Prenup Breakdown: To Get One or Not?

Plenty of women have somewhat of an idea what a Prenup is by now with all the reality shows we watch on television these days. It is obvious that a lot of people see it as a betrayal of trust and as we view on reality shows, it is a difficult decision to make whether you’re asked to sign the agreement or to draw one up. There is also a preconceived notion that prenups are only for the rich folk who are protecting their wealth from their partners in case of a divorce. It is also displayed that men are quick to introduce a prenup but on the other hand feel offended when asked to sign one. So basically, what is a Prenup and how significant is it?

Wikipedia definition:
“A prenuptial agreement, ante nuptial agreement, or premarital agreement, commonly abbreviated to prenup or prenupt, is a contract entered into prior to marriage, civil union or any other agreement prior to the main agreement by the people intending to marry or contract with each other. The content of a prenuptial agreement can vary widely, but commonly includes provisions for division of property and spousal support in the event of divorce or breakup of marriage. They may also include terms for the forfeiture of assets as a result of divorce on the grounds of adultery; further conditions of guardianship may be included as well.”

Prenuptial agreements are, at best, a partial solution to obviating some of the risks of marital property disputes in times of divorce. They protect minimal assets and are not the final word. Nevertheless, they can be very powerful and limit parties’ property rights and alimony. It may be impossible to set aside a properly drafted and executed prenup. A prenup can dictate not only what happens if the parties divorce, but also what happens when they die. They can act as a contract to make a will and/or eliminate all your rights to property, probate homestead, probate allowance, right to take as a predetermined heir, and the right to act as an executor and administrator of your spouse’s estate.

In South Africa, a civil marriage is, by default, a marriage in community of property. To marry out of community of property, the spouses must sign an ante-nuptial contract in the presence of a notary public. An antenuptial contract can exclude community of property so that each spouse maintains a separate estate with separate assets and liabilities. The contract can also make specific provision for the handling of property and its distribution after death or divorce. In marriages contracted since 1984 with an antenuptial contract, the accrual system will apply to the marriage unless it is specifically excluded by the contract. Under the accrual system, the spouses’ property remains separate for the duration of the marriage, but at the time of death or divorce their estates are adjusted so that the difference in “accrual” between the two estates is divided equally. “Accrual” is the increase of the net value of the estate from the marriage’s commencement to its dissolution. However, the accrual system does not apply if one of the estates is insolvent at the time the marriage ends. In calculating the adjustment, the minimum value an estate of a party can have is zero; negative estate values are not taken into account.

The importance of a prenup/ante nuptial
It is important to understand that a prenup is not a sign of distrust. In fact, creating a prenuptial agreement takes a willingness to be completely open and honest about everything, what you own, what you owe, and how you want to live your financial lives together. That takes absolute trust.
A formal prenuptial agreement is most important if either one of you has considerable assets, large debts, or kids from a previous marriage, anything that makes your finances more complicated. If this isn’t you, a formal agreement is less necessary. Every couple, though, should provide complete financial disclosure and share their feelings about money. This will undoubtedly head off disagreements down the road and create a closer bond.

In my opinion its best that couples do what suits them both and have an extensive talk on these types of important matters. At the end of the day it’s a matter of securing both parties interest should there be an unfortunate separation.

By: Zanele Mash

Source: http://en.wikipedia.org/wiki/Prenuptial_agreement#South_Africa

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