As the owner of a fixed property, a reader is making arrangements in respect of his will and wants to know what his options are in terms of the asset.
Valued at approximately R2-million, he queries whether he is forced by law to transfer the fixed property to his wife as the surviving spouse. He also wants to know how transfer duty and costs are calculated.
In accordance with the principle of freedom of testation in South Africa, the reader is entitled to bequeath the fixed property to whoever he may desire.
See the reader’s question here.
Contrary to what he appears to have heard, he is not obliged to bequeath his fixed property to his wife upon his death.
Of course, practically, the reader may wish to consider what his wife will do for accommodation should she not be in a position to make alternative arrangements upon his death.
This problem may be exacerbated in the instance of there being young or dependent children.
Based on an approximate value of R2-million and the property being sold, the transfer duty payable is R60 500.
The transfer duty is a tax and is adjusted from time to time. The exact amount payable will be based on the value of the property at the time of our reader’s death and by consulting the rate at that time.
Transfer duty is not payable if the property is transferred to an heir in accordance with the provisions of the reader’s will.
The reader questions whether someone other than an attorney could see to the transfer of the property but, even if this were possible, it would not be advisable.
The transfer of the property is effected by a conveyancing attorney, who will charge a fee according to a prescribed tariff.
On an estimated value of R2-million, the conveyancer’s fee will be approximately R25 000, excluding the Deeds Office levy and VAT.
The reader also questioned how soon after his death the transfer of the property is to be effected. This may be influenced by a number of factors and may depend on what our reader ultimately has in mind for it subsequent to his death.
Generally, however, the transfer of a property from an estate to an heir takes place as part of the administration of the deceased estate.
It is dependent on the period of time required to administer and wind up that particular estate, which often ranges between six and 18 months.
However, if the reader wants to sell the property rather than bequeath it, the sale could take fairly quickly subsequent to his death.
In this case, the proceeds of the sale will form part of the property of the deceased estate rather than the asset.
The reader should consider a number of further aspects in his estate planning.
There is no indication whether he is married in community of property, out of community of property or out of community of property with accrual.
In the event of him being married with the accrual system, his wife may have a claim against the estate based on the accrual or, indeed, own an undivided half share in the property should they be married in community of property.
If the reader bequeaths the fixed property to a third party, his wife may find herself in a position where she is forced to lodge a claim for maintenance against the estate.
This is in accordance with the Maintenance of Surviving Spouses Act, which may result in the property being sold to ensure that sufficient funds are available for the estate to settle her maintenance claim.
The reader should seriously consider taking advice from an attorney, accountant or financial planner to ensure his wishes are properly carried out and to consider the practical implications of such wishes being implemented upon his death.
Should the reader be unsure as to what his eventual wishes may be, it may be prudent to have an interim will drawn up to ensure that sufficient instructions are left upon his death to avoid a situation where intestate succession occurs.
He is then free to further consider his wishes and to make such changes to his will as and when required.
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