Accrual - What Does it Mean?

South African law allows for three different marital regimes. These are:

1. In community of property;

2. Out of community of property with the accrual;

3. Out of community of property (without the accrual);

By default parties are married in community of property. You need to register an antenuptial agreement if you want to be married out of community of property (either with or without the accrual). For more information on what this is and how to get one, Contact Us).

This resource focuses on the second of the aforementioned (out of community with accrual). A topic that is often misunderstood or incorrectly interpreted.

A marriage out of community of property is simple. The assets each party has before the marriage remains in their respective estate during and after the marriage. "What's yours is yours and what's mine is mine". The accrual system can be added which changes things a bit.

Accrual means the growth or increase of an estate. This growth is calculated by the difference between the value of your estate on date of marriage versus the value at dissolution of the marriage (whether by divorce or death, it doesn't matter). This calculation is done for each party and the one that shows the highest accrual must give half of the difference thereof to the other party. Ideally both parties should start with R0 on date of marriage (if you have assets before date of marriage, these can be excluded in the antenuptial agreement).

For example:

The difference between their accrual in the estates is R16,000 (R20,000 – R4,000).

Half thereof is R8,000 (R16,000 ÷ 2).

The end result is that A, who has the higher accrual, gives B R8,000. Meaning at the end of the calculation A’s estate is R12,000 (R20,000 – R8,000) and B’s estate is also R12,000 (R4,000 + R8,000). You can change the values in this example however you want and will always end up with each party having the exact same value.

For further clarity, here’s a picture of what this looks like:

What the accrual does not mean:

• It does not mean that the parties are “out of community” during the marriage and “in community” at the dissolution of the marriage. The calculations may add up, but it’s not always the case.

• It does not mean that each party gets half of the other party’s estate at the dissolution of the marriage. Such a calculation would not be the same as meant in legislation.

Important last notes:

It is extremely important to do proper estate planning to avoid detrimental consequences that the accrual system may enforce on the party with the higher accrual.

Similarly it cannot be understated how important a properly drafted antenuptial agreement is and to do it before you get married.

This resource is just a brief overview of the accrual system and does not cover all the subtopics and nuances related thereto. We encourage you to contact us if you have any questions or for full legal advice.