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Mercenary matters that may seem secondary during the heavy build-up to a wedding, can take on overriding importance once the romance has evaporated
and hard reality sets in.

One of the most common causes of failed marriages cited in the divorce courts is conflict over finance. This underscores the necessity to make explicit plans for death or divorce, and to put financial issues on a sound, clearly understood footing, before wedding bells ring. Afterwards, it will be a question of making the best of the situation.

Central to this financial decision-making is the type of marriage contract; community of property or antenuptial contract with or without accrual.

By default, people who marry without a contract, marry in community of property. This reflects the true spirit of marriage because everything the couple bring into the marriage or acquire belongs to them both as equal shareholders. Since 1984, when the Matrimonial Property Act gave women married under this regime equal status, this has been an attractive option for a woman who has few assets marrying a man of substance. Much less so, of course, for the wealthy man. The down side is that if one spouse becomes insolvent, their mutual estate might be sequestrated and they could both go under.

Unless expressly excluded, marriages under antenuptial contract are subject to accrual and all assets accumulated during the course of the marriage are shared equally when the marriage ends, either by divorce or death. Automatically excluded from accrual sharing are inheritances, gifts, donations, awards for damages of a non-patrimonial nature, as well as assets acquired with the proceeds of excluded property. Anything else may be excluded in terms of the contract - loan accounts, a business, a trust, future pension benefit, insurance policies, property or shares, as well as income from those assets. The accrual system advantage is that if one of them becomes insolvent, the creditors can attach only the assets owned by him or her. If an asset such as the family home is in both their names, the property as a whole cannot be attached and auctioned - only the insolvent spouse's undivided half-share. In such cases, the solvent spouse often goes ahead and buys the half-share cheaply.

This regime is designed to offset the kind of injustices that used to occur when a woman, married under antenuptial contract, spent several decades running the home and raising children, but got no recognition for her contribution to the estate and had no claim against it, except for maintenance. Section 7(3), an amendment to the Divorce Act that came into force in November 1984, gives the courts a wide discretion over the redistribution of estates on divorce in the case of antenuptial contract marriages contracted prior to that date. They may grant anything up to a 50/50 split in the case of a long-standing marriage or the payment of a globular amount.

When a couple starts with an equal base of assets, which, in the case of young adults, is generally not much, there is no doubt that the accrual partnership works very well.

"However, problems that were not foreseen in 1984, are leading to a lot of divorce litigation today" says Attorney Charles Mendelow, who specialises in this field. "They arise when people come into the marriage with estates of different values. Where there is a significant disparity in wealth reflected as commencement values in the antenuptial contract, there is going to be injustice in the event of divorce".

He says this is because, in accordance with a provision in the Matrimonial Property Act, the commencement values of the respective estates are inflation-linked and increase in tandem with the consumer price index. This means the share of the partner who starts off with the higher opening balance grows disproportionately. If, for example, the commencement value of the husband's estate were R100 000,00 and the wife's.

R20 000,00, a decade later the share he would be entitled to take from the joint estate could have automatically increased to R300 000,00 - R400 000,00, whilst hers would be less than R80 000,00. There are ways of fighting this injustice, but they are complex and expensive.

If one of the partners is much wealthier and has considerably higher earning capacity than the other, he or she may not be prepared to agree to a contract giving an equal division of accrued assets. Pro-rata accrual sharing in that partner's favour - a ratio of 60:40 say, or even 75:25 - is sometimes seen as the solution.

Mendelow says unequal splits give unfair results.

Inaccurate valuation of assets is another common subject of expensive wrangling. Both partners detail their assets in the antenuptial contract and this is prima facie proof of their nett worth at the time of the marriage. Not giving the full value of every asset will mean losing if the marriage is dissolved. On the other hand, if one spouse exaggerates his or her nett worth, he or she effectively diminishes the other's share of the accrued estate. The problem is, an inaccurate statement of the value of an estate is very hard to prove 10 years later. Again, it is not uncommon for a man who sees his marriage going sour to prepare for the parting of the ways by quietly and systematically "losing" his assets over a period. This is difficult to prove if he covers his tracks. The court has a discretion to order the forfeiture of a claim in whole or in part to a share in the accrual if the circumstances warrant it. Either way, divorce litigation which revolves around disproving the claimed opening balances or unearthing hidden assets, is costly and complicated.

These messy situations are avoided if the assets of each partner at the time of marriage are excluded and administered as separate portfolios and they start from scratch to build a new joint estate. The potential for unfairness, however, is huge. Mendelow points out that if the husband's luxury home were excluded what he pays on bond instalments during the marriage, would be money that did not go into the mutual estate for the benefit of both. To compensate, there should be a clause in the contract to ensure that the wife would get an equal share of the bond reduction and of any capital gains on the house, that took place during the marriage.

Where a couple buying a house make very unequal contributions to the down payment, there should be a property partnership agreement in addition to the antenuptial contract.

Another instance where the wife can get a rough deal, is where the man owns a business that is excluded in the contract and all the assets he accumulates during the marriage are bought through the business. This would leave the marital kitty empty. The question arises to what extent he should be expected to draw money from the business to increase the common estate. On the other hand, if a successful business forms part of the joint estate, he runs the risk of having to hand over a dis-proportionately large part of his profits to his wife, if the marriage does not pan out.

