WHAT ARE THE GENERAL PRINCIPLES THAT APPLY IF I DIE WITHOUT A WILL?
In terms of the Act the relatives closest to the deceased will inherit in a predetermined order and proportion. This is usually the spouse or children of the deceased.
Section 1 (1) of the Act sets out how the estate will be distributed. It states that if a person dies intestate (either wholly or in part) and is survived only by a spouse, the spouse will inherit the intestate estate. If the deceased is survived only by descendants and no spouse, the descendants (being the children of the deceased) will inherit the estate in equal shares.
When a deceased is survived by both a spouse and descendants, the spouse of the deceased will inherit the greater of R250 000 or a child’s share, which is determined by dividing the intestate estate by the number of surviving children of the deceased plus the number of surviving spouses.
For example, if the estate of the deceased is valued at R2 000 000 and the deceased is survived by a spouse and three children, a child’s share amounts to R2 000 000 divided by four, thus R500 000. Therefore, the spouse and the children will inherit R500 000 each. However, where the child’s share amounts to less than R250 000, the surviving spouse will inherit R250 000 and the remainder of the estate will be divided between the children of the deceased in equal shares.
WHAT HAPPENS IF ONE OF MY HEIRS IS A MINOR?
A minor is a person below the age of 18. When you die intestate and one of your children is your heir and such child is younger than 18, the minor child’s cash inheritance will be held by the Guardians Fund at the Master of the High Court, which is a government institution. The Guardian’s Fund will administer these funds until the child reaches majority (the age of 18).
When the inheritance of a minor is paid into the Guardian’s Fund, the guardian of the minor will have to make applications to the Guardian’s Fund during the course of the period that the heir is still a minor to obtain funds for specific purposes such as education, clothing, medical and other motivated needs. This application process can be very cumbersome.
An heir can claim the capital of his/her inheritance once he/she reaches the age of 18. If the heir does not claim the capital upon reaching the age of 18 and after a lapse of 30 years from the date of the funds becoming claimable, the money is forfeited to the state.
If fixed property forms part of the minor’s inheritance and is registered in his/her name, it will not be possible for the guardian of the minor to sell such property without the approval of the Master or by obtaining a High Court order (depending on the value of the property).
WHAT CAN I DO TO PROTECT MY FAMILY?
Having a will and testament with a testamentary trust for minors makes it significantly easier and faster to access funds for the minor child.
Testamentary trusts ensure that adequate maintenance is paid to the minor, whilst protecting the assets due to the minor in future. The funds can be invested at competitive rates and you can determine the age at which you want the funds to pay out to your heir. Where a professional trustee is appointed, the testamentary trust is in particular a good way of ensuring that a child’s inheritance is protected against the impulses of the child’s guardian or his/her partner, while still providing maintenance and protection of assets for the child.
As a starting point in ensuring that your beneficiaries will inherit from you as intended, we invite you to make use of our Smart Questionnaire as part of our firm’s Tech Enabled Law by –
- Click on the link – https://sstlaw.n-abler.biz/Home/Selection; or
- Visit the Tech Enabled Law page on our website at sstlaw.co.za
Should you be uncertain about your current will and whether your minor beneficiaries are sufficiently protected, please feel free to contact our office to consult with one of our experienced fiduciary specialists.
LLB; LLM (Estate Planning)
Fiduciary and Commercial Department
Phone: 012 361 9823