Being married with accrual is in our opinion the most appropriate and ideal system. A successful marriage is in fact based on equality and a partnership. Upon dissolution of the marriage, whether it is by death or divorce, the net values of the estates of each spouse must be determined separately and the larger estate must transfer an amount equal to half of the difference, to the smaller estate. The accrual system does not apply automatically to all marriages out of community of property.
For the accrual system to apply, the ANC must be drafted in a certain way. The accrual system incorporates a calculation that is applied when the marriage is dissolved by divorce. The spouses will share the assets during the course of their marriage based on a particular calculation when the marriage is terminated.
There are certain assets which will not be taken into account when determining the accrual (and cannot be included in calculation of the the net value of the estate):
- Any asset excluded from the accrual system under the ANC, as well as any other asset that the spouse acquired by virtue of his/her possession or former possession of such asset.
- Any inheritance, legacy, trust or donation received by a spouse during the marriage from any third party, as well as any other asset that the spouse has acquired by virtue of his/her possession or former possession of the inheritance, legacy, trust or donation, unless the spouses have agreed otherwise in their ANC or the testator/trix or donor has stipulated otherwise.
- Any donation between the spouses.
- Any amount that accrued to a spouse by way of damages, other than damages for patrimonial loss or the proceeds of an insurance policy in respect of a dread disease.
The fact that a Trust’s assets are a trust’s assets does not automatically exclude those trust assets from an accrual determination.
The court may pierce the corporate veil of the Trust if the trust is in fact the alter ego of the donor / trustee. This means that the Court can declare that the Trust assets form part of the accrued estate.
Where a spouse has transferred assets in his/her name into a trust, in order for the court to take such assets into account, there must be evidence first that the party in question controlled the trust, and second that, but for the trust, he/she would have acquired and owned the assets in his/her own name.