One way out is to waive accrual and create a structure whereby the wife can increase her own estate. What works well is a provision in the contract that for every year of marriage he will give her a stipulated inflation-linked sum which will allow her to accumulate wealth in her own right. He also cedes an insurance policy on his life to her to ensure her financial security if he dies.

This is also a solution if the couple are already in middle-age. It is especially appropriate where a man, who has amassed and continues amassing a fortune, marries a woman whose contribution takes the form of support, caring and nurturing, rather than an income-generating ability and material goods. Or he may settle money or property on her upfront, with the proviso that the donation reverts to him if they part company within a stipulated number of years.

An antenuptial contract without accrual is generally not a good option for a young woman, especially if she intends having children.

When the bride and groom are financially on a par and have similar earning capacities, the drafting of an antenuptial contract is a straightforward matter that costs about R600,00.

When there are complicating factors and significant disparities between them, it is essential that the contract should be drawn by an Attorney who knows his matrimonial "oats" - a lot of people have been done out of their dues in divorce proceedings, simply because they economised on the antenuptial contract.

"The contract is an important component of estate planning and deserves careful thought and concern", Mendelow emphasises. "If the couple start off on a solidly-structured basis, and there is understanding between them and they keep up proper accounting over the years, there will be far less reason for disputes and scope for abuse. A good Attorney will put this in place. The whole purpose of antenuptial contract is to ensure fairness and avoid litigation".

Divorce litigation frequently arises out of a badly-drawn antenuptial contract. Mendelow cites as an example, the issue of damages received as compensation for injury.

"Damages received for pain and suffering are clearly excluded from accrual-sharing by the Matrimonial Property Act, but it is unclear on whether the same applies to damages for future medical expenses and future loss of earnings. The courts sometimes award sums for these that may run into millions of rands. When drafting an antenuptial contract, it should be stipulated that a claim of this nature is excluded", he says.

A divorce can be complicated by the fact that the couple were not married in South Africa. The courts apply the law of the country where they were married and sometimes expert evidence has to be led on what the law is. This could be extremely complicated, for instance, where the country in question is mainland China, which previously had no property ownership laws, or Yugoslavia, which no longer exists, if there is a substantial estate to be "carved up", this can lead to all sorts of complications, but most divorces involve people who are not wealthy and centre on maintenance issues, which typically involves the bulk of the patrimony. This leaves few assets to fight over and allows courts to find an equitable solution.

If a man dies without insurance cover, his estate may have to be carved up to pay claims against it. This could well mean having to sell the family home - one of the worst circumstances faced by a widow with children.

To protect herself against this, a woman should insist that her husband-to-be takes out a substantial life policy and nominates her as beneficiary, it may be advisable that this is enshrined in the antenuptial contract. This is particularly important if most of his capital is tied up in a business or property. This, together with bond protection insurance, will ensure that the family has a paid-up home and enough income to maintain their standard of living and cover education costs.

If a man has financial obligations towards children by a previous marriage, it would be wise to form a Trust, into which are paid the proceeds of a life policy taken out for this purpose. Maintenance is paid out of these funds until the children are of age and the remaining capital is either shared among them or reverts to the estate.

If a man refuses to take out a policy, the ex-wife can ensure her childrens' financial wellbeing by taking out a policy on his life herself and paying the premiums. A final option is to make the estate a beneficiary of the policy, so that there will be enough cash in it to cover all obligations.

Ewald Biesenbach, manager of the Wills Department of BOE Private Bank, warns that anyone who gets divorced should have his or her Will redrawn without delay. The law makes allowances for the fact that many people fail to do this. If somebody dies within three months of divorce, and the Will names the ex-spouse as the main beneficiary, this clause is automatically revoked.

The thinking behind this is that the deceased would have wanted to exclude the ex-spouse, but hadn't had time to change the Will. After three months, if the Will still has not been amended to exclude the ex-spouse, it becomes valid once again.

However, Biesenbach points out that if the person now dead had remarried, the Will deals only with his or her share of the joint estate, which may go to the ex-spouse if he or she is still named in the Will. The current spouse is by law the owner of one-half share of the estate if the couple were married in community of property, or entitled to half of the growth in the value of their joint assets if the marriage was subject to accrual.

If the Will refers only to "my spouse" this is taken to be the person to whom the deceased was married to at the time the Will was drawn. If someone dies intestate, his or her estate is shared between the current spouse and children. If there are no descendents (children or remoter descendents), the surviving spouse inherits the entire estate.

Creditors, however, have first claim on the estate. Only once these claims are satisfied, does the residue go to the heirs, such as the current wife and children. Another point to bear in mind is that unfulfilled promises don't go away. A benefit conferred in terms of an antenuptial contract, but which never actually materialises, could become a claim against the estate of the donor and the claimant would be entitled to payment before the legatees or heirs.

A last little point. An advantage second-timers have is the chance to gauge the disposition and personality of a future spouse from his or her conduct in a first marriage and divorce. If the date of the divorce is known, the case number can be obtained from the Registrar and this is all that is needed to get a copy of the relevant divorce settlement from the High Court.