What will happen now?
Have you thought about what may happen if your spouse dies after 12 or more years of marriage? What could the financial implications be? Here are a few scenario's...
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Article: FNB Trust Services
Scenario 1:
Husband and wife married in Community of Property with no Will in place. One half of all the assets in the Joint Estate is owned by the wife, because of the marital regime.
The other half share of the Joint Estate which is owned by the husband will devolve in terms of the Intestate Succession Act. For example if the husband had 2 children and the value of his half share of the Joint Estate is R 900 000, his share of the Estate will devolve as follows:
Spouse:
Will inherit the greater of R125 000 or a child’s share , which is calculated
by dividing the number of children of the deceased plus one for the surviving
spouse so in other words, R 900 000 divided by 2 (children) plus one for the
spouse, therefore 3, so a child’s share would therefore be R300 000
The spouse will therefore inherit R300 000 which is the greater of R125 000 or
a child’s share.
Children:
Will share equally in the remainder of the Estate. If they are minors , their
Inheritance will be paid over to the Guardians Fund which is administered by
the Master of the High Court. It will be kept in this Fund for them until
attaining the age of 18 years which is now majority.
Clearly we have here a situation where the spouse and the children would financially be in trouble. This is where planning is so important.
Scenario 2:
Husband and wife are married out of community of property without accrual. In terms of the deceased’s Will, he has left all his assets to his children not providing for his wife who is financially dependant on him.
In terms of the Maintenance of Surviving Spouse’s Act, the wife will have a claim for her reasonable maintenance against the husband’s estate.
In the determination of the reasonable maintenance needs of the survivor, the following factors shall be taken into account:
The amount in the estate of the husband available for distribution
The existing and expected means, earning capacity, financial needs and obligations of the survivor, the subsistence of the marriage, the standard of living of the survivor during the subsistence of the marriage and her age.
Once again we have a situation where the wife would be under financial duress and the children, depending of the assets size of the estate, could now receive less than the testator’s original intention.
Scenario 3:
Husband is married for 12 years and it is his second marriage. He is married out of community of property to his present spouse and owns a property which he would like his children from his first marriage to inherit ultimately, but would like his present wife to continue living in this property rent free after his death and for his children to only inherit this property once his wife has passed away.
Suggestion:
In terms of his will, the property in bequeathed to the children subject to the wife’s usufruct until her death which means that she may continue to live in the property until her death , free of charge , but she will not be allowed to sell the property without the children’s permission.
If the children are minor’s (which is likely if the marriage has only existed for 12 years) they cannot give permission until they are majors.
Therefore it is important to plan one’s estate taking into consideration the special needs of the family and the assets available.
Are you certain that your assets will be divided accordingly amongst your loved ones?