With four out of 10 marriages in South Africa ending in divorce before their tenth anniversary, it is crucial that spouses plan ahead to safeguard their assets.
While marriages are entered into with the best intentions, it is a sad reality that close to half of unions end in divorce.
It is important that couples go into a marriage with their eyes wide open and that they can and should protect their assets well before a marriage potentially ends.
While most do not even want to contemplate anything but marital bliss until ‘death us do part’, it is very important to be practical and have a plan that ensures your legacy and the interests of your family are well protected.
An ante-nuptial contract, for instance, can be drawn up to allow for any growth of each spouse’s separate estates during the marriage to be shared equally on death or divorce.
While marriages without an ante-nuptial contract are automatically in community of property, a marriage can also be out of community of property without accrual through drawing up an ante-nuptial contract whereby the parties set out the rules and conditions in respect of the division of assets.
Another way to ensure a better outcome for married couples is to set up a spousal trust in a will. This is a good way to avoid a surviving spouse changing his or her will to dis-inherit people who may have been important to the deceased.
Setting up a spousal trust
The spousal trust would have been set up in such a way that the trust – rather than the survivor – owns the will maker’s assets until the trust terminates.
If drafted properly this ensures that the survivor can benefit from the interest and income from the trust property while he or she is still alive.
While a spousal trust or any other mechanism may have been used to protect individual assets, the Maintenance of Surviving Spouses Act still gives the surviving spouse a claim against the estate of the deceased spouse for reasonable maintenance needs until his or her death or remarriage insofar as he or she is unable to provide for such needs from own means.
A number of considerations would be taken into account to determine reasonable maintenance needs, including the length of the marriage, the standard of living of the survivor during the marriage, the financial needs and obligations of the survivor, the survivor’s age and the amount available in the deceased estate available for distribution to heirs and legatees.
However, the survivor’s own means and earning capacity have to be taken into consideration as well before any valid claim can be made against the deceased spouse’s estate.
Updating a will
With divorce rates on the rise, it is very important to regularly update a will whenever there is a change in the status of one’s family.
For instance, very few testators are aware that his or her subsequent spouses and children or any other child subsequently born to the deceased after a previous marriage was dissolved by divorce or annulment could be disinherited if a new will has not been drawn up, or an existing will be amended, within three months of the divorce.
This is because the Wills Act only allows for a ‘temporary revocation’ of any benefit to a previously divorced spouse in a will for three months after the date of the divorce.
If no new will had been drawn up within three months of the divorce a previous spouse could inherit and any new spouse and children may be disinherited, which could and often does have devastating consequences.
The Marriages and Divorces report released by Statistics South Africa this year shows that four in ten divorces (44,4%) of the 25,326 in 2016 were marriages that lasted for less than 10 years.
Divorces increased from 21,998 in 2012 to 25,326 in 2016, and constitute an increase of 0,3% from the 25,260 divorces granted in 2015.
According to the report, Western Cape had the highest number of divorces granted with a total of 6,224 (24,6%), followed by Gauteng with 5,816 (23,0%), KwaZulu-Natal with 4,314 (17,0%) and Eastern Cape with 3,352 (13,2%).
The report further shows that, irrespective of population group, a higher proportion (26,9%) of divorces came from marriages that lasted 5 to 9 years. In 2016, 13,922 (55,0%) divorce cases involved children aged less than 18 years.
It is clear you need to give effect to your intentions while you are still alive or else it can go horribly wrong.
The best solution is to use trusted partners to ensure all your interests are taken care of. Trustees and executors are in place, who trust and understand you and your family’s needs, and have their welfare at heart.
Most importantly you must regularly review your will to make sure your legacy and the interests of your loved ones are safeguarded.