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

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

Johannesburg, 13 September21: National Wills Week takes place between 13 – 17 September – a time dedicated to increasing awareness of the importance of having a valid will. 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. Worse – it could mean their children or relatives could lose their home.

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

 “Anyone over the age of 16 who is of sound mind can have a will drafted. As soon as a person has assets – such as property – and/or a child, it becomes important to draft a will,” says Hutsebaut.

“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.

During National Wills Week, which is hosted by the Law Society of South Africa, participating legal practitioners will offer their services to draft wills for free. For information on participating practitioners, visit the Transaction Support Centre (TSC) Facebook page https://www.facebook.com/TransactionSupportCentre

sources:

*https://www.simply.co.za/blog/death-and-dignity

https://mayaonmoney.co.za/2020/01/the-real-cost-of-death/

**https://www.news24.com/fin24/money/wills-and-trusts/over-70-of-working-south-africans-dont-have-a-will-heres-how-to-get-yours-for-free-20190915

https://mg.co.za/special-reports/2020-05-29-wills-estate-administration-and-succession-planning-webinar/#:~:text=Only%2030%25%20of%20South%20Africans,the%20importance%20of%20a%20Will

 About the Transaction Support Centre

The Transaction Support Centre (TSC) exists to help current and prospective homeowners regularise their ownership, unlock the value of their housing assets and improve the performance of local property markets. The TSC currently operates in Khayelitsha through a remote office, providing advice and direct assistance to households, while also engaging with policy makers and officials at the local, provincial and national level to improve the functioning of working property markets for low-income earners in South Africa. The TSC is a joint programme of 71point4 and CAHF.

About CAHF

The Centre for Affordable Housing Finance in Africa (CAHF) is an independent think tank in South Africa with a mission of making Africa’s housing finance markets work. CAHF’s work extends across the continent, and it is supported by and collaborates with a range of funders and partners.  CAHF brings information to the marketplace to enable stakeholders in the public and private sector to make policy and investment decisions in favour of improved access to affordable housing. Our emphasis is on the role that finance plays in realising this, and we champion market intelligence—data, market analytics and research—to stimulate investor interest and to support better policy. We are highly networked and engage with stakeholders at the local, national, regional, continental and global levels to support the realisation of investment towards affordable housing in Africa.

Website: www.housingfinanceafrica.org

 

About 71point4 Consulting

71point4 is a Cape Town-based strategic research consultancy specialising in consumer-focused, data-driven research. We use a wide array of research methodologies and data sources ranging from big data to small, qualitative data to help our clients drive change in transformational sectors that contribute to economic development in South Africa and across the continent.   Our team comprises data scientists, economists and marketers with diverse but complimentary skills. Collectively we have deep research experience across a range of sectors and topics including financial sector development and inclusion, housing markets and housing finance, credit markets and indebtedness, healthcare and youth employment.

Website: www.71point4.com

Email: [email protected]

 Press Contact:

Mantis Communications

Kerry Simpson

Tel: 079 438 3252

Email: [email protected]