Article: Jeni Halliday from Ideas
Image: Ablestock

When you eventually decide to get married, the appropriate marriage contract is vital because it can impact significantly on your financial wellbeing. In a sense, marriage can be seen as entering into a business venture with assets and liabilities in which each partner has a role. This is of particular concern in the case of a second marriage where the partners have previously acquired assets and there are children involved. There are three options for you to consider:

1. Antenuptial contract with accrual
In choosing this type of union, you will need to have a legal contract drawn up and sign it before an attorney (public notary). You will each be required to provide a list of your assets, liabilities and debts prior to getting married. These do not become common property. All the assets or wealth you acquire as a married couple will form part of the accrual, which you are entitled to share on dissolution of the marriage. You also have complete control over your own assets during the marriage and can conclude any transactions without your partner's consent.

2. Antenuptial contract without accrual
This is a legal contract in which you do not choose the accrual option. It must also be drawn up by and signed before a notary. On dissolution of the marriage through divorce, you have no claim to your spouse's estate. And if your spouse dies, you are not automatically entitled to a share of his estate. He may bequeath all or part of the estate to you in his will, but he is not bound to. However, if he disinherits you, you can claim reasonable maintenance in terms of the Maintenance of Surviving Spouses Act.

3. In community of property
This means that what is yours is his, and what is his is yours. It does not matter which partner brings assets into the marriage because from the date of the marriage both partners will automatically become equal owners of these assets. This includes all debts and liabilities as well. You will need your spouse's written permission if you want to undertake a transaction of your own assets, for example selling a property that you own. In the event of a spouse's death the entire estate is frozen for a while, including all bank accounts even though they may be in your name.

If either you or your husband were to start a business which then fails, resulting in bankruptcy, the other partner will also be held liable for all debts. Should you get married without drawing up and registering an antenuptial contract, it will be regarded as marrying in community of property.

Investments and savings
Determine and prioritise goals such as buying your own home, an overseas holiday, and the education of your children or future children. Set aside money each month to invest towards these goals. Make saving a habit.

Life and disability insurance
One of the basic investments a couple needs is life cover to ensure that the surviving partner and children are taken care of financially. Disability insurance will provide an income if you become disabled.

Retirement planning
The cumulative effect of compound interest means that the sooner you start investing for your retirement, the less expensive this exercise will be in the long term. You should be saving approximately 10% of your gross income on a monthly basis, specifically for your retirement. Most retirement plans have tax benefits so keep that in mind when choosing an option for your retirement.

Medical scheme
The cost of medical scheme contributions is increasing faster than inflation. At retirement, most companies also no longer pay your contributions, so you will have to fund them yourself. This means making provision now for your future medical expenses.

Wills
A will is often overlooked. Dying intestate (without a will) causes endless administrative problems, which result in delays and can be financially disastrous for the surviving spouse and children.

There is improved legislation in the pipeline regarding couples. Currently however, even if you have lived with a person for the better part of your life, you will not be entitled to inherit in terms of the existing Intestate Succession Act should they pass away without leaving a will. You will also not be able to claim in terms of the Maintenance of Surviving Spouses Act. Although the new laws are expected to remove these anomalies, it is essential that you both have a will.

If you have obligations from a previous marriage that are enforceable against your estate, such as maintenance or other financial commitments, also bear in mind that you will need to make provision for these and set them out in your will.

Consider setting up a testamentary trust for your children. If you die this will ensure that the capital that you have earmarked for them will be used exclusively and effectively for their benefit. It will also ensure that the money will be administered by someone of your choosing, and a person you can trust.

These may sound like serious, boring topics to discuss at a time when you are happy and in love but if you cover these things early on then the next step of your relationship is bound to start off on a good footing.