no accrual.

There are, however, certain items which are not included in the value of the spouses’ estates at date of dissolution of the marriage:

1. Monies received by a spouse by way of damages for non-patrimonial loss e.g. payment received in a civil litigation for defamation of character.

2. Any asset which the spouse has excluded from the accrual in the Antenuptial Contract, as well as any asset which has been acquired by virtue of such excluded asset e.g. property which is sold with a new property being bought with these proceeds.

3. Inheritances, legacies and donations which accrued to the spouse during the marriage, as well as any asset acquired by virtue of such inheritance, legacy or donation.

4. Donations between the spouses.

OUT OF COMMUNITY OF PROPERTY WITHOUT THE ACCRUAL SYSTEM

The exclusion of the accrual system can be explained as follows – each spouse has a separate estate from the other. Thus, at termination of the marriage, each spouse retains their own estates, with there being no division whatsoever.

The main disadvantage of being married without the accrual system, is that no matter how long the marriage has endured, and how much one spouse has contributed to the other spouse’s success, he/she does not have a right to share in that person’s gains.

Should you wish to discuss the Marital Regime options further, or should you wish to have an Antenuptial Contract drafted, kindly contact one of our Notaries who will be pleased to help you reach the best decision for your future marriage.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).