Does A Will Override Community Property In South Africa
A question often received is whether a beneficiary nomination in a policy will take precedence over the last registered will if, for instance, the beneficiary is married out of community of property? Beneficiary nomination in life policies allows you to create liquidity in your deceased estate or provide your loved ones with access to capital after your death.
However, many people are unclear about how beneficiary nomination, such as that in a life insurance policy, works and how it relates a person’s last will.
Importantly, the proceeds of a domestic life policy are considered ‘deemed property’ – property that did not exist at the date of death, but which comes into existence as a result of that person’s death. In the case of life assurance policies, the proceeds are paid out on the event of death
This means that, should the client have referred to the distribution of benefits of a pension fund, it would be important to note that benefits due to beneficiaries are not assets in the estate nor are they considered deemed assets for estate duty purposes. As such, they are not regulated by the will of the deceased or the Administration of Estates Act.
The freedom of testation is limited by section 37C of the Pension Funds Act. Therefore, the board of trustees of the pension fund is not bound by the wishes of the deceased as expressed in the nomination form. For this specific reason, the death benefit (subject to the exceptions outlined in section 37C) is excluded from the estate of a deceased member and placed under the control of the retirement fund and its regulated taxes.
Even though the board of trustees is not bound by the last Will of the deceased or the nomination form, this does not mean that it is not important to complete such a nomination form. Should no dependents of the deceased member be located, the trustees will look to the nomination form as one of the factors that must be taken into consideration when allocating and distributing a death benefit.
Law Of Succesion In South Africa
The South African law of succession prescribes the rules which determine the devolution of a person’s estate after his death, and all matters incidental thereto. It identifies the beneficiaries who are entitled to succeed to the deceased’s estate, and the extent of the benefits they are to receive, and determines the different rights and duties that persons (for example, beneficiaries and creditors) may have in a deceased’s estate. It forms part of private law.
The manner in which assets are distributed depends on whether the deceased has left a valid will or other valid document containing testamentary provisions, such as an antenuptial contract. If the deceased has not left a valid will or valid document containing testamentary provisions, the deceased dies intestate; similarly, if 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 of preference among the heirs, as stipulated by the Intestate Succession Act, 1987. Until recently, the Act (and its common-law precursor) existed side by side with a statutorily-regulated customary-law regime of intestate succession, applied on a racial basis, but this was brought to an end when the Constitutional Court, in Bhe v Magistrate, Khayelitsha, made the Intestate Succession Act applicable to all.
Scope Of Succesion In South Africa
The capacity to have rights and duties is called legal subjectivity, which is terminated by death. The consequences of the termination of legal subjectivity are as follows:
- The subject is known as the deceased.
- If the deceased has a valid will, he or she is known as a testator or testatrix respectively.
- The deceased’s estate—all of the deceased’s assets and liabilities—is gathered together.
- The deceased’s debts and administration costs are paid.
- The remainder of the assets then pass to persons qualified to succeed him.
When a person dies, everything remaining of his assets (once debts, obligations and administrative costs have been reclaimed) passes by inheritance to those qualified to succeed him.
The law of succession is the totality of the legal rules which control the transfer of those assets of the deceased which are subject to distribution among beneficiaries, or those assets of another over which the deceased had the power of disposal.
If there is a valid will which sets out the wishes of the testator, the estate is administered in terms of the law of testate succession.A will is a unilateral declaration regarding how the estate is to be apportioned. A person may make also bequests in terms of an ante-nuptial contract. Both natural and juristic persons may be beneficiaries in terms of a will.
If there is no will, or if the will is invalid, the estate devolves in terms of the law of intestate succession.
Ground Rules For Succesion In South Africa
There are a few requirements (with exceptions) that must be fulfilled before the rules of succession can come into operation:
- The testator must have died.
- There must be a transfer of rights or duties with regard to the estate or the status of the deceased, depending on the nature of the succession rules (common law or customary law).
- At the time of dies cedit, the beneficiary has to be alive or have been conceived.
- The beneficiary must be competent to inherit. (According to the Dutch rule de bloedige hand neemt geen erf a person convicted of either the murder or culpable homicide of the testator is not eligible to inherit.)
