Newsletter 23 (Oct 2018)Dear Colleague
Hard to believe, but we are in the last quarter of 2018 already. If your New Year’s wish list hasn’t been completed yet, you will have to work on it hastily.
In the next edition, we will present the Estate Preservation Plan in association with Clientèle Life. This is a remarkable plan that protects the financial interest of the estate’s beneficiaries from the costs associated with the winding up of an estate, as well as providing financial security during the, sometime lengthy, administration process. Apart from the benefits to your clients, there are also great benefits to you as a financial advisor.
ESTATE PRESERVATION PLAN IN ASSOCIATION WITH CLIENTèLE LIFE
….. Read more in the upcoming edition!
THE LAW OF INTESTATE SUCCESSION
The South African law of succession prescribes the rules which determine the devolution of a person’s estate after his/her death and all matters incidental thereto. It identifies the beneficiaries who are entitled to succeed to the deceased’s estate, the extent of the benefits they are to receive and determines the different rights and duties that persons (i.e. beneficiaries and creditors) may have in a deceased’s estate.
If the deceased has not left a valid Will or valid document containing testamentary provisions, the deceased dies intestate. Where the deceased leaves a valid Will which does not dispose of all property, there is an intestacy as to the portion not disposed of. In the event of intestacy, the assets are distributed in a definite order or preference among the heirs as stipulated by the Intestate Succession Act 81 of 1987 as amended.
Intestate succession is based primarily on blood relationship. Illegitimacy will not affect the capacity of one blood relation to inherit the intestate estate of another blood relation.
An adopted child shall be deemed:
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to be a descendant of his/her adoptive parent or parents;
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not to be a descendant of his natural parent or parents, except in the case of a natural parent who is also the adoptive parent of that child or was, at the time of the adoption, married to the adoptive parent of the child.
If an adopted child is deemed to be a descendant of his/her adoptive parent, or is deemed not to be a descendant of his natural parent, the adoptive parent concerned shall be deemed to be an ancestor of the child, or shall be deemed not to be an ancestor of the child, as the case may be.
The following is an outline of how an intestate estate devolves:
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If the deceased is survived by a spouse or spouses, and has no living descendants, the spouse inherits the estate; if the deceased was a husband in a polygamous marriage the surviving spouses will inherit in equal shares.
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If the deceased is survived by a descendant(s), but not by a spouse, the descendant(s) will inherit the estate.
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Where there is a living spouse(s) and descendant(s), each spouse will inherit R250 000 or a child’s share, whichever is greater (this amount is fixed by the Minister of Justice from time to time). The children will get the balance of the estate, and if a child is predeceased and has descendants, that child’s portion will go to his/her descendants.
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If the deceased leaves no spouse or descendants, but both parents are alive, the parents shall inherit the estate in equal shares.
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If the deceased has no surviving spouse or dependents but has only one surviving parent, the parent inherits half the estate and the descendants of the deceased parent the other half. If there are no such descendants, the surviving parent shall inherit the estate.
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If the deceased is not survived by a spouse, descendant or parent but is survived by descendants of the deceased mother or father who are related to the deceased through the parents, one half of the estate will be divided equally amongst the mother’s descendants and one half amongst the father’s descendants.
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If the deceased is not survived by a spouse, descendant, parent or descendant of a parent, the other blood relations of the deceased who are related to him nearest in degree shall inherit the intestate estate in equal shares.
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Where there are no relatives, and the assets have not been claimed by a legitimate heir after 30 years, the estate is forfeited to the state.
Child’s share
A child’s share, in relation to the intestate estate of the deceased, shall be calculated by dividing the monetary value of the estate by a number equal to the number of children of the deceased who have either survived him/her or have died before him/her, but are survived by their descendants (plus one, if there is a surviving spouse).
How to calculate a child’s share
Example 1: Value of intestate estate is R550 000.
The deceased is survived by a spouse and 3 children.
A child’s share amounts to R137 500 (R550 000 divided by 4 (3 children plus spouse)).
The child’s share is less than R250 000. Therefore, the spouse will inherit R250 000 and each child will inherit R100 000,00. (R550 000 less R250 000 to the spouse, and the remainder is divided by 3).
Example 2: Value of intestate estate is R1 250 000.
The deceased is survived by a spouse and 3 children.
A child’s share amounts to R312 500 (R1 250 000 divided by 4 (3 children plus spouse)).
The child’s share is greater than R250 000. Therefore, the spouse and the 3 children will each will inherit R312 500.
Minors
If the deceased dies intestate and a minor inherits, such portion will be held by the Guardian’s Fund at the Master of the High Court until the child reaches majority at 18 years of age. The Guardian’s Fund only accepts cash inheritances, therefore, the executor could be forced to sell assets. Only in very extreme cases, will the Guardian’s Fund accept fixed property.
Marriage in Community of Property
Where Intestate Succession applies in a case of marriage in community of property, one half of the estate belongs to the surviving spouse and will not devolve according to the rules of intestate succession.
This explains the main concepts of the Law of Intestate Succession. The complete Act can be viewed online at
www.justice.gov.za/legislation/acts/1987-81.pdf.
Reference: Funeral Guide
A LEGACY OF FACE MASKS
Kari Hunt was an avid paper mache mask maker. She learned her craft from artist Doane Powell, who in 1948 literally wrote a book on the topic. Powell not only taught Kari to make her own masks, but also left her his own when he died in 1951. His masks focused on newsmakers of his day, including Adolf Hitler and Winston Churchill.
In 1952, Hunt made their faces famous by striking a deal to feature them on the television game show “Masquerade Party”. When she died in 1999, her daughter, Karen Schnitzspahn, inherited all the masks made by her mother and Powell. Because they were so precious to her mother, she approached Laura Mooney, a senior curator at the Nebraska Historical Society. It took the museum three years restoring the incredible masks – one nose, ear and mustache at a time. The exhibit opened to the public in 2017.
Until next time.
“The Legatus Times” Team
