29 April 2022

Why you gotta be accrual 'bout it?

Submitted by SchoemanLaw Inc

What Does It Mean To Get Married Out Of Community Of Property?

Getting married out of community of property is as saying what is yours is yours and what is mine is mine. When you enter into the marriage regime of being married out of community of property, you need to enter into an Antenuptial Contract (ANC) prior the date of your marriage. This contract will regulate the terms and conditions of community of property between spouses. Each spouse has the freedom to deal with their property as they deem fit.

What Is Accrual?

Accrual simply means the net value of one spouse or the parties’ estate since the date of marriage. Simply put, what is yours before the marriage remains yours and what you and your partner have earned during the marriage belongs to both of you. The right to share accrual only comes into effect upon the dissolution of the marriage. The system of accrual is a formula that is used to calculate how much each spouse with the larger estate must pay the spouse with the smaller estate, if the marriage comes to an end through death or divorce. Only property acquired during the substance of the marriage can be considered when calculating the accrual.

Each spouse is entitled to take out the asset value that he or she brought into the marriage, they will share what they have built up together during the marriage. If the accrual system is included, a spouse upon death or divorce will be entitled to share in the growth of the two estates.

The following assets does not form part of the calculation in the net value of the estate:

Assets explicitly excluded from the accrual system under the ANC;Assets acquired by a spouse or party prior the marriage;An inheritance, legacy or and or donations to one spouse during the marriage. The condition therefor is thus, if spouses agree to share in the inheritance, legacy, and or donations in their ANC, this should have been left to both spouses jointly;Donations between spouses is not considered in their estate. Any donation between the spouses is not considered in either estate.

How Does One Determine Accrual?

It’s as easy as 1;2;3.

Draft a list of all the assets, namely immovable property, furniture, vehicles, pension interest, annuities, policies, investments, bank accounts, loan accounts just to name a few, obtained during the marriage at the present-day values. Once your list has been completed, deduct all the assets that were excluded in the ANC, as well as acquired assets then, deduct the inheritance, donations, and or legacies, any debt and liabilities as well as the commencement value, as stated in the ANC and adjusted by the Consumer Price Index (CPI).

Your accrual in the estate will be the net result. The spouses must declare their initial value in their ANC or in a separate document within 6 (six) months after their marriage. Failure to do so will declare their estate value nil. The contract needs to be signed by both parties and a notary public will authenticate this by allocating a protocol number and submitting this document plus a copy to the deeds office in which the parties reside.

Conclusion

Upon dissolution of the marriage by divorce or death, the party whose estate shows the most growth has to share half of their accrual to the party whose accrual has shown a lesser growth.

Contact an attorney at SchoemanLaw for your legal needs by visiting our website at www.schoemanlaw.co.za.

SchoemanLaw Inc

SchoemanLaw Inc Attorneys, Conveyancers and Notaries Public is a boutique law firm offering its clients access to high quality online legal documents and agreements, together with a wide range of legal services. The firm has an innovative and entrepreneurial mindset that distinguishes it from other law firms. We apply our first-hand understanding of the challenges facing entrepreneurs (regardless of their business size) to develop proven, practical solutions incorporating legal compliance, risk aversion and business sense. We achieve this by offering clients tailored, yet holistic support comprising of legal gap analysis, the design of tailored legal solutions and the practical implementation thereof through training and automation. With your personal interests in mind, our ultimate aim is to implement measures that protect the results of your hard work as effectively as possible.