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How Your ANC Impacts Your Estate Planning

When you plan your estate, one of the most significant factors influencing how your assets are distributed is your marital regime. If you’re married with an Antenuptial Agreement (ANC), whether with or without the accrual system, this contract directly impacts your estate planning and inheritance outcomes. Understanding how your ANC affects your estate is crucial for ensuring your wishes are carried out effectively.

At Engelsman Magabane Incorporated, we provide comprehensive legal advice on both ANCs and estate planning, helping clients align their financial arrangements with their personal goals. This blog post explores how your ANC shapes the structure of your estate, affects inheritance, and influences the financial security of your loved ones after your passing.


What is Estate Planning?

Estate planning is the process of managing and organizing your assets during your lifetime and deciding how they will be distributed upon your death. It involves drafting a will, setting up trusts, determining how taxes and debts will be handled, and designating beneficiaries for various assets. If you are married or planning to marry, your marital property regime—whether it’s community of property or ANC—is a key component that must be considered when developing your estate plan.


How Does an ANC Affect Estate Planning?

An Antenuptial Agreement (ANC) determines whether your assets are separate from or shared with your spouse. This distinction influences how your estate is structured and what portion of your assets is protected or subject to claims when you pass away. There are two main types of ANCs in South Africa:

  • ANC with Accrual: This option allows each spouse to retain their own assets acquired before the marriage, while sharing the increase (or “accrual”) in value of their estates during the marriage.
  • ANC without Accrual: In this option, each spouse’s assets and liabilities remain completely separate before, during, and after the marriage, meaning there is no sharing of growth in assets.

The Impact of ANC on Estate Assets

  1. ANC Without Accrual
    If you are married out of community of property with an ANC that excludes the accrual system, your estate remains entirely separate from your spouse’s. This means that:
    • Upon your death, only the assets registered in your name will form part of your estate. Your spouse will not automatically have a claim on your estate unless provided for in your will.
    • You have full control over how your assets are distributed, allowing you to bequeath property to anyone you choose without any legal obligation to leave a portion to your spouse.
    • Your spouse is protected from any liabilities or debts you may leave behind, ensuring that creditors cannot claim from your spouse’s estate to settle your debts.
    Estate Planning Tip: Couples married with an ANC without accrual should ensure their wills clearly reflect their intentions, as this regime provides no automatic sharing of assets. It’s essential to update your will regularly, especially after significant life events, to avoid disputes or unintended consequences.
  2. ANC With Accrual
    An ANC with accrual allows for more flexibility and fairness, as it accounts for the growth of both spouses’ estates during the marriage. At the time of your death or divorce, the spouse whose estate has grown less is entitled to claim from the spouse with the greater accrual. Here’s how it affects estate planning:
    • Pre-marital Assets: Assets you acquired before the marriage remain part of your individual estate and are not subject to division, unless explicitly included in the accrual agreement.
    • Accrued Assets: Only the increase in the value of your estate during the marriage is shared with your spouse upon your death. This ensures a balanced distribution of wealth accumulated while married.
    • Claims on the Estate: If your estate grows more significantly than your spouse’s during the marriage, they will be entitled to an accrual claim. This may reduce the portion of your estate available to other heirs, such as children from previous marriages or extended family.
    Estate Planning Tip: Couples married with an accrual ANC should work with legal professionals to calculate potential accrual claims and factor these into their estate plan. You may also want to include specific clauses in your will to account for the accrual calculation and how it will impact other beneficiaries.

The Role of Inheritance in an ANC

One critical question for many couples is how inheritances are treated when married with an ANC. In South Africa, inheritances received during the marriage are typically excluded from the accrual calculation, unless the couple explicitly states otherwise in the ANC or another legal agreement. This means that:

  • ANC with Accrual: If you inherit assets during the marriage, they generally remain separate from the shared accrual estate, unless you specify that they should be included in the joint estate.
  • ANC without Accrual: Inheritances remain part of your individual estate and are not shared with your spouse, maintaining complete separation between personal and marital assets.

Estate Planning Tip: Ensure that your will and ANC are clear on the treatment of inheritances. You may want to specify how any inherited assets will be passed down to your beneficiaries, especially if you wish to exclude your spouse from claims on these assets.


Tax Implications of an ANC in Estate Planning

Your marital regime also affects how estate taxes and capital gains taxes are calculated upon your death. When planning your estate, it’s crucial to account for these potential tax liabilities:

  • ANC without Accrual: Only your personal estate will be taxed. Since your spouse is not entitled to any portion of your estate (unless stipulated in your will), the estate duty will apply only to the value of your assets.
  • ANC with Accrual: Since your spouse may have a claim to a portion of your estate (the accrued portion), the estate tax may be calculated differently. The value of the accrual claim can reduce the taxable amount of your estate, as it will reduce the portion of assets subject to estate duty.

Estate Planning Tip: Work with an experienced attorney or financial planner to calculate potential tax liabilities and ensure your estate plan accounts for them. Proper tax planning can help protect your loved ones from significant financial burdens.


Planning for Dependents and Blended Families

For couples with children from previous relationships or those who support dependents, estate planning becomes more complex under an ANC. Whether or not the accrual system applies, it’s crucial to ensure that all beneficiaries are adequately provided for:

  • ANC without Accrual: Since there is no sharing of assets, you can allocate specific assets to your children or other dependents without needing to consider your spouse’s claim to your estate.
  • ANC with Accrual: Depending on the growth of your estate and your spouse’s claim, the available assets for children or dependents may be reduced by the accrual calculation. You may need to make special provisions in your will to ensure your children receive a fair portion.

Estate Planning Tip: Consider setting up a trust to manage and protect assets for your children or dependents. Trusts can be especially beneficial in blended families where you want to ensure your children receive an inheritance, while still providing for your spouse.


Consult with Engelsman Magabane Incorporated for Tailored Estate Planning

Finalizing your Antenuptial Agreement and estate plan requires careful consideration of your assets, marital regime, and future financial goals. At Engelsman Magabane Incorporated, we specialize in helping couples navigate the complexities of ANCs, estate planning, and inheritance law. Our expert attorneys will work with you to develop a tailored estate plan that ensures your assets are protected and distributed according to your wishes.

If you need assistance with drafting or revising your will, finalizing an ANC, or understanding how your marital regime affects your estate, contact us at https://engelsman.co.za/contact-us/ today.


Conclusion: Aligning Your ANC and Estate Plan for a Secure Future

Your Antenuptial Agreement has a significant impact on your estate planning and inheritance. Whether you choose to marry with or without the accrual system, it’s essential to align your ANC with your overall estate plan to ensure that your assets are managed and distributed according to your wishes.

By working with experienced legal professionals at Engelsman Magabane Incorporated, you can protect your financial legacy and provide for your loved ones in the most effective way. Contact us today to secure your estate and create a clear plan for the future.


This article is provided by Engelsman Magabane Incorporated, your trusted family law and estate planning firm in Kimberley, Northern Cape. We are committed to helping clients navigate the legal complexities of marriage and estate management with ease and confidence.

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