While no-one goes into marriage believing that they will get divorced, you can’t commit to a lifelong partnership without having an exit clause, or what the legal fraternity call a marriage contract. It may seem strange planning your divorce before you have even spent a night in the marital bed, but that’s just another quirk of life, and we have to work with it.
When you get married you are basically making a legal commitment to be with your partner for ever, and if you break that commitment it’s going to cost you . Usually, the more acrimonious the split up is, the more money the lawyers make. So laying the foundation of a fair and equitable divorce settlement is as important, as making the original commitment.
I was 24 when I got married. I really didn’t give much thought to a contract; neither did my husband to be. He had just finished his degree and was not earning much so there were no assets to speak of on his side. So we got married in Community of property. Little did I know that ten years down the road this oversight would cost me a fortune. My husband and I were not getting on very well, mainly because his spending was out of control and he was racking up debt like he would never have to pay for it.
He had a host of small business ventures that he was pursuing and I was footing the bill for the most part. His latest project was to buy into a small game farm. I owned a house that I inherited from my grandmother, it was bond free when I inherited it, by my husbands activities forced me to bond it to the tune of R300,000. One day my phone rang, it was the bank confirming a request for another R100,000 increase on the bond. I told them that I had not applied for this and they then told me that my husband had requested it. It was that phone call that made me realize that he would not change. I climbed into a hot bath and waited for him to come home.
All of a sudden his smile that I loved became a smirk, and his sticky out ears were not that cute after all. When he arrived home he perched himself on the edge of the bath without a care in the world. But that was about to change. I took a sip of wine and delivered my message, it was clear and calm, ‘I want a divorce’. He blinked, straightened his shoulders and replied ‘does this mean I can’t get the game farm then’? At that point I knew that I had made the right decision. When I met with the divorce lawyer I felt that I had just been sucker punched, in a nutshell, he told me that half my assets were his.
If there is one thing that I have learned over the years is to read and understand everything I have to sign, even if it’s a delivery note from a furniture store. If you are making a decision that will affect the rest of your life you HAVE to read the latin bits, even if they fuzz your brain. Perhaps if Angela had read about the long tem consequences of a COP marriage she would have thought twice. A marriage contract is an extremely important document; it can mean the difference between a Porsche and a Polo if you have to get divorced.
Don’t blindly sign any old contract, think about the unthinkable and figure out now what you want to happen in the event of the marriage’s demise, even if you think you have the catch of the century, Prince Charles cheated on Lady Di for goodness sake!. Amidst the excitement and emotion of a wedding, we forget that marriage is a legal contract similar to a will. While a will lists what happens to your money when you die, a marriage contract says what happens if the marriage dies.
The Different Types of Marriage Contracts:
Community Of Property
If you do not specifically seek out a lawyer to draw up a contract you will be automatically married in community of property. That means all the cash and property that each of you own is now jointly owned. This is not a desirable position to be in, especially if your spouse is a business owner. If he or she goes insolvent the creditors can take your things too. If you get divorced your possessions and wealth is spilt down the middle regardless of who brought what into the partnership. So this is not a good option unless you are marrying a shipping magnate, or an heiress and they are stupid, or love struck enough to go along with it.
The other option is the ante-nuptial contract (ANC ). A lawyer will have to draw this up and there is a cost involved. With the straight ANC if there is a divorce each party leaves with what they entered the marriage with and what they have accumulated in their personal capacity during the marriage. In other words their assets remain pretty much separate. This is a good option in second marriages if each of the parties have children. Many women balk at this kind of arrangement because they feel they may be compromised because they can not earn as much as their husbands and time may be taken to out from a career to raise children. This is really short sighted, and a tad self depreciating, who’s to say that she is not going to be the next media mogul or the CEO of a multi national? Ladies, You can still build assets in your name and protect them in a trust if you wish. If you are fast tracking it up the corporate ladder or your business is raking in cash don’t give it away. Guys its fine to go this route but you also have to remember that she may be raising your children so it is only fair that some assets are put into her name.
Ante-nuptial with Accrual
The third option in an Accrual ANC. Everything each of you owns is kept separate, but depending on how the contract is written up, if you get divorced, one of you may have to share some assets with your partner. In other words assets built up while married have to be shared according to the agreement. Sometimes percentages are stated, for example one partner may have more earning capacity at the time so they would get the lions share of the assets. However it is not cast in stone that one party will earn more than the other. So think carefully before you agree to a lesser share.
You can not easily change to an ante-nuptial contract after you are married in COP unless you can prove that there was some kind of negligence or there was a legitimate mistake on the documentation. So consider what kind of marriage agreement you want before you get married. If you feel totally compelled to change your marriage status you can make an application to do so but it will cost you quite a lot.
Did you think about this before you got married? If you didn't, would you have done anything differently?