Without a will: What happens to your home when you die?

According to the Transaction Support Centre (TSC), which assists lower-income clients with property-related issues, too many South Africans have not drafted formal, legal wills, unaware that this could leave their dependents and families in dire straits should they die.

The TSC and its affiliates, research consultancy 71point4, the Centre for Affordable Housing Finance in Africa (CAHF), and conveyancing firm STBB, report that while millions of South Africans prepare for death by buying funeral policies*, only around 30%** have wills. When a property owner dies without a will, they can unwittingly leave behind significant cost and anxiety for their families.

Many low-income South Africans are beneficiaries of the government subsidised housing programme. While these houses are given away for free, they are valuable. In urban areas they typically trade for over R200 000. Owners will therefore want to be sure that their asset is passed on to their heirs without conflict, and that their heirs get the full benefit of the property’s value.

“Deceased estates can take months to wind up and incur legal costs many families may not be prepared for. When no will is in place, the time and costs involved could increase significantly, and more worryingly it could mean that the intended heir to the deceased’s estate may not be the one who ultimately inherits it,” says Lisa Hutsebaut, conveyancer for the TSC.

What happens when no will is in place?

Hutsebaut explains that where there is no will in place, the laws of intestate succession apply. These laws stipulate how a deceased estate is to be distributed between surviving heirs.

Without a will, the Department of Justice Master’s Office, which supervises the administration of deceased estates, will appoint an executor to settle any of the deceased’s liabilities and distribute the balance of the estate in terms of the Intestate Succession Act. In terms of this, the spouse or registered domestic partner inherits the largest share of the estate – usually the property – with some allocation to the children, siblings, parents and other blood relatives. Children may inherit the property after the death of the surviving spouse, but this does not always happen.

People reporting an estate to the Master’s Office are required to complete and sign a Next of Kin or J192 Affidavit providing the names and ID numbers of relatives who might have a claim on the estate. Unfortunately, it appears that this data is not always independently verified by the Master by cross-checking with the Department of Home Affairs despite integration with Home Affairs, which maintains official records of this data. Thus, the Master’s Office relies on the integrity of the signatory, leaving the process open to fraud.

When lack of a will hampers a home transfer

In one case which the TSC assisted with, the client Lungisile* approached the TSC for assistance in transferring her mother’s property into her name. TSC discovered that she was one of three siblings, which meant her siblings would have to renounce or donate their share of the property. One was willing to do so, but the older sibling, a brother, was deceased. In terms of the laws of intestate succession, the deceased brother’s share passes to his child. However, because the child was only nine years old, and a minor, he could not renounce or donate his share. She agreed to transfer the property into hers and her nephew’s name. But this has implications for Lungisile’s ability to sell or borrow against the property until the child turns 18.

When to get a will

“Having a will ensures that the intended heir retains their property, and avoids conflict and additional costs for the family,” says Hutsebaut. “Now is the time for people to have the difficult conversation – sit down with their families and say when I die, this is what I want to happen to the house, and then to formalise their wishes with a will, to ensure their families have some protection.”

How to get a will

Wills are typically drafted by estate attorneys, financial advisors, or with the assistance of your bank.

 

Source: MoneyWeb – Transaction Support Centre