BEWARE THE ACCRUAL REGIME
Are you married by Ante-Nuptial Contract with the Accrual Regime applicable? In this case BEWARE the unintended consequences of failing to apply your mind to how you want to leave your estate.
Let’s look at a little example of what COULD happen if you don’t give very clear instructions to the person drafting your will.
First of all, remember that where a Testator is married out of community of property with accrual then this needs to be considered on dissolution of the marriage which happens by death or divorce.
The accrual gives rise to a Liability if the testator’s estate has accrued more than the surviving spouse’s estate, then on the testator’s death his estate will be liable to pay out to the surviving spouse half the difference of their respective accruals.
If the testator’s estate has accrued less than the surviving spouse’s estate then, on the testator’s death, the surviving spouse will have to pay to the deceased testator’s estate half the difference of their respective accruals.
The result of the accrual could contradict the testator’s intention and drastically affect the circumstances of the parties.
For example:
Mary and John were married out of community of property with accrual and in their Ante-Nuptial Contract they both disclosed their nett commencement values as nil. Mary dies some twenty years later and in her will she bequeathed her entire estate to her sister. On Mary’s death her executor calculated that her actual assets were R1 million but that she had an accrual claim against her husband’s estate for the sum of R2 million.
The possible unintended consequence of this is that Mary has benefited her sister with a R3 million bequest and deprived her husband of R2 million! It may well be that John will now have to sell assets to pay the R2 million into his wife’s estate to be paid out as a bequest to his sister-in-law.
Be very careful if you are married with Accrual that you take proper professional advice to exclude consequences such as these outlined above.
Contact Mike Forsyth at MGF Attorneys, Hilton, for assistance with your will and estate planning. Call 033 343 1100 / 082 800 5257, he will be glad to assist you.
About the author: Mike is a long time Hilton resident and is an Attorney and Conveyancer specialising in Conveyancing, Contracts, Wills and Estate Planning.
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