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Scenario 1: You’ve got an extended family with children from several marriages

Liz and Jack married out of community of property in 2001. They had both been widowed before and were retired when they married. Liz had a son, Bill, from her previous marriage and Jack had a daughter, Sarah. Both children were adults, married and living with their own partners and children. Their respective children and families were not close and only saw each other once or twice a year. Liz and Jack enjoyed happy ‘golden years’ together.

The couple lived in a home owned by Jack worth about R10 million, which he had owned for many years. Liz’s assets consisted of a small savings account. Jack had savings and investments. In 2018, their neighbours – having not seen Liz and Jack for a number of days – went to the house to look for them. Eventually security was called and entry obtained. Tragically, both Liz and Jack were found to have passed away.

Jack’s daughter, Sarah, was appointed as his executor, as nominated by Jack in his last will and testament. Liz died intestate (without a will). After a long delay, an attorney was appointed as her executor. In the meantime Sarah had been maintaining the home and paying the utility bills. It was a very uncomfortable situation for Liz’s son Bill, who was told to clear her things out of the house.

In terms of Jack’s will, if he and his wife Liz passed away at the same time, his estate went to his daughter and her children. If, however, he died first, then he left his estate, including the house, to Liz. Upon the insistence of Liz’s executor, medical examinations were carried out post mortem on both of them. It was evident that Jack had passed away before Liz. This meant that legally Liz had inherited Jack’s estate before she passed away. This then meant that everything was passed on to Liz’s son Bill. Jack’s daughter Sarah contested the matter in court but lost, with heavy legal costs.

How could a will have helped?

If we look at Jack’s will, he could have bequeathed his entire estate to Liz on condition that the house should pass to his daughter Sarah when Liz passed away. This is what is legally referred to as a fideicommissum. It’s also important to note that Liz was dependent on Jack for almost all her living expenses. This means that if Jack hadn’t left her the home and she had survived the tragedy, she may have had a substantial claim in terms of the Maintenance of Surviving Spouses’ Act, which could have included the home or at least required that it be sold and turned to cash.

Scenario 2: You’re in a customary marriage with children from a previous marriage

Sivu, an accountant, married Thabo. Thabo is a sales representative, divorced with three children. The couple celebrated their marriage in traditional customary fashion with their respective families in KwaZulu-Natal in 1997. She was not married before. They did not enter into a ‘pre-nup’ (antenuptial contract) before getting married.

Customary marriages are fully recognised under South African law. Accordingly, the parties were married in community of property (in community of profit and loss) as that is the ‘default’ under the law unless you specify something different. Both being busy professionals, Sivu and Thabo never got around to ‘registering’ their marriage as required by section 4(3)(b) of the Recognition of Customary Marriages Act of 1998. Fortunately, the Minister of Home Affairs recently issued a Notice extending the deadline to 30 June 2024.

Since they got married, Sivu and Thabo have been blessed with two children of their own. Sivu approached her financial planner for some estate planning advice, and to have a last will and testament drawn up. She wanted to know if she could have her own will, or if it needed to be a joint will with Thabo. Her planner advised her that she can certainly execute her own will. However, she and Thabo have a joint estate in which they basically share whatever they own in undivided half shares. Sivu’s planner told her that the money she had inherited from her father was excluded from the joint estate because he had been wise enough to exclude it from the effect of Sivu’s marriage.

Sivu is worried about her two children, as Thabo’s much older children are always around their home and don’t seem to have sustainable careers and often borrow money. Sivu has a successful career, she’s built up substantial savings and she owns an apartment which she rents out. Thabo likes to ‘splash cash’ and she has no real idea what savings he has.

Sivu’s planner advised her that if she were to pass away without a will, half of the joint estate would automatically go to Thabo (her husband), and the rest would be divided up equally between all five children and Thabo. Sivu does not like the sound of that. So, she executes her will with her financial planner by stipulating that her children alone will inherit her half share. As neither Thabo nor his children are dependent on Sivu, Sivu’s financial planner does not envisage that they would have any further claim against her estate.

Sivu feels far more relaxed once her will has been signed and safely stored with Sanlam Trust.

“Sivu’s planner advised her that if she were to pass away without a will, half of the joint estate would automatically go to Thabo (her husband), and the rest would be divided up equally between all five children and Thabo. Sivu does not like the sound of that.”

Scenario 3: You’re a single parent with small children

Mary lives with her two young children. She previously lived with their father George, until they separated 3 years ago. They were never married. George is a devoted father who visits the children by arrangement with Mary, and runs a successful import/export business. He married another woman, Louise, last year and plans to have more children with her in the future. He contributes money towards the children, but there is no written agreement between Mary and George that regulates this.

Mary is very worried about what would happen to her children if she passed away. As the biological father, George will be the sole guardian of the children and he would have to take care of them. Mary is concerned that when he starts a new family with his new wife, her children may not be cared for adequately. She does not see eye to eye with Louise on just about anything. Unlike Mary, Louise doesn’t work. Worse still, what if George were also to pass away prematurely? Her children would be devastated and alone.

Mary needs advice. So her financial planner suggests that she executes a last will and testament. In it, she should bequeath her estate to her children, but because her children are young, her estate should be held in a testamentary trust to be administered by a professional trustee (such as Sanlam Trust). The trustees can be given the power to terminate the trust at a certain age or event. This would be when the beneficiaries (Mary’s children) turn 18 or, better still, a few years later than that when they are mature enough to manage the money and assets Mary will have left them. Until that time, the trustees would utilise the income (and capital where necessary) to contribute towards the support of the children.

Mary should also nominate a guardian to take care of her minor children in the event that she and George happen to pass away before they have turned 18. A close family member or friend should be approached to discuss whether they would be prepared to take on that responsibility.

She should also consult an attorney to have an agreement drawn up regulating the maintenance that George pays, for example the payment of school fees, medical aid, all access and visiting hours. This agreement must be made binding on their respective deceased estates.

Should she ever remarry and have more children, Mary must review her will to make sure her older children are still cared for adequately (within the trust) and, at the same time, consider what bequests she envisages for her new family. All of these actions will provide Mary with peace of mind, safe in the knowledge that no matter what happens to her, her children will be provided for in a secure manner.

Please consult with a financial planner before you take any action regarding your policies. Sanlam is a Licensed Financial Services Provider.

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