Who gets Grandma’s ring?

-By Michelle le Roux

 

We all have certain ideas about what we want to happen to our assets and possessions when we die. You probably decided long ago who gets the farm, or who you will entrust the family heirloom to.  This is why we make wills, we leave our assets and sentimental possessions to other people and we expect that these wishes will be carried out once we depart.

The reality is that most people in South Africa die without having made a will. Some will have a will, but it will be invalidated for some or other reason. Or, there’s a valid will but it just can’t be found.

For those with massive estates, the implications of not having a will can be disastrous. But even the poorest of poor own a trinket or two, so let’s take a look at how an estate is dissolved without a will.

Intestate succession Act

The legislation that governs this rather-sensitive issue is called the Intestate Succession Act, and it came into effect in 1987. If a person dies without a will, his estate will be liquidated and the proceeds will be distributed according to the rules of this Act.

This is where it’s very important to look at the definitions of a spouse and a child, because although certain people are not legally defined as spouses, they do have protection under this Act.

Who qualifies as a spouse?

In brief, for the purposes of intestate succession, the following persons will qualify as a spouse:

  • Persons married under the Marriage Act, Civil Union Act, or Recognition of Customary Marriages Act;
  • Polygamous and Monogamous Muslim Partners;
  • Same-sex life partners (but not opposite-sex life partners).

A child is defined as a biological or an adopted child.

Another definition to take note of is one called a “child’s share”. This is a rand-amount, and it is currently set at R250 000. The application of this definition will become clear in the section below.

Intestate Succession Rules

What happens when…?

I have a spouse, but no children?

The surviving spouse inherits the entire estate. In the case of a polygamous marriage the spouses will inherit in equal shares.

 

I don’t have a spouse, but I have more than one child?

The children will inherit in equal shares (or the entire estate, in the case of only one child).

 

I have a spouse and children?

The child’s share formula is applied.

The rule is that the spouse inherits the greater of a child’s share or R250 000. In other words, if the estate is worth R900 00 it is divided by three (spouse + two children) = R300 000. The spouse inherits the greater of R300k or a child’s share (R250k), and the balance is divided between the children. In this example the spouse and two kids will each inherit R300k.

 

I don’t have a spouse or children?

My parents will each inherit half of my estate. If one of my parents is predeceased, that part of the estate accrues in equal shares to the descendants of the parent (simply put, my brothers and sisters, or half-brothers and -sisters, as the case may be).

 

I don’t have a spouse, or children, and my parents don’t have any other children?

In this case my entire estate will accrue to my closest blood relatives in equal shares.

 

I don’t have a spouse or any blood relatives?

The estate is not distributed, and if no one claims it, the State may claim the assets after 50 years.

The value of an updated will

The Intestate Succession Act gives us a lot of comfort in knowing that our hard-earned assets won’t just fall into a bottomless pit if we die without a will. It’s likely to stay in the family, but it’s probable that it will be sold for cash and the proceeds distributed to any person who is entitled to it.

What the Act won’t do is to consider any of your wishes. It’s a cold and calculated formula for paying out proceeds; it doesn’t care about the 100 year-old Cuckoo clock or the fact that you wanted to leave an inheritance to someone outside your family.

This Act also doesn’t make any provision for the guardianship of minor children. In the absence of a family member who can act as a guardian, it’s entirely possible that the High Court will appoint a random individual to look after the kids! In addition, their inheritance will be paid into the Guardian’s Fund, so that it won’t be under the control of the family.

The golden rule is to keep your will updated. Make sure it’s valid, and that a copy can be found when the time comes.

Even the simplest estate needs to have a plan. A plan that will give you peace of mind, and make things easier for those you leave behind. Contact us for a check up on your estate plan.

 

<Foundation Family Wealth is an Authorised Financial Services Provider>

 

 

 

 

Was this article useful? Share it!
Was this article useful? Share it!