Divorce can be a highly stressful and complex process, and the laws governing divorce in South Africa add additional layers of intricacy, particularly when it comes to financial aspects like accrual. Understanding how to calculate accrual under South African law is crucial for a fair division of assets.
In South Africa, the accrual system applies to marriages that are out of community of property. If a couple fails to register an antenuptial contract, they will automatically be married in community of property.
Importance of Accrual in South African Divorces
Understanding accrual is particularly essential under South African law due to the prevalence of the accrual system in modern marriages. This system aims to balance economic power and contribution in a marriage, especially when one spouse is financially stronger than the other. Neglecting to calculate the accrual correctly can lead to inequitable asset distribution and financial difficulties post-divorce.
This system is designed to achieve a level of fairness, ensuring that both spouses share in the growth of assets accrued during the marriage. Essentially, each spouse’s estate is calculated both at the commencement and dissolution of the marriage. The difference in value, known as the accrual, could be claimable by the spouse with the smaller accrual.
How Is Accrual Calculated On The Date Of Divorce?
Accrual is the net increase in the value of a spouse’s estate since the date of marriage. It is the difference between the commencement value before the marriage and the end value on the date of the divorce. To make sure the values are recorded and calculated correctly, couples can benefit from the expertise of financial and legal professionals.
The spouse with the largest estate (nett value) will have to transfer half of the difference of the nett growth to the spouse with the smaller estate. This ensures that both parties share in the accrual (nett increase) incurred during the marriage.
What Are The Steps Involved in Calculating Accrual in South African Divorces?
The following steps should be taken to calculate an accrual claim:
- Determine the Commencement value: One of the first steps in calculating accrual under South African law is determining the commencement value of each spouse’s estate. The parties’ commencement values, or specific exclusions are agreed upon before marriage and noted in the antenuptial contract, based on the assets and liabilities at the beginning of the marriage. This value is usually set at 0 for young couples with minimal assets.
- Determine End Value: At the end of the marriage, the net end value of each spouse’s estate is determined. This includes any assets acquired and liabilities incurred during the marriage.
- Calculate Accrual: Subtract the commencement value (adjusted with inflation) from the end value for each spouse’s estate. The difference is the accrual for each estate.
- Calculate Claimable Accrual: The spouse with the smaller estate has a claim against the spouse with the larger estate. This is calculated by subtracting the smaller accrual from the larger one and then dividing by two.
What Is An Example Of An Accrual Calculation?
Step 1: Commencement Values
Mr and Mrs Botha were married on 3 December 2011. Mrs Botha had a commencement value of R10,000.00 on the date of marriage. If we adjust the amount with inflation, Mrs Botha’s commencement value will be valued at approximately R20,000.00 in 2024.
Mr Botha: R0
Mrs Botha: R20,000.00
Step 2: End Values
Draft a list of each party’s assets and liabilities. Deduct the liabilities from the assets to ascertain what the end values are.
Mr Botha: R200,000.00
Mrs Botha: R160,000.00
Step 3: Calculate Accrual
Mr Botha’s Accrual: R200,000.00 – R0 = R200,000.00
Mrs Botha’s Accrual: R160,000.00 – R20,000.00 = R140,000.00
Step 4: Calculate Claimable Accrual
Mr Botha has the larger accrual, so Mrs Botha will have a claim against his estate for 50% of the difference in the accrual:
R200,000.00 – R140,000.00 = R60,000.00.
The accrual claim will be 50% of the difference in accrual: R60,000.00/2 = R30,000.00.
Thus, Mrs Botha will have an accrual claim of R30,000.00 against Mr Botha.
Tips for Accurate Accrual Calculations
Accurate calculation of accrual is a complicated process that requires a sound understanding of South African law and often involves negotiations between the parties. For this reason, it’s highly recommended to consult legal professionals experienced in South African family law to navigate this intricate terrain and ensure that the correct commencement value is noted in the antenuptial contract.
South African law allows for certain exclusions from the accrual, which needs to be noted in the antenuptial contract. These could be inheritances or specific assets that both parties agree should not form part of the accrual calculation. Being aware of these exclusions is vital for an accurate accrual calculation.
In South Africa, an antenuptial contract can dictate the terms of the accrual system between spouses. It is essential to have this contract drawn up and notarized before the marriage. The contract will outline what is included or excluded in the accrual calculation, providing a clear framework for asset division should a divorce occur.
Consult With Expert Divorce Lawyers in Calculating Accrual Today
Calculating accrual in a divorce under South African law is a complex and critical part of the divorce process. Due to the specific nature of South African marital laws, it is imperative to contact one of our experienced family and divorce lawyers at Burger Huyser Attorneys, who understand how the accrual system works and how to calculate it accurately. With proper knowledge and advice, you can ensure a fair financial outcome in a challenging life event.
DISCLAIMER: Information provided in this article does not, and is not intended to constitute legal advice. READ MORE
