You are Here > Home > Financial planning > Bequeathing property in your will – how it can go wrong

Bequeathing property in your will – how it can go wrong

Nov 5, 2014

By David Knott of Private Client Trust, the fiduciary services division of Private Client Holdings, and a member of the Fiduciary Institute of South Africa.

WillWhen it comes to leaving fixed property to someone in your will, unless you have had professional assistance in the drafting of the will, you may be creating unnecessary complications for those you intend to inherit as problems dealing with fixed properties held in your estate can easily arise.

Firstly, you should consider how you are married, as this influences your capacity to distribute assets after your death.

If you are married in community of property, you own only half of all assets registered both in your name and that of your spouse – notwithstanding how the assets may be registered and when the assets were acquired. Your spouse therefore still remains a one half share owner of any fixed property you may have bequeathed to a third party (a child or children, for example). To complicate matters further, say you have bequeathed your half share to your minor children and the property is bonded, then if there is insufficient money to discharge the bond, the property will probably end up having to be sold as very few financial institutions if any, will agree to lend to minors.

(Any property bequeathed in terms of your will must devolve upon the beneficiary free of any mortgage bond, and you should ensure that there is either bond liability insurance cover or assets held in your estate which may be easily realised to discharge this liability.)

If you are married in terms of the accrual regime, the calculation to determine which spouse has a claim against the other to equalise the growth of the respective estates, only occurs at death. Your spouse may therefore have a substantial claim against your estate, necessitating the sale of assets you had not intended to be realised.

In any co-ownership situation, you may wish to consider whether your spouse should have occupation rights until her death or until some other specified event, or whether you’re happy to leave it to the co-owners to squabble about. Likewise, you may wish to direct the circumstances under which the possible sale of the fixed property or repairs, alterations and improvements can occur. Co-ownership of a fixed property does bring its own problems and you should think carefully before forcing this upon your spouse.

It is often unwise to describe the bequest of a fixed property by the address as you might move house and be remiss in not updating your will in the meantime. If the property described in your will by its address has been sold, the bequest will lapse. It is usually sufficient for the will to refer to your “residential property” unless of course you flit between houses for the different seasons, in which case you should be more descriptive.

Agricultural land may not be held in the name of more than one person in terms of the Subdivision of Agricultural Land Act. There has been talk about the repeal of this Act for many years but for the moment, if you wish your farm to devolve upon several beneficiaries you need to create a company and bequeath the farm to this entity. You really should turn to a skilled wills draftsman in this case. There may be further complications if there are protected workers living on the farm.

In conclusion, remember that there are many facets which need to be considered when drafting your will, so it’s best to seek help from a professional.

1 Comment

  1. I had to leave a comment, man do I have a hard time writing
    a blog. Im looking to kick start one on my website and I must say
    its challenging at all. I do admire people like yourself who are
    able to write about anything easily. Keep up the nice work!


Submit a Comment

Your email address will not be published. Required fields are marked *

Maya Fisher-French author of Money Questions Answered

Previous Articles

How to save on home loan insurance

When applying for a home loan, the bank will insist that you take out home loan insurance to cover the repayments in the event of death, disability, or retrenchment. Evelyn Doubell, Private Wealth Manager at NFB Wealth Management finds that it’s usually cheaper to...

Relief for struggling restaurants

Soft loans and payment holidays are available for restaurants still battling to survive the pandemic. At the beginning of May, my favourite local coffee shop closed its doors after 20 years of trading. My neighbourhood shopping centre, which caters to many “mom and...

Money and divorce

David Thomson, Senior Legal Adviser at Sanlam Trust, shares some practical tips about the financial side of divorce. The news of Bill and Melinda Gates filing for divorce after 27 years of marriage sent shockwaves through the philanthropic world. The couple is worth...

Lack of savings leaves SA vulnerable

A lack of emergency savings left households vulnerable to the economic shock of Covid-19. The last five years have been tough for South African consumers as salaries failed to keep up with inflation, unemployment grew, and debt levels increased. This left us extremely...

Beware: fraudsters are everywhere

Ramesh Ramdeen, Head of Fraud at FNB Wealth and Investments and Ashburton Investments outlines some key things to look out for to avoid becoming the victim of fraudsters. Investment and financial fraud is on the rise across the world. Each day thousands of people are...

Pros and cons of a pension-backed home loan

If you're looking at taking out a home loan, it may be worth enquiring whether you can use your pension fund as a guarantee for the loan. A pension fund is permitted by the Pension Funds Act to lend a member an amount of money for the purposes of purchasing or...

Inside a cryptocurrency scam

Social media networks are being used to lure people into a cryptocurrency scam. A sophisticated social media network is being used to con South Africans by claiming to generate huge returns through trading. The network is made up of 300 fake twitter accounts...

Can you bag a cheap deal on an overseas holiday?

Taking an overseas holiday is still possible but this can come at great risk to travellers’ pockets, finds Angelique Ruzicka. Differing social distancing rules and travel bans imposed by countries and airlines have done much to disrupt the global travel industry,...

Should your small business take a Covid loan?

The Banking Association South Africa recently announced that only R17.84bn of the R200bn Covid-19 Loan Guarantee Scheme for small businesses had been approved by banks. The scheme received 48 366 applications of which 27% were approved by the banks and taken up by...

Pin It on Pinterest

Share This