Many South Africans are married out of community of property with the accrual system. While this marital regime is designed to create fairness between spouses, it can have important consequences for estate planning that are often overlooked.

At AIM, we often see situations where individuals have carefully drafted Wills and estate plans, but have not fully considered how the accrual system may affect the administration of their estate when a marriage ends — either through divorce or death.

Understanding how accrual works can help prevent unexpected financial pressure and ensure that your estate planning operates as intended.

What is the accrual system?

If you are married out of community of property, the accrual system may apply unless it has been expressly excluded in your antenuptial contract (ANC).

In simple terms:

• Each spouse keeps their own assets and liabilities during the marriage.
• When the marriage ends (through divorce or death), the growth in each spouse’s estate during the marriage is compared.
• The spouse whose estate grew less may have a claim for half of the difference in growth.

The idea behind the system is to ensure that both spouses share in the wealth created during the marriage, even though their assets remain separate during the relationship.

How the accrual calculation works

While the calculation can become technical in practice, the underlying concept is relatively straightforward.

The process generally involves the following steps:

1. Commencement value
Each spouse’s estate value at the start of the marriage is recorded or declared.

2. Inflation adjustment
The commencement value is adjusted for inflation so that the starting value and the ending value can be compared fairly.

3. End value
Each spouse’s net estate is calculated at the end of the marriage (assets minus liabilities).

4. Accrual (growth)
The growth in each estate is calculated by subtracting the inflation-adjusted commencement value from the final net estate value.

5. The claim
The spouse with the smaller increase in estate value may claim half the difference between the two growth amounts.

A simple example

• Both spouses start the marriage with R0
• At the end of the marriage:
  • Spouse A has a net estate of R100,000
  • Spouse B has a net estate of R20,000

The difference in growth is R80,000.

The spouse with the smaller estate (Spouse B) may therefore have a claim of R40,000, which represents half the difference.

What assets can be excluded from accrual?

Certain assets may be excluded from the accrual calculation depending on how the ANC is drafted and how assets were received.

Common examples include:

• Assets that were specifically excluded in the ANC
• Assets that replace or originate from excluded assets
• Certain inheritances, donations, or legacies, unless stated otherwise

This is why proper drafting of an ANC and maintaining good records can be very important — not only in the event of divorce, but also as part of effective estate planning.

Why accrual can become complicated when someone dies

Many people associate the accrual system primarily with divorce. However, an accrual claim may also arise when one spouse passes away, which can create unexpected financial consequences.

Two common scenarios illustrate this.

Scenario 1: The spouse with the smaller estate dies first

If the spouse with the smaller accrual passes away first, their deceased estate may have an accrual claim against the surviving spouse.

This can create liquidity pressure for the surviving spouse if the estate needs to enforce that claim. In some cases, this may require the sale of assets or restructuring of finances at a time that is already emotionally difficult.

Scenario 2: The spouse with the larger estate dies first

If the spouse with the larger accrual dies first, the surviving spouse’s accrual claim may reduce the assets available to other heirs.

In certain cases, this may significantly change the outcome that the deceased intended in their Will.

For this reason, it is important that your Will and estate plan take your marital regime into account.

Be cautious with “waiver” clauses

Some estate plans attempt to manage accrual claims by including clauses in a Will that make an inheritance conditional on a spouse waiving their accrual claim.

While this approach can sometimes be appropriate, it must be handled carefully. Poorly drafted waiver structures can lead to unintended legal or tax consequences.

As a general rule, template clauses should be avoided, and any waiver structures should be reviewed professionally and aligned with the family’s actual financial position.

A simple checklist to prevent surprises

If you are married, or planning to marry, out of community of property, it may be helpful to consider the following:

• Review your antenuptial contract to confirm whether the accrual system applies.
• Ensure that commencement values were properly recorded and that supporting records are retained.
• Confirm that your Will and estate planning align with your marital regime.
• Revisit your estate planning after major life events such as business growth, inheritance, property purchases, or the birth of children.
• Seek professional advice before including accrual waiver provisions in your Will.

Taking the time to review these aspects can prevent significant complications later.

Where to from here

If you are married out of community of property with the accrual system, it may be worthwhile reviewing how your marital regime interacts with your Will and broader estate planning.

The team at AIM can assist you in reviewing your current position and ensuring that your planning is aligned with your family and financial circumstances.

A small review today can prevent significant financial surprises tomorrow.

Disclaimer

The information contained in this article is provided for general informational purposes only and does not constitute accounting, tax, audit, legal, financial, or other professional advice. While every effort has been made to ensure the accuracy of the information at the time of publication, laws, regulations, and interpretations may change, and the application of information may vary depending on individual circumstances.Readers should not act upon the information contained in this article without seeking appropriate professional advice specific to their situation. AIM accepts no responsibility for any loss or damage arising from reliance on information contained herein.