While South African law holds your ability to bequeath your assets to your heart’s content in high regard, maintenance obligations to your children, surviving spouse and even former spouse will take precedence over your inheritance wishes if you don’t do proper planning.
In fact, failure to make the necessary arrangements with regard to maintenance obligations will probably lead to disputes over the distribution of your estate, warns Ronel Williams, chairperson of the Fiduciary Institute of Southern Africa (Fisa).
“Your maintenance obligations don’t die with you.”
According to South African law, parents are required to support their children until they are self-sufficient, Williams explains. This could be when they turn 18 or at a later stage – for example when tertiary studies are completed.
But there are no hard and fast rules and each case will have to be dealt with based on the particular circumstances. If a child (over 18) passed Grade 12 and started working immediately, it might be difficult to claim that he or she is not self-sufficient and need maintenance.
The maintenance obligation is applicable to children born from a marriage, illegitimate children and adopted children.
“During the lifetime of the parents, the burden of maintenance is divided between them according to their respective means. The death of one of the parents does not absolve him or her from this responsibility and the maintenance obligation will accrue to the estate,” Williams notes.
Even where a child inherited from the estate, the child may theoretically still have a maintenance claim against the estate if the inheritance is not sufficient.
“It might be that the child gets a token amount or a percentage of the estate but that is not sufficient for the maintenance of the child going forward, considering all the items that could potentially fall under maintenance.”
Maintenance is generally required for food, accommodation, clothing, household expenditure, medical and dental care, education, transport and entertainment.
A surviving spouse is also entitled to reasonable maintenance until death or remarriage if they cannot provide for themselves.
The amount available in the estate, the spouse’s means (including the inheritance and other benefits), earning capacity, financial needs and obligations, the duration of the marriage, age and living standard will be taken into account when considering the spouse’s maintenance needs.
Such a maintenance claim is usually settled by way of a lump sum payment from the estate to the surviving spouse. This can be a particularly thorny issue if the surviving spouse gets remarried, because the maintenance obligation would come to an end at that time, but the lump sum cannot be recovered.
Although maintenance claims rank behind those of creditors when an estate is divided, they do take precedence over a testator’s inheritance. The surviving spouse and minor children rank equally as far as claims are concerned.
Where there isn’t sufficient money to settle both the survivor’s claim and the dependent child’s claim in full, a pro-rata calculation will be done.
Even a divorcee may have a maintenance claim against a former spouse’s estate.
Williams says courts typically grant two types of maintenance orders in the case of divorce. The first order merely confirms the settlement agreement between the former spouses. In the absence of such a settlement, the court will make its own order.
In the first example, the agreement often states that if the person who receives the maintenance dies, the obligation will come to an end, but fails to specify what would happen if the maintenance payer dies first.
“If there is no provision, then the general rule is that that obligation will continue and the estate of the maintenance payer will now effectively have to take over that obligation.”
In the second case where the court makes its own order, maintenance payments will always come to an end when the receiver dies or gets remarried, but there is uncertainty about the situation where the person paying maintenance dies first.
Williams says there are different court cases on the matter, but the general thinking seems to be that the obligation will also continue after the person’s death and that the estate will have to take over that obligation.
Individuals don’t necessarily plan for maintenance payments that may arise after their death, Williams says.
“It does almost seem sometimes as if people think that the obligation dies with them.”
In practice, this means that a will is structured in a way as if there is no maintenance obligation. In the absence of such an obligation, the will may have been practical, but because maintenance payments take precedence over inheritance payments, it can change the whole landscape and may effectively render the will irrelevant.
Against this background, it is important that individuals consider any maintenance obligations that may arise after their death and do their estate planning accordingly with the help of a professional, Williams says.
“The best way to ensure that all your maintenance requirements are complied with is by establishing a testamentary trust in terms of your will. The trust will come into operation after your death and can be used to house funds intended for your maintenance obligations.
“The mechanism is to bequeath a capital sum to the trust in terms of the will. The funds will be invested in order to generate income, which can be used to meet your maintenance obligations. One of the main advantages of using a trust for your maintenance obligations is that the capital is protected and preserved for your eventual heirs. The trustees will determine when a maintenance obligation would come to an end and deal with the assets the way the testator intended,” Williams says.
The Fiduciary Institute of Southern Africa sponsored this content.