by Tobias | 08.May.2017 | Estate Planning
WHEN THERE WAS A SECOND MARRIAGE Can the inheritance of children from the first marriage be protected? By Hein Klokow, Estate Specialist The question is sometimes asked: Can a spouse from a second marriage walk away with all the assets from your estate, even though you have bequeathed everything to your children from the first marriage? In the normal scheme of things, it might happen that a person (the testator) marries again after the death of his first wife. This might cast doubts in the minds of his children. They might wonder what might happen to all the assets that their late mother and testator worked so hard for all their lives. The testator might try to ease their minds by marrying out of community of property, without the right of accrual. He might even go further and make the children his only inheritors in his will. In some cases, it is also the second wife’s second marriage and she usually had already inherited assets from her late husband. The question, however, remains whether the children will remain his exclusive beneficiaries to the exclusion of his new spouse. The answer is No! The new spouse will be acting within her rights in terms of the Maintenance of Surviving Spouse Act if she instigates a claim for maintenance against the estate of the testator. Such a claim might liquidate the estate of the testator so that nothing remains for the other ‘would-be’ beneficiaries. The reason is that all the liabilities in the estate (including the maintenance claim) must be paid out first, and only then will the balance be paid...
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...
by Tobias | 14.Jul.2016 | Estate Planning, Trusts
The Responsibilities of Estate Handling Services in South Africa Whilst in the midst of enjoying our lives, it is all too easy to overlook the simple fact that each of us must, at some time, confront the inevitability of death. In practice, this has long been a prospect that many choose to avoid contemplating more than superficially and, as a result, it is an eventuality for which such individuals tend to make provision only at the last moment, if they do so at all. While this policy of avoidance may help to shield them from the reality of their mortality, upon their demise, it can have serious or even devastating consequences for those loved ones whom they have left behind. Imagine, for instance, being unexpectedly widowed and left, not only with the cost of a funeral to meet, but with a string of unpaid debts and insufficient funds with which to settle them. What might it be like having to face all of this at a time when your prime need is to mourn? A chastening thought indeed and one that should prompt anyone who claims to love his or her family to take a closer look at how the help of one of the country’s professional estate handling services could ensure that he or she need have no such concerns about their future financial security. What then should one expect from a firm entrusted with this task? What precisely are its responsibilities? For convenience, these may be divided into those associated with the planning phase and those that are required for the subsequent execution of whatever plan...
by Tobias | 24.May.2016 | Estate Planning, Executor Services
Choosing Who Will Best Manage Your Deceased Estate Most men select a brother or a long-standing friend for the role when they are choosing a best man to support them on their wedding day. When, at a later stage, the married couple are planning to celebrate the baptism of their child; they will normally be equally discerning when deciding who will act as its godparents. In both cases, the choice is one based upon trust and the knowledge that, with just a brief rehearsal, each of the parties will be able to fulfil his or her roles flawlessly. It is surprising, therefore , that so many spouses and parents fail to apply the same criteria when appointing the executor who will, one day, be responsible for the management of their deceased estate. It will often be seen as a gesture of trust by a son, a daughter, a sibling or even a close friend who may be allocated this role. However, more significantly, the task of an executor is a serious and demanding responsibility and one that, without adequate knowledge and experience, can quickly become fraught with difficulties. While, in essence, that responsibility involves ensuring that the wishes of the deceased, as stated in his or her last will and testament, are fulfilled in the manner requested, the process requires the incumbent to ensure each step in the process complies fully with any prevailing laws of South Africa that may be applicable to deceased estate management. Executors are faced with a number of duties and, before embarking upon them, he or she will need to begin by gathering all...
