In terms of section 4(1)(a) of the Matrimonial Property Act 88 of 1984, the accrual of the estate of a spouse is described as follows:
“The accrual of the estate of a spouse is the amount by which the net value of his estate at the dissolution of his marriage exceeds the net value of his estate at the commencement of that marriage.”
In BF v RF 2019 (4) SA 145 (GJ) both parties concluded an ante-nuptial contract in which the husband excluded from the accrual, all shares and loan accounts in two separate companies. Although all shares and loan accounts of the various companies were excluded, the husband only held a portion of the shares in each company at the commencement of their marriage.
During the course of their marriage, the husband acquired further shares in the same two companies. It is common cause that the shares held before conclusion of the ante-nuptial contract were excluded from the accrual. However, the exclusion of the shares acquired after the conclusion of the marriage were disputed.
It is important to note that the additional shares were not acquired through the fruit, or realisation of any of the shares possessed at the commencement of the marriage.
Section 4(1)(b)(ii) of the Matrimonial Property Act 88 of 1984 specifically states as follows:
“an asset which has been excluded from the accrual system in terms of the ante-nuptial contract of the spouses, as well as any other asset which he acquired by virtue of his possession or former possession of the first mentioned asset, is not taken into account as part of that estate at the commencement or the dissolution of his marriage”
On appeal to a full bench in the High Court of South Africa, South Gauteng Division, the court was required to rule on the question whether the shares acquired subsequent to the commencement of the marriage were excluded from the accrual.
The court ruled as follows:
“Married couples cannot, pursuant to section 4(1)(b)(ii), have both an accrual during the marriage and exclude wealth or assets acquired by either of them in the future – ie. during the marriage. There is only one moment at which any asset of a spouse can be excluded and that is at the commencement of the marriage.”
Accordingly, the shares obtained subsequent to the commencement of the marriage could not be excluded from the accrual.
The above case reiterates the importance of proper estate planning.
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