Excluding Assets from the Accrual
The accrual system shares the growth of each spouse’s estate during the marriage. But not every asset has to participate. Some are excluded automatically by law. Others can be excluded by agreement in the antenuptial contract itself. Understanding which is which — and using exclusions deliberately — is part of getting the contract right.
Two categories of exclusion
A. Statutory exclusions (automatic)
The Matrimonial Property Act 88 of 1984 automatically excludes four categories of asset from the accrual, without any need to mention them in the contract:
- Inheritances. Any asset inherited by a spouse during the marriage, unless the testator’s will specifically directs that it should form part of the accrual.
- Donations from third parties. Any asset received as a donation during the marriage, on the same basis.
- Assets acquired with excluded assets (substitution). If you sell an inherited home and use the proceeds to buy another, the new asset is also excluded.
- Damages for personal injury. Non-patrimonial damages awarded for pain, suffering, and similar — not including damages for loss of earnings.
The rationale: these are windfalls or non-patrimonial recoveries, not the product of the marriage’s joint efforts.
B. Contractual exclusions (by agreement)
In addition to statutory exclusions, the parties can agree in the antenuptial contract to exclude specific assets they own at the date of marriage. Common examples:
- A family business or shares in a family company owned before the marriage
- A specific immovable property — a holiday home, an investment property, the family farm
- An existing retirement annuity or pension interest
- An existing investment portfolio or unit trust holding
- Trust beneficiary interests
- Any other specifically identified asset of significance
Each exclusion must be clearly described in the contract to be enforceable. Vague drafting (for example, “any business interests”) will be construed strictly. We help identify what should be excluded and draft the descriptions precisely.
The substitution principle
An important nuance: if you exclude an asset and later replace it (for example, sell the family business and reinvest the proceeds in a new venture), the replacement asset is also excluded — provided the link can be traced. Documentation matters here. Bank trail, sale agreement, purchase contract.
The substitution principle is automatic for inheritances and donations. For contractually excluded assets, drafting can either confirm the substitution principle or limit it to specific replacements. We discuss both.
The rule of thumb on what to exclude
Excluding too much defeats the purpose of the accrual system — if everything significant is excluded, nothing material is shared. We typically recommend exclusions only for:
- Assets with strong family or sentimental significance (the family farm, an heirloom property)
- Trust or family-business structures where merging would create operational or governance problems
- Significant pre-marriage wealth that the parties genuinely intend should remain ring-fenced
How exclusions are recorded
Exclusions are listed in the antenuptial contract itself or in a schedule annexed to it. Each excluded asset is described — for property by erf number and title deed reference, for shares by company name and number, for investments by account number and provider. Vague descriptions create disputes later.
Begin your application
List the assets you want excluded on the intake form. We’ll draft the exclusions properly and explain the consequences of each.