WHAT HAPPENS IF I DIE WITHOUT A WILL?

It is often emphasised that you should have a will drawn up by a professional and revise it regularly in order to facilitate the distribution of your net estate after your death. Many people still omit to do this. The problem is that, should a person die without leaving a valid will, in other words intestate, his/her estate will be administered and distributed in accordance with the regulations laid down in the Intestate Succession Act No 81 of 1987.

Below is a basic example of the effect an intestate death will have on the distribution of the deceased’s estate. Should the composition of the beneficiaries of the deceased be more complex, the administration of the estate in terms of the Intestate Succession Act will also become more complicated.

Let us assume that person A dies and the net value of his estate is R1.8 million. He is survived by his wife (B) and 2 children, of which one is of age and the other is a minor.

Scenario 1:

A and B are married out of community of property.

B inherits R125 000 or a child’s portion, whichever is the greatest.

A child’s portion is calculated by dividing the total value of the estate by the spouse and number of children, in other words R1.8 million/3 = R600 000.

The spouse and children therefore inherit R600 000 each.

The cash inheritance of the minor will be paid to the Master’s Guardian’s Fund, as there is no will which specifies that the minor heir’s inheritance should be placed in e.g. a Testamentary Trust (a trust which is created in a will), in which case the funds will be administered by the nominated Trustee on behalf of the minor until he/she becomes of age or reaches any other age as per the will.

Scenario 2:

A and B are married in community of property.

B inherits 50% of the estate (R900 000) in terms of the marriage in community of property.

B also inherits R125 000 or a child’s portion, whichever is the greatest, with regard to the other half of the estate.

A child’s portion is calculated by dividing half of the total value of the estate by the spouse and number of children, in other words R900 000/3 = R300 000.

The spouse inherits R1.2 million and the children R300 000 each.

The cash inheritance of the minor will be paid to the Master’s Guardian’s Fund, as there is no will which specifies that the minor heir’s inheritance should be placed in e.g. a Testamentary Trust (a trust which is created in a will), in which case the funds will be administered by the nominated Trustee on behalf of the minor until he/she becomes of age or reaches any other age as per the will.

Conclusion
It is clear from the above basic scenarios that dying intestate may result in impractical division of assets and may place the spouse in a financial dilemma even to the extent that she may have to obtain a mortgage bond against an immovable property to raise funds OR the assets in the estate may have to be sold.

In case of death without a valid will there is also no appointment of an Executor, in which case the surviving spouse has to accept the appointment as Executor. However, the Master will not appoint the spouse unless he/she is assisted by a professional who administers estate in the usual course of business. Apart from coping with the stress of losing a loved one, the surviving spouse will also have to find and then appoint an agent to administer the estate on her behalf.

It is therefore prudent and advisable for every single person over the age of 18 who has assets in their name to have a will drafted to avoid:

  • Distribution of the net estate in terms of the Intestate Succession Act, which may not give effect to the real wishes of the Testator / Testatrix.
  • Payment of minors’ inheritance to the Guardian Fund, in which case the process of obtaining funds for maintenance, school fees, etc. for the minor may become a nightmare.
  • Possible sale of estate assets if the spouse is left without the necessary funds to take care of the children.
  • The inconvenience of a surviving spouse / heir having to search for a trusted agent to administer the estate on his/her behalf.
Contact us for professional advice and the free drafting of your will today.


CMV Group of Companies

Tel : 012 991 4400
Fax : 012 991 3001
Physical: 17 Midas Avenue, Olympus, Pretoria, 0081
E-mail: info@cmv.co.za

Copyright © Website | Powered by SucceedGroup