It’s an uncomfortable conversation for most people, but a necessary one given that no one has yet discovered a fountain of youth and immortality. Although we don’t like to think of our loved ones passing away; we do need to think of our loved ones and plan for them when we’ve passed away.
What happens when someone passes away without a will? Who inherits when there is no will? According to South African inheritance law, the rules of intestate succession apply. Let’s take a look at what this means.
Inheritance Law In South Africa
What happens when someone dies without a will?
This is not an ideal situation, but it does happen. Either because the individual did not draft a will, or their will cannot be found. In this case, the Master of the High Court would need to appoint an executor. The executor is tasked with finding the will, if there is one to be found. If a will is not discovered with the deceased’s personal papers, the executor is obliged to make inquiries with their lawyer, accountant, bank or insurance provider. If a will cannot be found, the deceased’s estate must then be administered as if no will exists, even if the relatives believe there is one.
- If a person dies without a will (or if their will is found to be invalid) their estate must be wound up according to the rules contained in the Intestate Succession Act 81 of 1987.
- These rules only apply if the deceased was domiciled in South Africa at the time of death. If the country of domicile was not South Africa at the time of death, the laws of the other country will apply.
Who inherits when there is no will in South Africa?
Here’s what happens when a person dies without a valid will:
- If the person was married in community of property, one half of their estate belongs automatically to their spouse and the rules of intestate succession will not apply to this portion of the estate.
- This means that the surviving spouse inherits 50% of the estate, and the remainder will be distributed according to the rules of intestate succession.
What happens to minor children if a person dies without a will?
- The surviving parent will be the legal guardian of minor children, as parents automatically hold joint guardianship over their children.
- However, if both parents die at the same time or the other parent passed away previously, it will be for the state to appoint a guardian for the children.
Rules of intestate succession
These are the rules that apply when a person dies without a will. In terms of the Intestate Succession Act of 1987, closest relatives will inherit from the deceased in a predetermined order and at prescribed proportions. The spouse and children will always be first in line, but if the deceased did not have a spouse or children, then extended family such as parents, siblings, nephews, nieces, aunts and uncles will be next in line to inherit. It is important to note that intestate succession only applies for blood relatives (with the exception of adopted children and the surviving spouse) and does not cater to situations where people are cohabiting without marriage.
According to South African inheritance law, intestate succession works like this:
Where there is a spouse but no children:
- The spouse will inherit the entire estate, where they are able to meet the definition of ‘spouse’ to qualify for an inheritance.
- A spouse is any party to a valid marriage in terms of the Marriage Act 25 of 1961 (a civil marriage) or a customary marriage in terms of section 2 of the Recognition of Customary Marriages Act 120 of 1998.
Where there are children, but no spouse:
- The children will inherit the deceased’s estate in equal proportions.
- If any of the deceased’s children have already passed on, their children (the deceased’s grandchildren) then stand to inherit their parents’ share.
Where there is a surviving spouse and children:
- The spouse will inherit either a child’s portion or a predetermined amount (set by the Minister of Justice at R250 000 currently) – whichever amount is greater.
- The child’s share is calculated by dividing the estate by the number of remaining children (including deceased children with descendants) as well as the spouse (or spouses, in the case of customary marriages).
- The spouse will, therefore, inherit the greater of either R250 000 or the child’s share, and children will inherit equally from the residue of the estate. Once again, if one of the deceased’s children passed before, their children will inherit their parent’s share.
Important things to note about intestate succession and minor children:
- Any assets inherited by minor children will be administered by the Guardian’s Fund which is run by the Master of the High Court. The Guardian Fund will decide how these assets will be dealt with and administered, which can lead to delays and complications for the minor children involved.
What happens to retirement funds when a person dies without a will?
- This depends on the type of retirement funds that the individual has. With a guaranteed annuity there is no capital to distribute after passing, while capital remaining in a living annuity will be distributed with heirs.
- The distribution of retirement fund interests is at the discretion of the trustees of the fund, and in making this decision they will consider people nominated on the beneficiary form as well as financial dependents.
- If there are no nominated beneficiaries or financial dependents, the retirement funds will form part of the deceased’s estate and will be distributed according to the rules of intestate succession.
Cohabiting couples: what’s the deal when one partner dies without a will?
- For the purposes of inheritance law in South Africa, cohabitation is not considered to be a legally binding relationship, and as such there is no legal status to such union.
- This is a sad reality, whether or not the couple has children together and no matter how long they have been together, such a relationship has no legal standing in South Africa.
The importance of drafting a will: avoiding intestate succession
It’s strongly recommended that you have a will drafted if you want to avoid having the rules of intestate succession applied to your estate after your death. Most banks offer this as a reasonably priced value-added service which means there is no excuse not to plan for the inevitable. Yes, you can do it yourself, but there are requirements that need to be met in order to ensure the validity of your will.
Having a will in place is highly advisable where:
- You are married or cohabiting
- You have children or have adopted children
- You have children with special needs
- You own a business or shares in a business
- You are divorced
- You own foreign assets
FinGlobal: cross-border financial service specialists
If you’re a South African living abroad, FinGlobal can help where you have:
- Received an inheritance from someone with assets in South Africa
- Assets left in South Africa (fixed property, shares, pensions or policies) that you wish to ensure will be dealt with according to your instructions on your passing.
Both instances require careful planning in order to proceed smoothly, so get in touch today to see how we can help.