The joys of matri-money — untangle financial choices before tying the knot

Question

My partner and I are getting married in December and need to decide whether we are doing it in community of property or with an antenuptial contract. Then there is something called with or without accrual. How do we decide?

Answer

There are three ways to structure the money side of marriage. Each has its pros and cons and choosing the right regime for your personal circumstances is a big decision.

Briefly, if you do nothing before the wedding, you land in community of property by default: one big joint pot, assets and debts included. If you sign an antenuptial contract without accrual, your estates stay separate – during the marriage and at the end. If you sign an antenuptial contract with accrual, you keep things separate while married, but share the growth fairly when the marriage ends (through divorce or death).

In community of property

On your wedding day, your estates merge into a joint estate. It’s simple to enter and it can feel wonderfully transparent.

But there’s a flip side. Debts also land in that pot. If your partner runs a business, signs surety or has a history of impulsive borrowing, you are exposed.

Major transactions require spousal consent, which is a safeguard when both are prudent and a handbrake when one isn’t. And if one spouse brings substantial assets into the marriage, ring-fencing later is hard and expensive.

This works well for couples with similar asset bases and financial habits, low business risk and a preference for simplicity.

Antenuptial contract without accrual

With an antenuptial contract that excludes accrual, what’s mine is mine and what’s yours is yours. Your spouse’s creditors can’t reach your assets, and the admin on exit is usually cleaner because there’s no sharing calculation. For entrepreneurs, professionals with potential liability or second marriages where adult children are in the picture, this regime can be a godsend.

The caution is fairness. Careers can zig and zag. Someone may pause work to study or raise children; another might pour energy into a business that skyrockets. Without accrual, that joint effort doesn’t translate automatically into a share of growth.

If you go this route, plan to protect the economically weaker spouse: save in both names, structure your wills generously, set up life and disability cover that actually pays the bills, and consider contractual clauses that compensate for career sacrifices.

Antenuptial contract with accrual

During the marriage, you each keep your own estate and enjoy creditor protection; at the end, you compare how much each estate grew and equalise half the difference.

Premarital assets can be declared as starting values, and inheritances or donations received during the marriage are usually excluded unless you opt in.

The admin is the real work: keep records. List and value what you had before the wedding, attach schedules to the antenuptial contract and file the proof.

How I help couples decide

If either of you runs a business, signs surety or faces professional liability, I prefer an antenuptial contract, usually with accrual for fairness. Add big wealth mismatches? Still accrual, but declare starting values so premarital assets are protected. This is usually the best option for first marriages.

Second marriages with blended families often warrant without accrual, paired with careful wills and beneficiary nominations, to look after both spouse and children. This is also best if there is a high liability risk.

If both are salaried with similar assets, low debt and a love for one-pot simplicity, in community can be perfectly sensible – just be brutally honest about spending habits and debt.

Whichever route you choose, make it conscious. Sign before the wedding. Keep records. Align the regime with a proper will and beneficiary nominations, as well as the right insurance. DM

Kenny Meiring is an independent financial adviser. Contact him on 082 856 0348 or at financialwellnesscoach.co.za. Send your questions to kenny.meiring@sfpwealth.co.za

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.