Fortunately, our legal system provides for freedom of testation which means that the person writing their Will can provide for the distribution of their estate among friends, family, spouses and charities as they see fit. They can also choose to disinherit a person from benefiting from their estate, subject to certain exceptions. If a person chooses not to draft a Will or their Will is found to be invalid, they will be deemed to have died intestate and the laws of intestate succession will determine the distribution of their assets. The consequences to the family of someone dying intestate are never ideal and can lead to heartache for those left behind. Here’s what happens when you die without a valid Will:
When you die without a Will, the Master of the High Court is tasked with the job of appointing an Executor to your estate. An Executor appointed by the Master of the High Court is known as an Executor Dative. The first job of the Executor Dative is to try and locate a Will by making enquiries at places such as the deceased’s attorney, bank, accountant and insurers. If no Will can be traced, the estate will be wound up as an intestate estate in accordance with the laws of intestacy.
Keep in mind that, although your intestate heirs can nominate a person to be appointed as executor, the onus remains on the Master of the High Court to confirm the appointment. Family dynamics are rarely simple and reaching an agreement on who should be nominated as executor can cause unnecessary delays in winding up the estate. Unlike in the case of intestacy, a significant benefit of having a will is that the testator or testatrix can negotiate lower executor’s fees – whereas, in the case of intestacy, this fee cannot be negotiated.
Your matrimonial property regime
The impact of one’s matrimonial property regime can have a bearing on intestate succession, and it is important to understand the effects on the surviving spouse should the first dying spouse die without a valid will. Where the deceased was married in community of property, keep in mind that the rules of intestacy only apply to their 50% share of the joint estate. On the other hand, where the first-dying spouse was married with the accrual system, note that the rules of intestacy will only apply after the application of the accrual claim, keeping in mind that this could potentially include a claim either against or in favour of the deceased’s estate. If the first-dying spouse was married out of community excluding the accrual system, note that the rules of intestacy will be applicable to his/her estate, and the assets will devolve accordingly.
Generally, on the death of one parent, the surviving parent will be the sole legal guardian of the minor child/children. However, where the sole surviving guardian of a minor child passes away without having nominated a guardian in terms of their will, the responsibility falls on the State to appoint a legal guardian for the child/children, which is not an ideal situation. Having a valid will enables parents of minor children to nominate guardians (and alternate guardians) for their minor children to ensure that their children will be adequately cared for if they are no longer around.
Intestate succession laws
In terms of the Intestate Succession Act, the assets of a person who dies without a valid will be distributed systematically amongst his/her beneficiaries in terms of the process set out in the Act. These laws can be broadly summarised as follows:
- Spouse, no dependants: If the deceased leaves a surviving spouse and no dependants, the spouse will inherit their entire estate. In this regard, it is important to note that this includes couples in a same-sex civil union, a spouse in a religious marriage, and polygamous spouses in terms of customary marriages. Whereas cohabiting couples were excluded from inheriting in terms of the laws of intestate succession, a judgement in the matter of Bwanya vs the Master of the High Court concluded otherwise. In 2020, the court ruled that the Intestate Succession Act which precluded cohabitants from inheriting was outdated and that heterosexual couples in a life-long relationship should be protected, although this is still to be confirmed by the Constitutional Court.
- Dependants, no spouse: Where the deceased leaves behind only children, then their children will inherit their deceased estate in equal shares. It is important to remember that the principle of per stirpes applies in the case of intestate succession. For instance, where the deceased leaves children but no spouse, the children will inherit the estate in equal shares. Where one child has died before the deceased and left behind children of their own, those children will inherit from the deceased per stirpes through representation.
- Spouse and dependants: If the deceased leaves behind a spouse (or spouses, in the case of polygamous marriages) and children, then the estate will be distributed by determining the value of a child’s share. A child’s share is calculated by adding up the value of the deceased estate and dividing it by the number of spouses and children of the deceased. The surviving spouse (or spouses) will receive a child’s share or R250 000, whichever is the greater. Thereafter, each child will receive an equal share of the deceased estate.
- Parents only: Where the deceased has only surviving parents, then their parents will inherit their entire estate. Where there is only one surviving parent, that parent will inherit the entire estate.
- Siblings only: If the only surviving heirs are the deceased’s siblings, then they will inherit the deceased estate in equal shares.
- No spouse, children, parents or siblings: Where the deceased has no spouse, children or parents, his/her nearest blood relation will inherit the entire estate.
- No blood relatives: Where a person dies leaving no heirs, the assets in their estate will be forfeited to the State and placed in the Guardian’s Fund for safekeeping for a period of 30 years. If no heirs come forward during this period, the money will become the property of the State.
The child’s share calculation
While seemingly innocuous, the application of the child’s share calculation in the event of the first-dying spouse can have devastating effects on the surviving spouse and children of the deceased. By way of example, let’s assume that Mr T’s estate is valued at R5 000 000 and that he leaves behind Mrs T and their two minor children when he dies. When applying the child’s share calculation, Mr T’s estate will be divided by three (being Mrs T and their two children), meaning that the child’s share will be valued at R1 666 667. As the child’s share is greater than R250 000, Mrs T and the two children will each inherit R1 666 667 from Mr T’s estate.
Immoveable property in an intestate estate
Also important to keep in mind is that the distribution of immoveable property in the event of an intestate death can result in estate planning problems. Let’s take the example of Mrs X who was married in community of property and who leaves behind Mr X and their two minor children who reside in the family’s primary residence. On Mrs X’s death, her share of the joint estate will be distributed amongst her intestate heirs (being Mr X and the two children) according to the child’s share calculation, meaning that Mr X and each child will effectively inherit a share of the primary residence. Should Mr X need to sell the property, he will need to obtain permission from the Master who acts on behalf of the minor children. Also important to keep in mind is that, where fixed property is inherited by multiple heirs, it may be difficult for the heirs to reach agreement on how that asset should be dealt with which can cause unnecessary delays in the estate administration.
Lastly, keep in mind that an appropriately structured will and estate plan can be very effective in reducing estate duty and other taxes. Where a deceased dies without a valid will, he/she effectively sacrifices the opportunity to structure the estate so as to reduce taxes and maximise the financial legacy that ultimately will devolve on his/her loved ones.
Have a super day.