Attwood Marshall Lawyers’ Estate Planning Lawyer, Leigh Steyn talks about her South African roots where estate litigation is a rare phenomenon. Here she explains what she believes they are doing right in estate planning and why Australia should follow suit.
I come from a family with strong ties to social justice and the law dating back to my grandfather’s law firm, Allams Attorneys, one of the oldest and most respected firms in East London, South Africa. My grandfather’s firm was one of the few firms during apartheid in South Africa which pro-actively employed black lawyers and as such, was a prime target for intimidatory attacks by the pro-apartheid incumbent movement at the time, narrowly evading a car bomb attack outside his office.
With roots like this, it was inevitable that I, as his granddaughter would gain my law degree from Nelson Mandela’s alma mater, the University of Fort Hare. As an ardent advocate of social justice, I wanted to ensure the law firm I chose to work for in Australia shared my values. Attwood Marshall Lawyers was an easy choice for me.
As a solicitor, I have practiced in most areas of law but have focused the past ten years on estate planning and estate administration. I feel passionately about helping people ensure their assets and family needs are fully protected by carefully crafting their Will and other required legal documents to give them peace of mind. Again, Attwood Marshall Lawyers’ intent or purpose of helping people and changing their lives for the better was a perfect fit for me and my own purpose as a lawyer.
Estate planning in South Africa and Australia are for the large part, mostly the same. A stark difference in Australia though is the prevalence of estate litigation and the heartache and expense that can bring to families mourning the loss of their loved ones. In South Africa, estate litigation is not as ubiquitous which I believe is due to several factors.
Firstly, it cannot be ignored that South Africa is still classed as a third world country and as such, there is a smaller demographic group of the middle and upper classes with the money available to fight for their inheritance.
Another likely reason behind South Africa’s lack of estate litigation, is that it is routinely common for South Africans to put clauses in their Wills. There is a specific clause Wills can adopt which states that if the person who’s inheriting has a spouse or de facto partner, their other half cannot have any claim to the inheritance. These clauses are almost unanimously upheld by the courts and there simply is not a culture of estate litigation in South Africa because everybody accepts the Will-maker’s decision.
I believe Australia should look at South Africa’s example of best practice in estate planning and consider the routine inclusion of clauses in Wills.
The only way a spouse or de facto partner could make a claim is if a beneficiary of a Will converts their inheritance, for example a property, and they sell that property and put the money into the bank. Then that inheritance cash can be subject to a family provision claim. Whereas if you inherit cash, that cash can never be claimed by a spouse or a de facto partner as long as the exclusion clause is in your Will.
The lack of disputes about inheritance or estates is largely cultural too and could be said to be due to how South Africans are accustomed to get married.
It is commonplace for most people to get married with contracts similar to pre-nuptial agreements which overtly identify the financial terms of entering into a marriage contract with your spouse. I believe the South African cultural prevalence of marriage contracts has ensured that estate litigation and the expense and drama which it can bring, is kept to a minimal.
We have three different ways that we get married in South Africa.
- In community of property,
- Out of community of property with accrual or
- Out of community of property.
In community of property: All assets that one spouse acquired prior to the marriage, as well as the assets accumulated during marriage, will fall into the joint estate. Which means that once the marriage is terminated, all the assets will be calculated and divided between the two parties equally. This includes any debt acquired before and during the marriage. The only asset which may be excluded from the joint estate is an inheritance.
Out of community of property with accrual: The advantages of the accrual system is the protection of each spouse’s assets from creditors of the other spouse. I.e. neither spouse will be affected by the debts or liabilities of the other. At the dissolution of their marriage any assets not listed in the Antenuptial contract will be shared between the parties but there it is calculated accordingly. So, your asset value, minus any debt you have, minus any inheritance/compensation received by injury/donations made between spouses or any defamation awards received by any spouses. Then any remaining funds are calculated on a percentage of contribution, financial to the family “home” assets.
‘Out of community of property without accrual’ is the third way South Africans can get married. This happens with people with blended families who have been previously married, or are older, and have developed their property portfolios and finances. This type of marriage means they get married without the accrual. Effectively what is yours is yours and what is your partner’s, remains theirs.
If you don’t actively do something to choose a contract, then you are automatically married in community of property. We also have customary marriages which fall in ‘community of property’.
In summary, I believe it is too easy to fight a Will in this country. If a Will maker stipulates their wishes in a legally binding Will, why should they be challenged? Once they made their Will and it is enacted upon their death, they can’t turn around and stand up for themselves.
I don’t think there should be a culture of challenging Wills as currently exists in Australia. Australia should consider marriage contracts and exemption clauses in Wills as a standard procedure in estate planning to avoid the inevitable immense expense, heartache and drama involved for all.
Having said all of that, I acknowledge that all Australian states and territories have similar succession laws (which in turn are based on English statutes) which provide the statutory right of any eligible beneficiaries to make a claim for further provision against the estate if those beneficiaries have not been adequately provided for in the estate. My esteemed estate litigation colleagues at Attwood Marshall Lawyers do a fantastic job of acting for executors defending claims against the estate, and also acting for beneficiaries who have not been adequately provided for in the Will. I’m sure they would whole-heartedly disagree with my views, but that is my opinion comparing the two different countries.