Getting your house in order
A family home is often the most valuable asset that a person acquires during his or her lifetime. Particular care should be taken when planning your estate to ensure that your home is left to surviving heirs without any problems.
Mortgage bonds
In order to transfer an immovable property to an heir, any mortgage bond over the property will need to be cancelled. Often a homeowner lacks sufficient cash in his or her estate to settle a mortgage bond. It is imperative to have sufficient life assurance in place to cover outstanding mortgage bond obligations if one wishes to avoid a forced sale of the family home. This is true even if you own a property jointly with another, such as a spouse.
Transfer costs
The good news is that SARS do not levy transfer duty on transfers of immovable property from a deceased owner to his or her heirs. But your executor will have to appoint a conveyancing attorney to register the transfer to your heirs in the deeds office. One should plan for conveyancing fees and bond cancellation fees.
Property description
If you specifically bequeath your immovable property to a beneficiary in your Will, be careful to describe the property accurately including the erf number or sectional title description. If you subse-quently sell the property and buy a new one, be sure to update your Will to reflect the new property’s details. A bequest in a Will of a property which you no longer own when you die will simply fail.
In order to transfer an immovable property to an heir, any mortgage bond over the property will need to be cancelled. Often a homeowner lacks sufficient cash in his or her estate to settle a mortgage bond. It is imperative to have sufficient life assurance in place to cover outstanding mortgage bond obligations if one wishes to avoid a forced sale of the family home. This is true even if you own a property jointly with another, such as a spouse.
Transfer costs
The good news is that SARS do not levy transfer duty on transfers of immovable property from a deceased owner to his or her heirs. But your executor will have to appoint a conveyancing attorney to register the transfer to your heirs in the deeds office. One should plan for conveyancing fees and bond cancellation fees.
Property description
If you specifically bequeath your immovable property to a beneficiary in your Will, be careful to describe the property accurately including the erf number or sectional title description. If you subse-quently sell the property and buy a new one, be sure to update your Will to reflect the new property’s details. A bequest in a Will of a property which you no longer own when you die will simply fail.
Usufructs
Sometimes a homeowner wishes on to leave the property in question to his or her children on death, but at the same time guarantee a surviving spouse shelter for the rest of the spouse’s lifetime. A com-mon planning tool used in these circumstances is to leave a spouse a “lifetime usufruct” over the property while bequeathing underlying ownership (called “bare domin-ium”) to the children. On death the property will be transferred to the children but a usufruct – the right to live in or rent out the property – will be recorded on the title deed in favour of the spouse. If you plan to grant a usufruct in your Will, you should discuss and plan for the possible pitfalls with your estate planner. For example, the spouse as “usufructuary” (the person to whom to usufruct is granted) will by law be responsible for the maintenance and running costs of the property, possibly creating an unintended future burden. Also the spouse will not be able to sell the property without consent of the children if he or she wishes to relocate and acquire an alternative property.find themselves unable to sell the property while it is subject to a usufruct. A bequest of the property to a testamentary trust may be a more practical solution.The most crucial tool in making sure an asset as valuable as a family home reaches heirs without complications is a properly planned and executed Will. To achieve this it is recommended that one seeks advice from appropriate professionals.
Sometimes a homeowner wishes on to leave the property in question to his or her children on death, but at the same time guarantee a surviving spouse shelter for the rest of the spouse’s lifetime. A com-mon planning tool used in these circumstances is to leave a spouse a “lifetime usufruct” over the property while bequeathing underlying ownership (called “bare domin-ium”) to the children. On death the property will be transferred to the children but a usufruct – the right to live in or rent out the property – will be recorded on the title deed in favour of the spouse. If you plan to grant a usufruct in your Will, you should discuss and plan for the possible pitfalls with your estate planner. For example, the spouse as “usufructuary” (the person to whom to usufruct is granted) will by law be responsible for the maintenance and running costs of the property, possibly creating an unintended future burden. Also the spouse will not be able to sell the property without consent of the children if he or she wishes to relocate and acquire an alternative property.find themselves unable to sell the property while it is subject to a usufruct. A bequest of the property to a testamentary trust may be a more practical solution.The most crucial tool in making sure an asset as valuable as a family home reaches heirs without complications is a properly planned and executed Will. To achieve this it is recommended that one seeks advice from appropriate professionals.