Married Out of Community of Property with Accrual? How Accrual Works When You Divorce
Of South Africa's main matrimonial property regimes, accrual is probably the one most frequently misunderstood.
People often know they are married “out of community of property” and assume that means:
What's mine is mine and what's yours is yours.
If your antenuptial contract includes the accrual system, that is only half the story.
During your marriage, you do have separate estates.
But when the marriage ends, the growth in those estates is compared — and one spouse may have a substantial claim against the other.
What does “out of community of property with accrual” mean?
When you are married out of community of property with accrual, you and your spouse each retain your own separate estate during the marriage.
You can own assets in your own names.
You can accumulate your own wealth.
And, generally speaking, you do not automatically become liable for the other spouse's debts simply because you are married.
But the accrual system creates a mechanism for sharing in the growth of your estates when the marriage comes to an end.
The Matrimonial Property Act provides that, when the marriage is dissolved, the spouse whose estate has shown the smaller accrual acquires a claim for half of the difference between the two spouses' accruals.
So the system combines:
financial independence during the marriage
with
sharing of growth when the marriage ends.
What exactly is “accrual”?
In simple terms, accrual means the amount by which your net estate has grown during your marriage.
The basic calculation compares:
the net value of your estate when the marriage began
with
the net value of your estate when the marriage ends.
The Matrimonial Property Act defines accrual on essentially this basis, with adjustments and exclusions required by the Act and the parties' antenuptial contract.
A simple example
Imagine that, after the relevant calculations:
Spouse A's estate has grown by R2 million; and
Spouse B's estate has grown by R800,000.
The difference between their accruals is R1.2 million.
Half of that difference is R600,000.
Spouse B would therefore have an accrual claim of R600,000 against Spouse A.
The idea is not that the spouses divide everything they own.
It is the difference in the growth of their estates that is shared.
This is why your antenuptial contract matters
If you are married with accrual, your ANC is one of the most important documents in your divorce.
It may record the commencement value of each person's estate when the marriage began.
It may also expressly exclude particular assets from the accrual system.
For example, an ANC might exclude:
a property one spouse owned before marriage;
an existing business;
shares in a family company; or
another specifically identified asset.
An excluded asset — and in certain circumstances assets derived from it — may therefore fall outside the accrual calculation.
This is why it is not enough to know vaguely that you “signed an ANC”.
You need to read what it actually says.
What about inheritances?
There is another important exclusion.
As a general rule, inheritances, legacies and donations received from third parties during a marriage subject to accrual are excluded from the recipient spouse's accrual, unless the ANC provides otherwise or the person making the inheritance or donation stipulates otherwise.
So if one spouse inherited R1 million during the marriage, it does not necessarily mean that the other spouse is entitled to share in that R1 million through accrual.
But tracing what happened to inherited or excluded money can sometimes become complicated.
For example, if money has been invested, used to acquire another asset, mixed with other funds or used in a business, it may be necessary to establish exactly what is and is not excluded.
Does it matter whose name the house is in?
Yes — but perhaps not in the way you think.
Unlike a marriage in community of property, a house registered in one spouse's name ordinarily belongs to that spouse's separate estate.
But that does not necessarily mean its value is irrelevant to the divorce.
Unless the property is excluded from accrual, its value may form part of that spouse's estate for purposes of calculating how much their estate has grown.
So there is a difference between:
“Who owns this asset?”
and
“Does the value of this asset affect the accrual calculation?”
Those are not the same question.
What if one spouse paid for an asset registered to the other?
Again, accrual works differently from a simple item-by-item division.
The central question is generally not who paid each instalment or who made the larger direct contribution to each individual asset.
The exercise is to establish the value of each spouse's estate and calculate the respective accruals in accordance with the Matrimonial Property Act and the ANC.
This can be important in marriages where one person earned considerably more while the other spouse took on more unpaid family or caregiving responsibilities.
The accrual system does not require couples to retrospectively calculate who paid for every grocery bill, school fee and bond instalment.
It looks at the growth of the estates.
When is accrual calculated?
Another point that often surprises separating couples is that the accrual claim arises when the marriage is dissolved.
For divorce, the relevant date for determining the accrual is ordinarily the date the marriage is legally dissolved — not simply the date the spouses separated or stopped living together. South African courts have confirmed that the accrual claim arises on dissolution of the marriage.
That can become important if there is a long delay between separation and divorce.
It is also one reason why full and honest financial disclosure during the divorce process matters.
What about pensions?
Retirement interests can also affect the financial consequences of an accrual marriage.
The Divorce Act provides for a defined pension interest to be treated as part of a spouse's assets when determining the patrimonial benefits arising from divorce.
Pension interests can therefore influence an accrual calculation and, where the legal requirements are met and the divorce order is correctly drafted, payment can potentially be made through the relevant fund.
This is an area where precision matters enormously.
Does an accrual claim have to be paid in cash?
Not necessarily.
If Spouse A owes Spouse B R600,000 under the accrual calculation, the couple may be able to structure their overall settlement in different ways.
For example:
a cash payment;
transfer of an asset;
adjustment to the way property sale proceeds are divided; or
a combination of different arrangements.
The law establishes the financial claim.
The couple can then negotiate a practical way of settling it.
This is one of the benefits of reaching agreement rather than asking a court to determine every aspect of your financial separation.
Can an accrual benefit ever be forfeited?
Potentially.
A right to share in accrual is a patrimonial benefit of the marriage, and the Divorce Act permits a court in appropriate cases to order full or partial forfeiture of patrimonial benefits where one spouse would otherwise be unduly benefited.
The court considers factors including the duration of the marriage, the circumstances leading to its breakdown and substantial misconduct.
Again, this is not an automatic consequence of marital misconduct.
It is an exceptional remedy that depends on the particular circumstances.
What doesn't accrual decide?
Your accrual system does not determine:
parenting arrangements;
child maintenance;
where children will live;
care and contact;
or automatically determine whether spousal maintenance is payable.
Spousal maintenance is a separate enquiry, and the Divorce Act allows a court to make an agreed maintenance arrangement part of the divorce order or, in a contested matter, to consider a range of factors in deciding whether maintenance should be awarded.
What do couples need to do in an amicable divorce?
If you are married with accrual, you will generally need to establish:
each spouse's commencement value;
the current assets and liabilities in each estate;
whether particular assets are excluded by the ANC;
whether inheritances or donations need to be excluded;
the relevant values of properties, businesses and investments;
retirement interests;
each spouse's net accrual; and
the resulting accrual claim.
That sounds intimidating.
But once the information is gathered, it becomes a calculation followed by a negotiation about how the resulting financial position will practically be implemented.
How On Good Terms helps
Accrual is a good example of why structured financial disclosure matters in divorce.
Two people can genuinely want an amicable divorce and still have completely different ideas about what they are entitled to.
Often the disagreement begins because neither person has yet seen the full calculation.
On Good Terms helps couples collect the relevant information, identify exclusions and areas requiring legal input, understand the decisions that still need to be made and work towards a financial settlement that can be properly recorded.
Because “let's just split everything fairly” sounds simple.
The important question is:
What does the law actually mean by fair in your marriage?
This article provides general information about South African law and is not legal advice for your particular circumstances.
This is general information about South African law and practice, written to help you understand your situation. It is not advice about your particular circumstances, and it does not replace advice from your own attorney. If something here raises a question about your own separation, a person will answer it.