Exclusion of particular Assets
When a particular asset (and assets acquired by virtue thereof) is excluded from the accrual of a spouse, such an asset will not be taken into account as part of that spouse’s estate when calculating the accrual.
Elliot advises that it will be of particular relevance for parties to exclude assets from the accrual in the following circumstances:
a) Where a spouse has promised the particular property to a third party;
b) Where income is derived from a share in a family business;
c) Where a party has speculative property which may generate significant capital profits;
d) Where a party has an interest in a family trust and the capital of the trust, which may be distributed to him as a beneficiaries of that trust.
The effect of excluding a particular asset from the accrual system can be explained by means of the following easy example:
X is the owner of immovable property to the value of R 500 000.00.
X and Y enter into an antenuptial contract.
« If X declares that amount (R500 000.00) to be the nett commencement |
value of his estate, that amount (as escalated) will not be included in I
the accrual of his estate. However, the increase in the value of the !
property due to inflation and improvements or extensions thereto, will be
included in the accrual of his estate on dissolution of the marriage. ■
Y will thus benefit from the increase in the value of the property.
« If the particular property itself is excluded from the accrual, the ! property will not be taken into account when calculating the accrual. The ! increase in the value of the property due to inflation and improvements or > extensions thereto, will also not form part of the accrual and Y will thus '
not derive any benefit thereto either.
(Take note that the value of the excluded assets must also be excluded from the declared nett commencement value of the appropriate spouse's estate. In other words, the value of the excluded assets must not be taken into account when calculating the nett commencement value of the specific spouse’s estate).
When particular assets are excluded, it must be stipulated whether the income derived from such assets forms part of the accrual or not.
"The assets of the parties mentioned below, as well as all liabilities attached thereto, or any other asset acquired by such party by virtue of his/her possession thereof, shall not be taken into account as part of such party’s estate either on the date of conclusion of the marriage or upon dissolution of the marriage:
1. The assets of the husband thus excluded are R (figures)(words) consisting of:
-List the assets excluded-
2. The assets of the wife thus excluded are R (figures)(words) consisting of:
-List of assets excluded-"