Where spouses marry out of community of property under an Antenuptial Contract that excludes community of property and community of profit and loss, the accrual system generally applies unless it is expressly excluded by the ANC.
The accrual system allows spouses to maintain separate estates during the marriage while creating a statutory mechanism for sharing in the difference between the growth of their estates when the marriage ends.
This means that accrual is not the same as having a joint estate. The spouses generally retain separate estates during the marriage, but the growth of those estates is taken into account when the marriage ends.
How the Accrual System Works
Under the accrual system, each spouse generally retains a separate estate during the marriage. There is no joint estate simply because the couple is married under accrual.
Each spouse generally manages their own assets and liabilities during the marriage, subject to the applicable law and the terms of the ANC. The separation of estates can provide protection against certain claims arising from the other spouse's debts, depending on the circumstances and applicable law.
When the marriage ends through divorce or death, the accrual of each spouse's estate is calculated. The spouse whose estate has the smaller accrual generally has a claim equal to half the difference between the two accruals. The calculation is not simply a division of everything the spouses own.
⚖️ Separate Estates ≠ No Sharing
Under the accrual system, spouses generally maintain separate estates during the marriage. The sharing mechanism arises when the marriage ends.
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Accrual calculated when the marriage ends
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Difference between accruals determined
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Spouse with the smaller accrual may have a claim for half the difference
A Simple Accrual Example
To understand how the calculation operates in practice, consider the following scenario:
Illustrative Example Only
Assume, after taking the applicable commencement values and exclusions into account:
- Spouse A's accrual = R1,000,000
- Spouse B's accrual = R400,000
Difference: R1,000,000 − R400,000 = R600,000
Half of the difference: R600,000 ÷ 2 = R300,000
Subject to the applicable legal calculations, Spouse B would generally have an accrual claim of R300,000 against Spouse A's estate.
This does not mean that Spouse A transfers half of every individual asset to Spouse B. The accrual claim is a monetary claim calculated according to the applicable legal rules.
The "Commencement Value"
The commencement value is the net value of a spouse's estate at the beginning of the marriage. It provides an important starting point when the accrual of the estate is calculated.
The applicable law makes provision for the commencement value to be adjusted for changes in the value of money. The Matrimonial Property Act provides for this adjustment and the Consumer Price Index (CPI) is relevant to that calculation.
Accurate information about the starting estate is therefore important when preparing an ANC and considering the future accrual calculation.
Why Does the Commencement Value Matter?
The purpose of recording a commencement value is to distinguish the estate a spouse brought into the marriage from the growth that occurs during the marriage. If the commencement value is not properly recorded or supported, questions can arise later when the accrual needs to be calculated. Your Notary can explain what information is required and how commencement values are dealt with in your ANC.
Statutory Exclusions & Custom Terms
Certain assets or amounts may be excluded from the accrual calculation under South African law, subject to the applicable legal requirements and the terms of the ANC:
- Inheritances, legacies and donations: These are generally excluded from the accrual calculation, subject to applicable law and any relevant terms or conditions.
- Non-patrimonial damages: Certain amounts received as compensation for non-patrimonial loss (such as damages for pain and suffering) are generally treated separately when calculating accrual, subject to the applicable legal rules.
- Assets excluded by the ANC: An ANC can contain provisions dealing with specific assets or interests. Whether an asset should be excluded, and how that exclusion should be structured, depends on the circumstances and the instructions given to the Notary.
What Is Actually Shared?
The accrual system does not mean that every asset owned by either spouse is automatically divided equally. The calculation focuses on the growth in each spouse's estate, taking into account the applicable commencement values and exclusions. The result is generally a monetary accrual claim rather than an automatic transfer of ownership of particular assets.
📌 Business, Property & Other Significant Assets
If you own a business, shares in a company, investment property, a family business or other significant assets, it is important to consider how those interests will be treated under the accrual system. Depending on your circumstances and objectives, particular assets or interests may need to be addressed specifically in the ANC. This is something you should discuss with the Notary when the ANC is prepared.
For example, if one spouse owns a business before the marriage and that business grows substantially during the marriage, the way that interest is treated can become important when the accrual is calculated. The correct treatment depends on the nature of the interest, the commencement value, applicable exclusions and the terms of the ANC.
Accrual is NOT Community of Property
- Community of Property generally involves one joint estate.
- Accrual generally involves separate estates during the marriage.
- Under accrual, a sharing mechanism applies to the difference in estate growth when the marriage ends.
Is Accrual Right for Every Couple?
No. There is no universally correct matrimonial property regime.
Accrual may suit couples who want separate estates during the marriage while still allowing for a mechanism that recognises differences in estate growth when the marriage ends. Other couples may prefer a different arrangement depending on their financial circumstances, business interests, existing assets, future plans and personal objectives.
The important question is not simply whether accrual is widely used. The important question is whether you understand how it will operate in your specific circumstances.
Understand Your Accrual Before You Say "I Do"
Understanding your commencement value, exclusions and the treatment of important assets can help you make an informed decision about your matrimonial property regime.
This information is provided for general educational purposes and does not constitute legal advice. The application of the accrual system depends on the circumstances of the spouses, the applicable law and the terms of the Antenuptial Contract.