Although freedom of testation remains a fundamental principle of our law of succession which is constitutionally guaranteed, this right is not without restrictions. While you are, generally speaking, free to bequeath your assets to anyone you choose, there are several statutory and common law limitations to this right. In this article, we provide insight for testators on what limitations they may face when drafting a Will.
Common law limitations
In terms of our common law, a person drafting a Will must ensure that no provision in his Will is unlawful, against public policy, impracticably vague or impossible to fulfil, and if found to be of such a nature, cannot be executed. For example, if a testator bequeaths property to his daughter on condition that she divorces her husband, such a provision will be considered against public policy. Another important common law limitation on freedom of testation is the right of a child to claim maintenance from his parent’s estate to the extent that the deceased parent failed to provide for her in terms of his Will. Remember, the duty to support one’s child – which is a duty that falls on both parents according to their respective means – arises automatically at the birth of the child and continues until that child becomes financially independent. This duty of support does not die with a parent and, as such, a parent has a duty to make adequate provision for the child’s maintenance in terms of their Will. Where a deceased parent fails to do so, the minor child can lodge a claim for maintenance against the deceased’s estate, with this claim ranking above all other claims against the deceased estate. A child over the age of 18 who has not been provided for by the deceased parent has the right to lodge a claim for maintenance but, in doing so, will need to prove that she is in need of support. What is important to bear in mind when drafting your Will is that any maintenance orders in place at the time of your death will be binding on your deceased estate, so you need to take this into account when calculating your estate liquidity.
The Wills Act
Another limitation in respect of testation can be found in terms of Section 2B of the Wills Act which effectively provides a three-month window period for divorcees to update their Wills following a divorce order. This section provides that if a divorcee dies within three months of the divorce, any Will which was drafted before the date of divorce must be executed as if their former spouse had pre-deceased him. After this three-month window period, if the divorcee has still not updated his Will, it will be assumed that he intended his former spouse to inherit accordingly.
Marriage in community of property
Couples who are married in community of property share a joint estate in equal, undivided shares which places a limitation in respect of testation. This is because, upon the death of the first-dying spouse, only 50% of the joint estate is his to bequeath and, as such, each spouse should remain cognizant of this when drafting their respective Wills. Practically speaking, upon the death of the first spouse, the executor winds up the joint estate against which the surviving spouse has a claim for 50% of the value of the net estate.
The accrual system
Similarly, couples married with the inclusion of the accrual system should understand how this marital regime impact on their freedom of testation. In such marriages, the surviving spouse may have a claim against the deceased spouse’s estate for 50% of the accrual if the deceased’s estate is found to be the larger of the two and this should be factored in during the estate planning process. Remember, an accrual claim is a preferent claim and the deceased estate is obliged to pay the surviving spouse her share before the distribution of any assets to the deceased’s heirs.
Maintenance of surviving spouses
The Maintenance of Surviving Spouses Act imposes a statutory limitation on a testator’s freedom by providing a surviving spouse the right to claim reasonable maintenance from the deceased spouse’s estate in circumstances where she has not been adequately provided for, a right that is not only applicable to all marriage contracts but which has been extended to heterosexual and same-sex permanent life partners. In determining the reasonable maintenance needs of the surviving spouse or life partner, consideration is given to the amount in the deceased’s estate for distribution amongst his heirs, the surviving spouse’s standard of living during the course of the marriage, and her capacity to provide for herself going forward.
Retirement fund benefits
Another statutory limitation on one’s freedom of testation can be found in terms of Section 37C of the Pension Funds Act which provides that any death benefit payable by a pension, provident or retirement annuity fund does not form part of the deceased’s estate and that such benefits must be distributed in accordance with the Act. In terms of this section, the trustees of the retirement fund have an obligation to establish who is financially dependent on the deceased and to distribute the benefits according to their determination. This means while you may have nominated beneficiaries on your retirement fund forms, this will be used only as a guide by the trustees when determining who is financially – either wholly or in part – on you, keeping in mind that this could include people that you are not legally obligated to support such as aged parents, siblings or stepchildren. As such, when drafting your Will, it is best not to mention your retirement fund benefits in your Will as they do not form part of your estate and will not be administered by your nominated executor.
Subdivision of agricultural land
An important limitation for farmers and farmland owners to be aware of is the provisions of the Subdivision of Agricultural Land Act 1970. In terms of this Act, a farm owner cannot bequeath agricultural land to two or more beneficiaries without obtaining consent for such subdivision from the Minister of Agriculture – and if such consent is not obtained, the testator’s wishes cannot be executed which can cause immeasurable problems for the heirs. There are a number of ways for farm owners to circumvent this limitation and, if the intention is for the land to be passed on to two or more beneficiaries, it is advisable to undertake a careful estate planning exercise. A practical way of dealing with such a situation would be to house the farm in a company where the heirs are shareholders or move the farm into an inter vivos trust with the intended heirs as nominated beneficiaries. However, this process can be complex and have enormous tax implications for the estate planner, so our advice is to seek the advice of a competent advisor.
Limitation on fideicommissaries
A fideicommissum is a limited right which is normally attached to immoveable property where, for instance, a particular property is bequeathed to a person (the fiduciary) in terms of a Will on condition that on the occurrence of a certain event (normally the death of the fiduciary), the property must be passed on to the next set of heirs – and upon their death, to the next generation of heirs. However, in terms of Section 6 of the Immoveable Property Act, fideicommissaries created after the commencement of the Act are limited to two successive transfers after which the property will be transferred free of the fideicommissum.
As is evident from the above, estate planning and drafting a valid, executable Will can be complex and multi-faceted and, as such, should be undertaken with the assistance of an estate planning expert to ensure that your objectives are actionable.
Have a wonderful day.