Out of Community of Property, with Accrual
Even though this model is also based on the exclusion of a communal estate, as well as any profit or loss, there is system of sharing, which transpires upon the dissolution of the marriage by death or divorce. Parties who do not have substantial estates and who are in the process of building u their individual estates, choose this model.
How does the accrual work?
“Accural” means sharing. It is very important to note that the accrual only transpires once the marriage is dissolved by death or divorce. On termination of the marriage, both the estate values are determined separately, and the larger estate must transfer half the net difference to the smaller estate.
- A starting value is determined for each party’s estate upon the date the contract is signed. This is the value of everything owned by the individual parties before marriage which they wish to exclude from their final estates.
- There are 2 separate estates throughout the marriage and neither party is liable for the other party’s debts incurred. The accrual approach will not lead to both parties being disadvantaged if one of the party’s is sequestrated.
- Accrual is the growth of the 2 estates during the marriage. The accrual of each estate will be calculated on the date of dissolution of the marriage. The starting values will be subtracted from the final values of the 2 separate estates in order to calculate to accrual of the 2 estates.
- The estate that shows the least growth, is entitled to half of the difference in growth between the 2 estates. If one party’s estate grew more during the marriage, the other party is compensated at the dissolution of the marriage.
- The marital regime is the closest to ‘in community of property’ as can get as the parties share in the accrual but it is also ‘out of community of property’ as they enjoy the protection in the case of the other party’s sequestration.
|Miss X estate before marriage:||Mr X estate before marriage:|
|Car: R200 000||House: R600 000|
|– Bond value of R150 000||– Bond value of R400 000|
|=R50 000||=R200 000|
Assume the above-mentioned values are excluded from the prospective marriage.
It is important to note that nothing is required to be excluded from the prospective marriage, the parties may start their marriage with a R0.00 value, everything they own will then form part of their accrual.
After date of Marriage:
- Assume the accrual of Mr X’s estate as at date of the dissolution of the marriage is R500 000 (total growth throughout the marriage) and the accrual of Mrs X’s estate as at date of dissolution of the marriage is R300 000 (total growth throughout the marriage). The total accrual is R800 000.
- The difference between Mr X’s and Mrs X’s accrual is R500 000 – R300 000 = R200 000
- The difference of R200 000 will be divided in half. As Mrs X’s accrual has shown a smaller growth, she will have an accrual claim of R100 000 against Mr X’s estate. Thus the total accrual (R800 000) gets divided in half and each party will be entitled to R400 000.
Mr and Mrs X will be entitled to the following respectively:
|Mr X||11/2 accrual||PLUS||Staring value of his estate|
|Mr X||1/2 accrual||PLUS||Starting value of his estate|
|R400 000||PLUS||R200 000 (before marriage)|
|= R600 000|
|Mrs X||1/2 accrual||PLUS||Starting value of his estate|
|R400 000||PLUS||R50 000 (before marriage)|
|= R450 000|