2. OUT OF COMMUNITY OF PROPERTY WITH ACCRUAL
This system also requires an agreement to be drawn up by an attorney prior to the date of marriage.
In terms of this regime, each spouse has his/her own separate estate and assets are kept in their own names. The spouse with the smaller estate will have a claim against his/her share in the growth of the other spouse’s estate during the marriage. The net estate values will be determined separately upon death or divorce and the larger estate will have to transfer half of the difference to the smaller estate.
If either party owns assets prior to marriage, it needs to be specifically excluded in the ANC, otherwise the asset will be included in the accrual calculation. If both parties have no or very little assets, there will be no commencement value to the estate.
Certain assets will be automatically excluded from the accrual calculation, like an inheritance, donations or damages for personal injury. Assets that are jointly acquired by the parties, is considered part of the accrual.
The net estate values will be determined separately upon death or divorce and the larger estate will have to transfer half of the difference to the smaller estate.
Advantages of marriage out of community of property with accrual:
- Both parties share in the assets accumulated during the marriage and the spouse with the smaller estate benefits;
- All assets acquired before the marriage can be excluded;
- Each spouse keeps his/her own assets and has their own discretion on how to deal with their finances;
- Spouses are not liable for each other’s debt. If one spouse becomes insolvent, creditors cannot touch the assets of the solvent spouse.
Disadvantages of marriage out of community of property with the accrual
- The economically stronger spouse has to share the profits that he/she made during the marriage;
Each couple’s circumstances are unique and they have their own way of dealing with finances, debts and assets. There is no marriage regime that one can recommend as a one-size-fits-all approach and each couple’s circumstances need to be investigated prior to recommending a marriage regime.