Legal Definitions - clause of accrual

A clause of accrual is a specific provision found within a legal document, such as a will or a property deed, that determines what happens to a share of an asset if one of the intended recipients passes away before they can fully receive or own that share. This clause ensures that the deceased recipient's portion is automatically transferred to the remaining surviving recipients, rather than becoming part of the deceased's own estate to be distributed separately.

• Example 1: Inheritance in a Will

  Imagine a parent, Mr. Henderson, drafts a will intending to leave his entire estate equally to his two adult children, Sarah and Michael. To prevent potential complications if one child were to pass away before him, Mr. Henderson includes a clause stating: "Should either Sarah or Michael predecease me, their share of my estate shall accrue to the benefit of the surviving child."

  This illustrates a clause of accrual because if, for instance, Michael were to die before Mr. Henderson, Michael's intended share would not go to Michael's own heirs (like his spouse or children). Instead, according to the clause of accrual, Michael's entire share would automatically be added to Sarah's inheritance, making her the sole beneficiary of Mr. Henderson's estate.

• Example 2: Co-owned Property (Tenants in Common)

  Consider two friends, Lisa and Ben, who purchase a vacation home together as "tenants in common," meaning each owns a distinct, separate share (e.g., 50% each) that they can typically pass on to their own heirs. However, they want to ensure that if one of them dies, the other automatically gets full ownership of the property without it going through the deceased's estate. They include a clause in their deed of ownership: "In the event that either Lisa or Ben predeceases the other while holding this property as tenants in common, the deceased's interest in the property shall accrue to the surviving tenant."

  Here, the clause of accrual means that if Lisa passes away, her 50% ownership interest in the vacation home does not become part of her estate to be inherited by her family. Instead, due to the clause, her share automatically transfers to Ben, making him the sole owner of the entire property. This avoids the property being split between a surviving co-owner and the deceased's heirs.