With Accrual - Marriage out of community of property with the accrual system included explained


Out community of property' means that the parties involved entered into a contract, a written agreement Notarised by a Notary Public prior to the marriage in terms of which each spouse usually retains his or her separate property and have complete freedom to deal with that property as he or she chooses. If during the marriage, one spouse is declared insolvent, the others property is protected from the insolvent spouse's creditors, subject to Section 21 of the Insolvency Act. 

Should you choose this option as your marital regime, you will have to decide whether the accrual system should be applied or not. Under both options of married out of community of property (with or without the accrual system), one spouse's creditors cannot hold the other spouse responsible for debt repayment, in direct contrast to the case where the parties are married in community of property. The accrual system is applicable to all marriages out of community of property, unless the prospective spouses specifically exclude the accrual system in their contract. 'Accrual' means increase and the accrual system is a form of sharing the assets that are built up during the marriage. 

The underlying philosophy in respect of the accrual system is that each party is entitled to take out the asset value that he or she brought into the marriage, and then share what they have built up together. It is however possible to draft the Antenuptial Contract in such a way that the parties share both their pre-marital and post-marital assets on a 50/50 basis, just as if they were married in community of property, but without incurring liability for each other’s debt. 

Best suited for younger couples. Especially where one of the spouses has his/her own business.


What is the accrual system? 

The accrual system is a formula that is used to calculate how much the spouse with the larger estate must pay the smaller estate if the marriage comes to an end through death or divorce. Only property acquired during the marriage can be considered when calculating the accrual.