The Accrual System: Balancing Independence and Fairness

The accrual system

If you choose to marry Out of Community of Property in South Africa, the Accrual System is your legal default. Governed by the Matrimonial Property Act 88 of 1984, this system is often described as a "deferred community of property." It allows you to maintain separate financial identities during your marriage while ensuring a fair distribution of wealth if the marriage ends through death or divorce.At Louwrens Koen Attorneys, we help you navigate the nuances of Sections 4, 5, and 8 of the Act to ensure your contract reflects your unique financial reality.

How the Accrual System Works

In an accrual marriage, there is no "joint estate." You each own your own assets and are responsible for your own debts. However, the law recognises that marriage is a partnership. Therefore, any wealth accumulated during the marriage is shared when the partnership dissolves.

The Basic Formula:

The "accrual" is the growth of a spouse's estate from the date of marriage to the date of dissolution.

1. Commencement Value: The net value of your assets at the start (declared in your ANC).
2. End Value: The net value of your assets when the marriage ends.
3. Calculation: The spouse whose estate shows the smaller growth (accrual) has a legal claim against the spouse whose estate showed the larger growth for half of the difference.

Example:

• Spouse A starts with R100k and ends with R500k (Accrual = R400k).
• Spouse B starts with R100k and ends with R200k (Accrual = R100k).
• The difference is R300k. Spouse B is entitled to a claim of R150k from Spouse A.

What is Included and Excluded?

Under Sections 4 and 5 of the Act, certain assets are automatically excluded from the accrual calculation unless your ANC states otherwise:

• Inheritances and Legacies: Money or property left to you in a Will.
• Donations: Gifts given to you by a third party.
• Personal Injury Damages: Payouts for "pain and suffering" or non-patrimonial loss.
• Specific Exclusions: Assets you expressly list in your ANC to be kept out of the shared pot (e.g., a family business or a specific property).

Protection During the Marriage: Section 8

One of the biggest misconceptions is that you have no say in how your spouse manages their separate estate. While you generally have full autonomy, Section 8 provides a "safety net."If one spouse acts recklessly—for example, by gambling away assets or making massive, unfair donations to third parties—and this conduct seriously prejudices the other spouse's future accrual claim, the prejudiced spouse can approach the High Court. The court has the power to order an immediate division of the accrual to protect the innocent party's interests.

The "Insolvency Shield"

The right to an accrual claim is highly protected:

• It cannot be ceded (transferred) to someone else during the marriage.
• It is not liable to attachment by your spouse's creditors.
• It does not form part of the insolvent estate of a spouse. This ensures that if your partner goes bankrupt, your future right to share in the growth is preserved.

Why Customising Your Accrual Matters

The Act allows for "equal sharing," but it also permits parties to alter the shares. If one partner enters the marriage with significantly more wealth or a much higher earning potential, we may recommend adjusting the split (e.g., to 70/30) or excluding specific high-growth assets. With a registration volume of up to 1,100 prenups annually, our team at Loftus Versveld understands how to draft these complex clauses to meet the strict requirements of the Pretoria Deeds Office.

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