by Tobias | 22.Apr.2017 | Estate Planning
The right thing to do? The purpose of the Accrual System is to create fairness between spouses, especially in the old traditional homes where the wife is running the household, allowing her husband to build up wealth and to support the family as a whole. This is accomplished by, on the dissolution of the marriage (by death of divorce), dividing the value of the assets obtained during the marriage in equal shares between them. This means that the husband and wife will share equally in the profits of their marriage. With a financial agreement this fair and equitable between spouses, nothing can go wrong, right? So what went wrong? Unfortunately, the same System that was implemented to create fairness (as seen above), can in some circumstances also have negative consequences that might not be fair to the remaining spouse, for instance where a spouse dies insolvent (assets are less than liabilities). Should your spouse die, leaving behind only liabilities, his estate will have a claim against you, being the surviving spouse, for half a share of your estate value due to the consequences of the accrual system. So in the midst of your grief and shock at the loss of your spouse, you may find that not only do you no longer have a source of income (spouses’ salary), but you will also have to pay in an amount of money to the executor to cover debts that you yourself had not incurred. It may mean that you will have to take out an additional bond on the property or incur further debt to cover estate liabilities. Soon your...
by Tobias | 11.Apr.2017 | Estate Planning, Wills
So many South Africans today are living together as man and wife without getting married and this occurrence almost doubles each year. The aim of this article is to look at the rights of a surviving partner at death. Currently in South Africa, there is no law regulating the rights of partners in a common law partnership. This means that you are not automatically seen as the spouse of your partner. The South African courts have on occasion come to the assistance of couples in the form of a universal partnership. This subject does not form part of our discussion today. Inheritance: In terms of the Intestate succession Act (rules applicable when a person dies without having a Will), a partner is not automatically entitled to an inheritance from his or her partner’s estate, no matter how long they have lived together. For a partner to inherit, such partner must be a nominated beneficiary in the last Will of the deceased partner. Estate Duty: For Estate Duty purposes, a permanent life partner who is a nominated beneficiary in the Will of the deceased partner is seen as a spouse and will qualify for the “spousal benefit exemption”. This means that no Estate Duty will be payable on the value of the inheritance received by the surviving partner. Claiming maintenance from the estate: In most cases a surviving partner who is not entitled to inherit from the estate of his or her deceased partner, would like to claim maintenance against the estate. This is normal as both parties contribute to the common household. With the one partner deceased, the financial...
