Estate Administration: Inheritance & Wills In South Africa
South Africa has an inclusive justice system. This can be seen from its acknowledgment of rights for foreigners and people in customary marriages.
With the interplay between different laws and stipulations, estate planning and administration may seem a daunting task. Fortunately, writing a Will and the inheritance process do not have to fill you with dread.
Here is our guide to understanding estate administration, inheritance, and Wills in South Africa.
What Is Estate Administration
An estate is the total of money, assets, and property owned by an individual, especially at death.
Estate administration is the process of:
- managing the estate,
- paying any taxes or debts due on the estate, and
- distributing the property and assets to the heirs and beneficiaries.
Estate administration ensures the deceased’s final wishes are carried out correctly. However, it’s important to note that it is a highly technical process.
Each individual’s estate and circumstances differ. Let’s draw a comparison.
A 65-year-old parent with five dependents, two businesses, numerous properties, foreign assets, and a large investment portfolio
A 33-year-old young professional with life cover, a spouse, no property, and a trust.
Both individuals have different family situations and are in different life stages. Yet, both would benefit from professional expertise to help them plan out their estates in the most tax-efficient and timely manner.
Avoid the pitfalls
The estate administration process is littered with pitfalls and red tape. The estate needs to be dealt with properly in order to give your family peace of mind after you’re gone.
The greatest tool to protect your final wishes is the Will. Drafting a valid Will simplifies the entire estate administration process by setting out your intentions in writing.
Drafting, Amending, And Revoking Wills
Most people in South Africa can draft their own Will. Drawing up your own valid Will requires you to have two people sign as witnesses (read more about the Will-making process here).
It is a simple process if you have a simple estate. However, taxes and know-how of the law are useful, especially if you have a large family, several assets, or policy payouts to manage.
At this point, it is always best to consult your financial advisor who will be able to help you with your financial needs. In this way, the process is smoother when it comes to dividing your assets.
As your life changes, so will your financial circumstances. This is why it’s important to regularly update your Will in the face of new life events like the birth of a child or purchase of a business.
Amending A Will
You can amend your current Will through a codicil. This is also known as an update to the Will.
All changes must comply with the requirements of a valid Will. Fortunately, the process does not require the two original witnesses to sign the Will again.
Revoking A Will
Asides from amending your Will, you can also completely revoke it. You can create a new one. The latest Will must state that the previous one has been revoked, or the old Will has been destroyed.
Revoking and/or destroying previous versions prevents future confusion and potential feuds between your beneficiaries and heirs. It helps all interested parties and loved ones stay on the same page.
Inheritance Law In South Africa
Inheritance law applies to South Africans who own property in the country. The inheritance legislation generally respects the wishes of the deceased.
However, there is one exception to this law. If the spouse is left out of the Will, he or she can petition to claim a part of the estate to support themselves. This is called the Maintenance of Surviving Spouse Act.
Grant Of Probate
A grant of probate is a document that affords a person the legal authority to act as executor. This executor can then administer the estate on behalf of the deceased.
After the subject’s passing, the family has two weeks to notify the Master of the High Court. This begins the process of settling the estate, including officially recognising the executor.
Within the Will, the deceased makes known the executor of their estate. This person will collect the deceased assets, pay any debts and estate taxes, and distribute the estate among beneficiaries.
Because of the sensitivity around death and finances, many people prefer to appoint estate administrators with both an excellent knowledge of the estate planning environment and a good relationship with the family.
Inheritance Tax In South Africa
South African inheritance tax (estate duty) applies to all estates that are valued below and above a certain amount. These estates may be subjected to capital gains and donations tax too.
- For an estate under R30 million, the estate duty is 20% of the estate’s dutiable amount.
- For an estate over R30 million, the estate duty is 25% of the estate’s dutiable amount.
Feel free to get in touch if you need help with navigating estate duty taxes and the small print of estate transfer.
Maysure Financial Services Estate Administration
Estate administration requires a professional and personal perspective. At Maysure Financial Services, our services are tailored to your circumstances.
Our offerings are inspired by your life and we do all we can to help you achieve financial freedom in this lifetime and for your family in the next.
We offer estate administration services that are fully committed to your needs. At all times, we provide you with the best support possible.
If you’re not sure where to turn, contact us today with your estate administration queries.
+27 11 839 2302
Maysure Financial Services is a registered financial services provider. FSP 15173