LOW-INCOME earners who have acquired property through government-subsidised housing programmes may leave their dependants and families in dire straits should they die without a valid will. | Henk Kruger African News Agency (ANA)
LOW-INCOME earners who have acquired property through government-subsidised housing programmes may leave their dependants and families in dire straits should they die without a valid will. | Henk Kruger African News Agency (ANA)

If you own property through a state housing programme, you need a will

By Staff Reporter Time of article published Sep 14, 2021

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LOW-INCOME earners who have acquired property through government-subsidised housing programmes may leave their dependants and families in dire straits should they die without a valid will.

This is according to the Transaction Support Centre (TSC), which assists lower-income clients with property-related issues.

The TSC and its affiliates, research consultancy 71point4, the Centre for Affordable Housing Finance in Africa, and conveyancing firm STBB, report that while millions of South Africans prepare for death by buying funeral policies, only about 30% have wills.

When a property owner dies without a will, he or she can unwittingly leave behind significant costs and financial anxiety for their families. Worse, it could mean their children or relatives could lose their home.

Many low-income South Africans are beneficiaries of government-subsidised housing programmes, and may have received a home from the government free or at very low cost. In urban areas these properties typically trade for over R200 000. Owners therefore need 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 can increase significantly. 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 office of the Master of the High Court, which supervises the administration of deceased estates, will appoint an executor to wind up the estate in terms of the Intestate Succession Act. Under this Act, 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 a deceased estate to the Master’s office are required to complete and sign a next-of-kin affidavit providing the names and ID numbers of relatives who might have a claim on the estate. The TSC says it appears that this data is not always verified with the Department of Home Affairs. Thus, the Master’s office relies on the integrity of the signatory, leaving the process open to fraud.

When the lack of a will hampers a home transfer

In one case, the client Lungisile (not her real name) approached the TSC for assistance in transferring her mother’s property into her name. The 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 her and her nephew’s names. But this has implications for Lungisile’s ability to sell or borrow against the property until the child turns 18.

Getting 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.”

Wills are typically drafted by estate attorneys, financial advisers, or with the assistance of your bank. This week, during Wills Week, you can get a will drawn up free by a participating attorney. For information on participating practitioners, visit the TSC Facebook page.

*For more on wills and estates, read the September 2021 issue of our information-packed IOL MONEY monthly digital magazine.

PERSONAL FINANCE

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