Skip Ribbon Commands
Skip to main content

Contact Glacier

  • +27 21 917 9002
    0860 452 364

Or email us

Media Centre

Let’s explain by way of an example:

Example 1

Both spouses entered into the marriage without any assets. The deceased accumulated an estate of R40 million, consisting mainly of business interests and fixed property. The surviving spouse accumulated an estate of R6 million. Let us refer to the deceased as the husband. The husband bequeaths his estate to his children of a previous marriage. The accrual calculation will be as follows:

R40 million – R6 million = R34 million

R34 million ÷ 2 = R17 million

The surviving spouse (wife) is now entitled to an accrual claim of R17 million against the estate of her deceased husband. This claim ranks as a liability and must be settled prior to heirs (children) receiving their share. Clearly this poses a serious problem to the liquidity of the estate. Liquidity refers to the cash available to cover all your liabilities in your estate, without compromising the inheritance of your heirs and beneficiaries.

Example 2 (Using the values in the previous example)

The wife dies, leaving her estate to her children from her previous marriage, knowing her husband has sufficient assets of his own. Her deceased estate now has an accrual claim against her husband’s estate (the surviving spouse) and he would have to pay the amount of the accrual claim into his deceased wife’s estate, to be inherited by his stepchildren.

Should each spouse bequeath the entirety of their estate to the survivor, then the accrual claim will not cause a liquidity shortfall.

Glacier Financial Solutions (PTY)LTD is a licensed financial services provider.
Copyright © Sanlam