We continue this month with a discussion that builds on two topics that we covered over the last few months – who is a spouse, and what are the requirements for a valid will?
The concept of “freedom of testation” is an important cornerstone in our law – the ability to make our wills and to bequeath our assets however we want. We place high value on a testator’s so-called last wishes, his estate will be dissolved in the way he intended, and that’s pretty much that.
It happens from time to time that a will is challenged in court long after someone has passed away, but in reality it’s neither cheap nor easy to have the bequests of a will amended after the testator died. Unless there is a glaring problem with the will (such as a provision that contradicts our constitution or the human rights of others) a challenge is unlikely to succeed.
Maintenance of surviving spouses
Sometimes a will doesn’t blatantly contradict our law or good morals, but is still problematic for the testator’s survivors. For instance, what happens in the case where Uncle Jack accidentally leaves Aunt Joey an inheritance that will be insufficient to cover her living costs over the course of her lifetime, and she was previously very dependent on his financial support?
Or, where Uncle Jack leaves Aunt Joey out of his will entirely? As unfathomable as it may sound, this happens. It appears to be more prevalent in second marriages, but spouses are passed over for third parties all the time.
Enter: the Maintenance of Surviving Spouses Act. This is the legislation that gives a spouse legal recourse if he/she has been disinherited, or negatively affected by the wishes of the testator. Essentially, this ensures that the surviving spouse is not left destitute after the death of his/her spouse, accidentally or otherwise.
Who can claim?
The emphasis is on the term “surviving spouse”. The Act applies to all marriages and unions under the following regimes:
- Marriage Act
- Civil Union Act
- Customary marriages in terms of the Recognition of Customary Marriages Act
- Muslim marriages
- Same-sex couples in a long-term relationship (note however, that it does not apply opposite-sex couples in a long-term relationship)[i].
The marriage must be dissolved by death of one of the partners after 1990, which is the date that the Act came into effect.
What can be claimed?
Aunt Joey in our example may have a claim against Uncle Jack’s estate for the provision of her “reasonable maintenance needs”, until she dies or remarries. She can claim for only the portion that is required in addition to her own means and earnings. If she requires R30 000 per month, and earns a salary of R20 000, she can theoretically claim R10 000 against the estate. If she inherited other financial benefits, investments or property, in addition to the maintenance set in the will, she will be forced to take the difference in income from these, before a claim against the estate will be entertained.
What is reasonable maintenance needs?
Reasonable is a word that is very difficult to define, because it varies so considerably from one household to the next. In terms of the Act, a whole range of factors may be taken into account, of which the following are the most important:
- What is the available amount for distribution? In other words, after all estate taxes and fees have been paid, are there any funds left to pay to Aunt Joey?
- What is the current and expected earning capacity of the surviving spouse? If Aunt Joey was a home executive her whole life, it’s unlikely that she will find a job that will pay her sufficiently. But if Aunt Joey is a skilled professional who willingly gave up her job five years ago to take early retirement, it is highly probable that she will be expected to go back into the labour force to make her own ends meet.
- What was the standard of living before the deceased passed away? The surviving spouse will likely want to be in a position of similar circumstances and comfort. Aunt Joey can’t expect to start living a millionaire’s lifestyle if they barely lived above the breadline previously. But the other way around would also not be fair on her.
The logistics
When it comes to the money business, a maintenance claim ranks high on the list of priorities for the estate. It has equal importance to the claim for maintenance for a dependent child. Simply put, if the claim succeeds, the estate will have to pay it ahead of other creditors and beneficiaries. If there is both a maintenance claim for the spouse and a maintenance claim for a dependent child, but not enough money in the estate to fund both, each of the two claims will be reduced proportionately.
At the end of the day (or perhaps at the start of it!), the executor of the deceased’s estate has the power to negotiate with the surviving spouse. It’s possible for the executor to facilitate agreements between the spouse and other legatees/beneficiaries where the spouse waives the maintenance claim in exchange for other benefits from the estate.
Sometimes, however, there is no resolution after discussions with the executor and the spouse has no option but to approach the court. In this case the spouse will require the services of a Certified Financial Planner (CFP) or an actuary to put the claim together. Attempting it yourself, or beefing up your budget by inventing unnecessary expenses won’t get you anywhere, except in the naughty corner. You run the risk that the court may disregard the claim entirely, and it won’t easily accept a reapplication. Also remember that, even after the spouse has done everything correctly and honestly, the claim against the estate may not succeed. Weigh up the legal costs and emotional distress of the process against the outcome that you are hoping to achieve in court. It’s not always worth it.
Regardless of where you are in your life, if you are in a position where your expenses outweigh your income, or you generally feel overwhelmed by the prospect of drawing up a budget and reshuffling a few things, talk to us. Foundation now has a range of tax and accounting services aimed at simplifying your life.
[i] Volks No v Robinson and Others (CCT12/04) [2005] ZACC 2; 2005 (5) BCLR 446 (CC)
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