Not all property passes through probate when a person dies. This only happens to solely-owned property. There four other major types of property which are not passed on through this method.
While the subject of death is not usually something we like to focus on, it is however something that needs to be planned to to make things less difficult for our loved ones.
If you don’t have a will when you die, the process of executing your estate will be delayed and your loved ones will be faced with additional expenses and frustration.
In such a case, an administrator will be appointed to administer your estate according to the laws of intestate succession. This will likely result in the estate not being divided as you intended it to be.
The marital regime with your spouse should be taken into consideration when drafting your will. For instance, being married in community of property means that only half of the assets registered in yours and your spouse's name are yours.
This would make your spouse a share owner of half of any property you would want to give to a third party.
Upon death, if you are married in the accrual regime your spouse could have a substantial claim against your estate in order to equalise the growth that occurred in both estates. This could result in an asset being sold which you intended to give to a third party.
Co-ownership situations can be tricky as are many of the other aspects of a will and so, it is always recommended to utilise the skills of someone qualified during the drafting of your process.
When preparing your will it is important to also prepare any necessary information relating to your immovable property. You will need to state where the title deeds are kept, and any outstanding bonds and insurance policies need to be recorded.
Rates and taxes receipts should be up-to-date and filed. The details relating to leases on any property of yours should be recorded. It should also be stated who collects your rent, compiles your yearly accounts and where the water, lights and refuse deposit receipts are kept.
Surviving joint bond holders benefit when you have a will to assist with the administering of your estate. Joint bond holders have to apply for an endorsement from their bank in order for the bond to be transferred into their name.
It should take 10 to 14 working days for the process to be completed once the required documentation is provided. However, the bond will take much longer to be transferred when there isn’t a will in place because the estate has to first be administered and wound up before the transfer can take place.
It is worth noting that any property given to heirs is not penalised by transfer duty, however they will need to pay for conveyancing fees.
As such the heirs can choose to distribute the property amongst themselves as they see fit, but if they sell the property to an outsider, a transfer duty will be payable. In most cases the buyer would pay this cost.
Ultimately, having a will is essential and could save your loved ones a lot of grief in the future, as well as, mean that the estate will go to the right people without extra costs.
This is why you should have your attorney draw up your will and keep it secure for you.
How are the five major types of estate property distributed upon death?
If the property is owned as joint tenants with right of survivorship(JTWROS) then it passes directly to the surviving joint owner(s) when an owner dies.
The interests in the property of the owner who died then pass automatically to those surviving. The interests of the deceased owner cannot be inherited by heirs and so such a property is not probate and so doesn’t form part of the will.
If the property is held in a living trust, then it will pass directly to the beneficiaries that were designated under the trust instrument. As this form of property doesn’t form part of your probate estate, it isn’t controlled by your will.
As part of your probate estate, any solely-owned property will be passed on to beneficiaries designated under a will. If no will is in place, then your estate will be divided under the laws of intestacy.
Any of the death benefits that are payable under an annuity or life insurance policy will pass directly to the beneficiaries designated under the annuity contract or insurance policy.
If the death benefits are payable under a retirement plan (including IRAs) then they will pass directly to the beneficiaries designated under the retirement plan.
At Van Deventer and Van Deventer Incorporated, we will guide you or your loved ones through the process, from reporting the estate to the Master of the High Court, through to exacting procedures prescribed by law, to the final distribution of the estate to the beneficiaries.
And we will do so in an efficient, yet empathic manner.
Contact us to assist you in these complex and demanding matters, so that you have the benefit of our client-focused expertise when you need it the most.
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