Freedom of testation: Don’t take this liberty for granted

Freedom of testation, one of the founding principles of South African law of succession, grants individuals the right to distribute their assets as they see fit, with very few limitations. And yet, there are many who fail to take advantage of this liberty by failing to draft a valid Will and, as a consequence, die intestate. Interestingly, freedom of testation is not widespread and there are many countries around the world that limit the rights of the testator through what is known as ‘forced heirship’ or mandatory succession rights. While those who enjoy freedom of testation may view forced heirship as particularly restrictive, there are those who view succession as the right of the heir, and not the choice of the testator.

Mandatory succession rights are essentially a set of rules which restrict a testator’s freedom to choose how his assets will be distributed after his death, although these rights vary from country to country. While countries such as South Africa, Canada, England, Wales and Northern Ireland enjoy freedom of testation, many civil law jurisdictions and Muslim countries have ‘forced heirship’ or mandatory successful rules which limit a testator’s freedom. Mandatory succession rights are designed to ensure that certain heirs, referred to as ‘protected heirs’, are guaranteed a portion of the testator’s estate regardless of the contents of his Will, specifically when it comes to making provision for a spouse and/or children. These ‘protected heirs’ generally include the spouse and children of the testator, but can also include parents, siblings and other relatives depending on the country or jurisdiction. For instance, in France, 50% to 75% of your estate must pass to your children depending on how many you have. In some jurisdictions, all protected heirs hold equal position while in others certain groups of protected heirs have preference over others. Further, in most countries with forced heirship, only a part of the estate is subject to mandatory succession rights while the remaining portion is left to the testator’s discretion.

Countries with civil law jurisdictions include Germany, France, Italy, Spain, Brazil, Argentina, Child, Russia, China, Japan and parts of the United States. Muslim countries who follow sharia law also have mandatory succession rights in place although these generally include a more complex distribution system which favours male heirs. It is important to note that forced heirship is not the same as intestate succession. While most countries make provision for the distribution of an intestate estate, not all countries have forced heirship rules. Where a country has forced heirship rights, the testator only has freedom of testation over that portion of his estate which is not subject to mandatory succession rights. If his Will conflicts with the country’s forced heirship rules, the protected heirs would have a valid claim for their rightful share of the estate.

If you own assets in a foreign civil law jurisdiction, it is important to understand whether you will be affected by mandatory succession rights in respect of your estate planning. Forced heirship can complicate inheritance especially where you have assets in multiple countries or jurisdictions. Estate planning an international context is generally complex and it is advisable to seek advice from an expert in the particular jurisdiction where your asset is held, bearing in mind that in some circumstances a trust can be used to mitigate the impact of forced heirship rules together with other mechanisms such as lifetime transfers, company ownership, as well as gifts and inheritances, amongst other tools.

In the South African context, testators have very few limitations when drafting a Will, with his Will being the final expression of what the testator wishes to do with his earthly possessions. There are a number of pieces of legislation which serve to limit a testator’s freedom which include the Constitution (being the supreme law of the land), the Matrimonial Property Act, the Maintenance of Surviving Spouses Act, and the Pension Funds Act. Over and above these pieces of legislation, a testator is not permitted to include provisions in his Will which are illegal, immoral or impossible to carry out.

In terms of the Matrimonial Property Act, the marital regime under which a couple is married can restrict their freedom to testate. For example, where a couple is married in community of property, they are equal owners of a single, joint estate. In the event of the first-dying spouse, the joint estate is dissolved, and the surviving spouse has a claim for her 50% of the communal estate. This means that the first-dying spouse is limited to bequeathing his net 50% of the joint estate. Similarly, where a couple is married with the accrual system, the first-dying spouse can only bequeath what remains after the surviving spouse has claimed her share of the accrual, where relevant.

Further, in respect of couples who are married, our law creates a duty of support between two parties to a marriage, and this duty endures after death. To this extent, a surviving spouse may bring a claim against her deceased spouse’s estate for maintenance in terms of the Maintenance of Surviving Spouses Act where the deceased has not made adequate financial provision for her. When assessing such a claim, the courts will take into consideration the financial position of the surviving spouse, her standard of living during the marriage, her ability to generate an income, as well as the amount available for distribution amongst heirs and legatees.

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