select
|

Stay informed: Bequeathing property

When it comes to leaving fixed property to someone in your will, you may be creating unnecessary complications for those you intend to inherit as dealing with fixed properties held in your estate can easily be a problem.

This is a warning from David Knott of Private Client Trust, the fiduciary services division of Private Client Holdings, and a member of the Fiduciary Institute of South Africa. He says that you first need to 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 one half of all assets registered 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 50 percent share owner of any fixed property you may have bequeathed to a third party, a child or children for example.

“To complicate matters further, if you have bequeathed your half share to your minor children and the property is bonded, the property will probably end up having to be sold if there is insufficient monies to discharge the bond, as financial institutions are unlikely to agree to lend to minors.”

He says that any property bequeathed in terms of a will must devolve upon the beneficiary free of any mortgage bond, and testators should ensure that there is either bond liability insurance cover or assets held in the 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,” says Knott.

“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 if you are happy to leave it to the co-owners to squabble about. Likewise you may wish to direct under what circumstances 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.”

Knott says 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 the will in the meantime. If the property described in your will by its address has been sold, the bequest will lapse. It would be sufficient for the will to refer to your residential property unless of course you flit between houses for different seasons and then you should be more descriptive.

He says that 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. A skilled wills drafter can help – professional advice is needed as there may be protected workers living on the farm.”

Knott says there are many facets which need to be considered when drafting your will, and it’s usually wise to employ a professional to carry out this important service.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
    • 15 Feb 2018
      One positive consequence of the financial crash in 2008 was the rise in consumerism, especially in the property market, where buyers have steadily become more knowledgeable and more value conscious.
    • 15 Feb 2018
      While most homeowners will take the agent’s commission into consideration when they are trying to determine what the will get out from the sale of their property, many often forget to factor in the other costs involved in a home sale, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      The forecast for the national rental market in 2018 remains a mixed bag of good news and bad news. Although rentals are expected to rise slowly as the challenges of home affordability and tighter lending criteria tighten their grip, it’s a double-edged sword as the market also will come under increasing pressure from factors like declining disposable income levels.
    • 14 Feb 2018
      While you may not have intended to place your home on the market, what do you do if you receive an unexpected offer on your home? In areas where demand outweighs the current supply of homes available to buyers, it is not unheard of to have buyers make offers on homes that aren’t on the market, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      If you are looking to sell your home this year, Debbie Justus-Ferns, divisional manager of Renprop Residential Sales, says that there are five crucial things to do before the ‘for sale’ sign goes up.
    • 01 Feb 2018
      February is the month of love and to celebrate we will be posting about all the things we love this month. Follow the #MyPropertyLoves hashtag to keep up with our favourite things.
    • 01 Feb 2018
      After saving up and months of searching for the right home, applying for a bond and patiently waiting for the keys to the front door, it is finally time to cross the threshold and move into your new home. Now what?
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK