When a couple is married out of community of property with the inclusion of the accrual system, the spouses have their own estates consisting of assets (property) and liabilities (debts). Each spouse is separately liable to pay his/her creditors and the accrual system will apply.
Click here to read more about the 3 Matrimonial Property Systems available in South Africa.
What is the accrual system?
The accrual system is a formula/calculation that is used to determine how much the party whose estate with a bigger accrual/growth during the marriage will have to pay to the party whose estate showed a smaller accrual/growth.
How to calculate the accrual?
The recommended steps to determine the accrual in one spouse’s estate, are as follows:
1. DETERMINE THE VALUE OF THE ASSETS:
Draft a list of all the assets. Assets include immovable property, motor vehicles, pension interest, annuities, policies, investments, funds in bank accounts, loan accounts in businesses, etc.
2. DEDUCT THE FOLLOWING FROM THE TOTAL VALUE OF THE ASSETS:
- The commencement value as stated in the antenuptial contract (adjusted to be in line with the weighted average of the Consumer Price Index),
- The value of the assets that are excluded in the antenuptial contract,
- The value of any donation, legacy or inheritance,
- The value of the assets acquired by virtue of the possession or former possession of the excluded assets, donations, legacy or inheritance,
- Any other amount received for a non-patrimonial loss, and
- The value of all liabilities (debts).
Click here if you need assistance with an Antenuptial Contract.
How to calculate the accrual CLAIM?
The above calculation must be used to determine the accrual of each spouse’s estate (separately). The spouse whose estate accrued by the smaller amount will have an accrual claim against the other spouse’s estate upon divorce for half of the difference in accrual.
Simple Example: John and Sarah want to get a divorce. The accrual of John’s estate is R200,000. The accrual of Sarah’s estate is R300,000. In this example Sarah’s estate showed a bigger growth/accrual. The difference in accrual is R100,000. Upon divorce John will be entitled to half of the difference in accrual. The value of John’s accrual claim will therefore be R50,000.
May my spouse and I decide to divide our assets upon divorce without focusing on the accrual?
Yes. The parties can choose to discard the arrangements in the Antenuptial contract and reach a different agreement with regards to the division of assets and debt. In an uncontested divorce, the divorce papers (settlement agreement or consent paper) will record the agreement reached between the spouses and it will be incorporated into the final decree of divorce.
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