Do I have to report my late spouse’s estate if he/she did not own anything, but we were married in a community of property?
When a spouse passes away, there are a great number of things that must happen, and you are often responsible for a lot of them. You might have to locate the will, call his/her employer if they were employed at the time, talk to your insurance company, notify your accountant, change the property titles, and more. Your marriage status, in or out of community of property, will have a big effect on exactly what happens when a spouse passes away.
In or out of community of property
Being married out of community of property means that what is mine stays mine and what is yours stays yours even after you are married. The estates don’t join into one shared estate and all assets and liabilities remain each spouse’s own responsibility. You can choose to have an out of community contract with accrual, however, where spouses share the assets that accumulate after they got married and increase their wealth together.
Being married in community of property means that everything you had before your marriage is joined into one shared estate and everything you gain after marriage is also part of that joint estate. The assets and liabilities are effectively shared 50/50. Both parties are responsible for the debt of the individual and any financial decisions must be agreed upon by both spouses
What does all this mean when a spouse passes away?
If you are married out of community of property excluding accrual, your spouse’s estate will be wound up. If there is a will, it will usually be adhered to, except if there are discrepancies or claims made against it. If accrual was part of the contract, it can be a bit more complicated, and the details of the contract will determine much of what happens. Some assets, for example, can be excluded from the estate to which accrual applies.
If you were married in community of property, things can be quite complicated at first. The question of whether you should report your late spouse’s estate because he/she did not own anything is not really applicable, as your late spouse did not have an estate, you had one together. That joint estate must be reported to the Master of the High Court.
That estate needs to be dissolved because there cannot be a joint estate with just one owner. The surviving spouse could be left in a tough spot as an executor needs to be appointed after the estate is declared and the solvency of the estate determined. While this takes place and upon reception of the death certificate, banks usually freeze the accounts, and the surviving spouse might not have access to the shared finances even though he/she has claim to 50% of the value of the net joint estate. Any accounts that were not joint accounts, i.e. accounts in the surviving spouse’s name, will not be frozen.
After the executor is appointed and the solvency determined, the debts, for which the surviving spouse is also partially liable, need to be settled. Once this has taken place, the surviving spouse becomes entitled to 50% of what is left, and the deceased half of the estate will be distributed as per his/her will should there be no discrepancies and no claims against the will.
What should I do?
There are several important considerations to keep in mind. Firstly, if you are looking to get married, consider if you want to get married in or out of community of property. If you choose out of community of property, have a detailed ante-nuptial contract drafted to eliminate confusion upon the death of a spouse. Secondly, you should talk to your spouse about what will happen and what your wishes are when you or your spouse should pass away – make sure you have the documentation in place to have your wishes carried out. Thirdly, you should have a detailed will drawn up by competent attorneys that have your best interests at heart. At AED Attorneys, we understand that when dealing with the death of a loved one, you don’t want to also struggle with legal matters. We will help you draft a will to ensure that on the legal end, things go as smoothly as possible.
If your spouse has passed and you do find yourself in a difficult situation concerning your joint estate, we will assist you face-to-face and truly listen to what you have to say to resolve the matter legally and with as little hassle to you as possible.
AED Attorneys understands that every situation is unique, and although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided.