When the accrual is included in an ANC, a spouse will be entitled to share in the growth of the two estates on divorce. This is often considered the most ideal way to marry.
The term ‘accrual’ is used to denote the net increase in value of a spouse’s estate since the date of marriage. In other words, what was yours before the marriage remains yours, and what you have earned during the marriage belongs to both of you.
Because the right to share in accrual is exercisable only upon dissolution of the marriage, such a right is not transferable and cannot be attached by creditors during the subsistence of the marriage.
The following assets are not taken into account when determining the accrual (are not included in the net value of the estate):
- Any asset excluded from the accrual system under the ANC, as well as any other asset that the spouse acquired by virtue of his/her possession or former possession of such asset.
- Any inheritance, legacy, trust or donation received by a spouse during the marriage from any third party, as well as any other asset that the spouse has acquired by virtue of his/her possession or former possession of the inheritance, legacy, trust or donation, unless the spouses have agreed otherwise in their ANC or the testator/trix or donor has stipulated otherwise.
- Any donation between the spouses.
- Any amount that accrued to a spouse by way of damages (e.g. slander), other than damages for patrimonial loss or the proceeds of an insurance policy in respect of a dread disease.
The following method can be used to determine the each estate’s accrual:
- Draft a list of all the assets, such as immovable property, furniture, vehicles, pension interest, annuities, policies, investments, bank accounts and interests such as shares and loan accounts in companies/partnerships/trusts or any other form of business, etc. obtained during the marriage at the present day values.
- Deduct the assets that were excluded in the ANC, as well as any other assets acquired by virtue of the possession, or former possession, of the excluded assets.
- Deduct inheritances, legacies or donations, as well as any other asset acquired by virtue of the possession, or former possession, of the inheritances, legacies or donations.
- Deduct any debts and liabilities.
- Deduct the commencement value, as stated in the ANC and adjusted by CPI.
- The net result will be the accrual in the estate.
Advantages of marriage out of community of property with the accrual
- The spouses share the increase in their assets accumulated during the marriage and the economically weaker spouse benefits.
- The spouses do not share their assets acquired before their marriage (but only if excluded in the ANC or included in the commencement values of the parties’ estates). The accrual system appeals to people who are already wealthy at the time of marriage.
- During the course of the marriage, each spouse manages his/her estate at will. There is no complex joint or equal administration.
- The spouses are not liable for each other’s debts. All that they share is their net assets. Thus, if one spouse becomes insolvent, the other spouse is protected against creditors.
Disadvantages of marriage out of community of property with the accrual
- The economically stronger spouse has to share the profits that he/she made during the marriage.
- One has to enter into an ANC in order for the accrual system to apply.
- The calculation of accrual at the end of the marriage can be a bit complex.
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Author – Jessica Gooding