Understanding property inheritance: essential insights for heirs

If you plan to bequeath immovable property in your Will, be mindful that the process can be complicated. As the owner of immovable property, it must transfer to another person upon your death, either through intestate succession or as stipulated in your Will. If you nominate an heir in your Will, your appointed executor will oversee transferring the property to the beneficiary’s name. However, your marital regime may restrict your freedom to distribute immovable property, making it crucial to fully comprehend how your marital contract influences your property rights. 

For instance, if you are married in a community of property, only 50% of the joint estate is yours to bequeath. This means that your surviving spouse will remain a one-half share owner of the fixed property. If you are married out of the community of property with the accrual and intend to bequeath your property to a third party, bear in mind that your surviving spouse’s claim for their share of the accrual could necessitate the sale of your fixed property, which could complicate matters. 

From a cost perspective, where the fixed property is transferred to another person by way of inheritance, whether testate or intestate, no transfer duty is payable, and Sars will issue a transfer duty exemption certificate upon application by the transferring attorneys. However, keep in mind that your deceased estate remains responsible for the conveyancing costs, Deeds Office fees, rates, and levy clearance certificates. 

Transferring property from a deceased estate is complex, requiring careful handling by your executor, who typically outsources this to conveyancing attorneys. As an asset in your estate, your property must be reflected in the Liquidation and Distribution (L&D) Account, and no transfer of fixed property can proceed before the L&D Account has undergone public inspection and approval by the Master. Further, the conveyancing attorneys must lodge special documentation at the Deeds Office demonstrating rightful heirship and compliance with Section 42(1) of the Administration of Estates Act.

If your property carries a home loan and the appropriate bond cover is in place, your executor will utilise the life cover proceeds to settle the bond, allowing your heir to inherit an unencumbered property. Without such cover, your executor may need to liquidate other estate assets to repay the bond, as debt settlement is a priority in estate administration. If your heir is intent on taking ownership of the property, they can apply to take over the existing home loan, although they will need to meet the bank’s qualifying criteria to do so. If your beneficiary is not in a position to take over the home loan or chooses not to, your executor may sell the property out of the estate at market value. In such circumstances, your executor is responsible for signing the Offer to Purchase and all other transfer documents. Further, the transferring attorney must obtain a certificate from the Master verifying that they have no objections to the transfer. 

Additional complexities can arise if your heir is a minor and no testamentary trust has been established in your Will. Since minors (under 18) cannot legally own property, the executor must seek permission from the Master to sell or manage it on the minor’s behalf. Without a trust, the minor’s legal guardian will be responsible for administering the property until the child reaches adulthood. However, the guardian faces certain limitations in this regard, notably requiring the Master’s consent to sell the property, contingent on proving it serves the minor’s best interests. Where the fixed property is left to your minor in a testamentary trust, the trustees will be responsible for administering the property on behalf of your minor children, and this is generally speaking a much more favourable method of leaving fixed property to minors.

To facilitate a seamless transfer of property upon your death, regularly update your Will and maintain current records of home loans, bond cover, municipal accounts, utility bills, and title deeds. Diligent planning in bequeathing immovable property can safeguard your intentions, mitigate disputes, and streamline estate administration for your beneficiaries.

* Tapfuma, CFP, is an associate financial planner at Crue Invest.

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