Married with accrual – why it matters

How you are married has huge implications whilst you are alive and when you die.

In 1984, the matrimonial property regimes in SA were amended. Since then there have been three marriage regimes in South Africa.

1. A marriage without an antenuptial contract (ANC), which results in a marriage in community of property;
2. A marriage with an ANC that results in a marriage out of community of property with the inclusion of the accrual system; and
3. A marriage with an ANC that stipulates that the accrual system does not apply.

The term ‘accrual’ is used to describe the net increase in the value of a spouse’s estate since the date of marriage. The accrual system only becomes effective on divorce or death.

Certain assets are automatically excluded from the accrual calculation such as;
• asset excluded from the accrual system under the ANC.
• any inheritance, donation from a 3e party.

So why is knowledge and practicalities of your marital regime important? This will be best described by way of an example where the surviving spouse owes the deceased spouse, as a result of the accrual calculation. The deceased spouse then bequests all her assets to third parties through her will.

Example: The Surviving spouse John has assets including a business worth R10million and the deceased spouse Amy only had a vehicle of R500,000. Amy bequeaths her entire estate to her sister as per her will, which was supposed to be only her vehicle. However, due to the accrual system her estate also has a claim of (R10 million – R500,000)/2) R4,750,000 against her surviving husband. John will now have to either give Amy’s sister 50% of his assets including his business or raise capital of R4,750,000 to settle the accrual claim inherited by Amy’s sister.

This is a very elementary example, the fact, however, is most people don’t understand what the impact is of their estate structures, wills and marital regimes.

Please obtain expert advice on these matters to avoid costly and undesired implications for you and your family.

Jacques Hodsdon – MCom Tax | CA(SA) | CFP ® is a Director of Affluence Group and specialises in Investments, Personal and Business planning.
For enquiries contact, jacques@afgroup.co.za or phone 082 301 1332.