Should you own a house (immovable property) PRIOR to being married in community of property; you may want to consider a few points with your Estate plan.
Benjamin Franklin very wisely stated: “By failing to prepare you are preparing to fail.”
How will you know if you are married in or out of Community of Property (COP)?
- If you & your partner have signed an Antenuptial Contract (ANC) prior to your marriage and the ANC was registered in the Deeds office 3 months from the date of signing, your marriage is one Out of Community of Property.
- If you have not signed an ANC, then the Common Law provides that the marriage is one IN Community of Property.
IF IN COP:
If you die FIRST without leaving sufficient life cover and without a valid will and; if there is a mortgage bond registered over the property:
You MUST note the following:
- Although the title deed reflects just you as the owner, the property automatically becomes an asset in your joint estate when you marry – it will automatically be registered in BOTH your names.
- This bond will not be settled automatically, as the property will be registered in both your names, this being an automatic consequence of your marriage
in C. O. P.
- The whole property will fall into your deceased estate.
- The assets must be distributed in terms of the Intestate Succession Act
- If you have any minor heirs – this minor’s cash share in the estate must be paid into the Guardian’s fund.
- If your estate does not have sufficient funds to cover this bond & the share due to your minor heirs (payable to Guardians Fund,) then your partner will have to apply to the bank to be substituted as the debtor & to cover all costs for the estate administration as well as any share due to the minor heir. The provisions of the National Credit Act must be complied with i.e. the normal credit and affordability checks will be done and if your partner does not qualify, then your property will have to be sold.
So, to AVOID these unwanted consequences, ENSURE that you:
- Have a validly executed will. It is best for you to consult with a Specialist Fiduciary Attorney
- Have sufficient life cover to settle the bond in both your names.
Contributor: Hayley Pillay
Designation: Director
Department: Property, Conveyancing, Estate Planning
Email: Hayley@pgpslaw.co.za
