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“I am divorced, but currently in a relationship that some describe as a ‘customary marriage’ because I have paid partial lobola. After an acrimonious divorce, it is not my intention to enter into any formal marital regime at this stage,” he says.
Geraldine Macpherson, a legal marketing specialist at Liberty, says it is interesting to note that while lobola is not a requirement in terms of the Recognition of Customary Marriages Act, there seems to be consensus that it is, practically speaking, one of the elements essential to a valid customary marriage.
“There are court cases where the payment or otherwise of lobola was central to the court’s decision on whether a valid marriage was entered into. While the act places a duty on the parties to register their marriage, it also states that failure to do so does not invalidate the customary marriage.”
Macpherson says it seems to be more common for couples to register these arrangements only when they are getting divorced, or after the death of one partner.
While valid customary marriages are not invalidated if not registered, you need a marriage certificate (registration papers) to claim against a deceased estate or in terms of a divorce.
“So, the fact that partial lobola has been paid shows strong intention and may be enough for Thabo’s partner to prove that a valid marriage had in fact occurred. In terms of the Recognition of Customary Marriages Act, this would automatically be in community of property, unless an antenuptial contract was entered into,” she cautions.
This means that despite Thabo not wanting to enter into a formal arrangement, his payment of partial lobola could be used to prove that he has done so already. If his marriage is recognised as being in community of property, his partner or wife would be entitled to claim 50% of his estate if he dies or decides to leave her.
While it is important for Thabo to have a will wherein he spells out how his estate should be divided when he dies, he also needs to establish a clear understanding with his partner about the status of their relationship. In other words, he must clearly spell out his wishes.
“I would strongly recommend that he seek legal advice from an attorney with specialist knowledge on customary marriages in this regard,” Macpherson says.
One of the reasons Thabo’s question does not have a straightforward answer is that traditional marriage issues such as his are usually resolved on a case-by-case basis.
When drawing up a will, Thabo needs to realise that if he is deemed to be married in community of property, half his estate will automatically go to his wife. It is important to note that if his marriage is recognised, then no estate duty would be payable on any amounts left to her.
If Thabo has any children from his previous marriage, it is important to note that his divorce order will take precedence over his will.
“His maintenance obligation becomes a creditor claim against his estate if he dies, and is calculated to the date stipulated in the divorce order. For example, let’s say he has a 10-year-old son and he has to pay maintenance until the son turns 24. If Thabo dies today, the maintenance claim has to be calculated based on 14 years of payments, taking inflation into account, and this claim is then lodged against his estate before his current wife or partner can receive any funds,” Macpherson says.
She says it is common for men in such a situation to take out a separate life insurance policy to account for the maintenance claim. However, if Thabo does this, he has to ensure that his will specifically refers to the life insurance policy with a note that it is intended to settle the maintenance claim. A failure to do so means that his former wife could potentially claim on the life insurance policy, and institute a maintenance claim against his estate.
If Thabo has a pension fund, his fund assets will be divided between his financial dependants and his wife. The trustees of the pension fund have an obligation to investigate and trace all financial dependants before paying out any money after Thabo’s death.
If Thabo’s children are still very young and he wants to ensure that funds left for them are not squandered, his best option is to set up a testamentary trust. Macpherson cautions that if he chooses to do this, he must ensure that he makes a careful selection when it comes to choosing trustees.
While it may seem easier to leave the benefits to a loved family member such as his sister, he needs to remember that he has no idea what path her life will take. If she gets married, will the benefit be safe after a divorce? Who will decide how to invest the money? What if she runs up debt? Will the money be protected?
“There is merit in having a professional trustee as one of the trustees to administer the finances because this eliminates a source for future conflict in the family. Also consider who the guardian should be, and whether this person will also be a trustee,” Macpherson says.
When Thabo consults his financial planner, another way to ensure he leaves a financial legacy is by including the cost of his children’s education in the life cover calculation. If his current life cover is not sufficient to cover their educational costs, he could consider a product specifically designed to meet this need.
“Liberty’s Lifestyle Protector EduCator benefit is designed to meet the cost of the child’s tuition and other educational expenses. It pays directly to the educational institution, which guarantees that the funds will be used for their intended purpose. In addition to school fees, it also pays for tertiary education domestically and at certain approved international institutions. Provision is also made for the payment of a supplementary allowance and an achievement allowance,” Macpherson says.
. Estate duty will be calculated at 20% of the value of your estate. The first R3.5 million is exempt from estate duty tax. Thabo’s estate will be liable for capital gains tax and any income tax that he may not have paid by the time he dies.
. The will must be valid and signed by two witnesses who are not beneficiaries.
. He should ideally have two original copies of the will – one stored with his financial planner and a second copy kept at home. His wife or partner should know where to find the will that is at home.
. A basic will can cost anything from R500 to R1 500. Although financial institutions such as banks offer clients a “free will”, this is usually on condition that the bank is appointed as executor of the estate and will earn executor fees.
. Executor fees are 3.5% of the gross value of Thabo’s assets and this comes to 3.99% with VAT. If he leaves behind assets that will generate an income after his death, such as rental property or interest-bearing assets, then the executor of his estate earns 6% plus VAT, or 6.84%, on those assets until the estate is wound up. If the estate is worth less than R250 000, the Master of the Court can issue an appointed family member with a letter of authority confirming their executorship, and they are not required to advertise the estate publicly for debtors or creditors to put in their claims.
. Note that the executor fees above are the maximum fees that an executor can charge. It is advisable for Thabo to have his will drawn up and to appoint an executor before he dies so that he can negotiate a reduced fee upfront. This will save his family the hassle of having to appoint an executor and negotiate fees after his death.
