Estate Planning & Divorce

Prompted by an insurance broker, we embark upon an estate planning exercise endeavouring to map out how our retirement years are likely to pan out. A Will may be prepared at that stage and despite the broker stressing that the estate plan and Will needs revision from time to time, this very often fails to happen and the paperwork is filed away in some dark drawer or in the bottom of the safe.

In the intervening years, children and grandchildren are born and situations change – possibly to the extent that the marriage may have ended and another one may even have begun – sometimes with hardly a second thought to the earlier estate plan and Will. Divorce will almost certainly have a major impact on the composition of one’s estate.

How the parties are married, how assets are held, the ages and general welfare of children and the overall conduct of the parties will all influence how the assets of the marriage are distributed between the parties.

Where the parties are married in community of property or in terms of the Matrimonial Property Act with accrual, the marital regime will prevail and the court will generally not interfere with the division of assets unless there are compelling reasons to do so. However, where the parties are married by ante nuptial contract without accrual the court will intervene, unless the parties are able to come to an agreement as to who should take what before approaching the court. In the absence of a settlement agreement the court is likely to step in to ensure fair play prevails.

A marital breakdown will be assessed by the court on its merits, particularly where minor children are involved.

The Wills Act does provide that if a person dies within three months after their marriage was dissolved by divorce, and that person executed a Will before the date of divorce, the content of the Will would stand and be implemented as if the previous spouse had died before the divorce – unless it is clear that the person intended their previous spouse to benefit. This three month grace period is intended to allow a recently divorced person to get their affairs in order.

We all know that having to adjust to different living arrangements, a different income level and asset base coupled with the trauma always associated with divorce means that a Will is often the last thing on the mind of a recently divorced person.  Many deceased estate practitioners can relate how the ex-spouse already received a hefty divorce settlement but then inherited the entire (or bulk of the) estate several years later as the Will was never amended.

One should be mindful that South African law, unlike many other jurisdictions, does not invalidate a Will executed before one marries. In many other countries ones Will becomes invalid once you get married or remarried. This is obviously to avoid an earlier Will bequeathing assets to a parent, friend or ex-spouse taking precedence to the detriment of one’s present wife.

Estate planning and particularly a Will needs to be assessed frequently, but definitely after a divorce.

(David Knott is with Private Client Trust)

 

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