The true impact of a divorce on your Will and Estate
Johannesburg - Monumental life changes such as a death, the birth of a child, marriages and divorces have the capacity to massively shift one’s financial wellbeing and in the same breath impact the lives of one’s household and extended family members.
A significant life change to consider is divorce. According to data released by StatsSA earlier this year, South Africa recorded close to a 5% annual increase in the number of registered marriages and unions for 2022, versus an 11% climb in divorces. The latest numbers continue to show a steady decline in the marriages over the last decade, as divorce rates remained relatively high.
“From an Estate planning perspective, a Will should be treated as a living document and updated regularly and updated regularly to reflect changes for circumstances such as the above. Many people believe that a divorce automatically revokes their Will, however, this is not the case. In South Africa, there are specific provisions to address how a divorce can affect one’s Will," says Karen McMurray, Product Manager, FNB Fiduciary.
According to Section 2B of the Wills Act No. 7 of 1953, if any person dies within three months after their marriage was dissolved, by either a divorce or annulment by a competent court and that person executed a Will before the date of such dissolution, that Will shall be implemented in the same manner as it would have been implemented if the previous spouse had died before the date of the dissolution concerned, unless it appears from the Will that the testator intended to benefit his previous spouse notwithstanding the dissolution of his/her marriage.
“In a nutshell, if you are divorced or getting divorced, it’s important to note that you have a three-month grace period from the date your divorce is finalised, to update your Will. After which, it is assumed that you do not wish to update your Will. Should a person die within this period, the ex-spouse is treated as if they are predeceased and the estate will be distributed in favour of the substitute heirs named in the Will or in the absence of substitute heirs, will devolve upon the interstate heirs. This is unless it is evident that the deceased specifically intended to benefit the ex-spouse. If a person passes away after the three-month period and did not update their Will, the Act assumes that they had no intention of updating their Will and the ex-spouse will inherit in terms of the Will, regardless of their marital status at date of death,” says McMurray.
“In addition to considering the impact of section 2B when drafting or updating your Will, it is crucial to remember that your maintenance obligations in terms of the divorce order do not cease on your death. Your estate must cover claims made by your ex-spouse, either in a personal capacity or as guardian of the dependent children born of the marriage, or possibly both. Consider whether there will be sufficient liquidity in your estate to meet these claims,” she says.
It is important that you provide a structure that will manage such payments in your Will, which could be payable for many years after your death. “Failure to plan carefully in this regard may not only prejudice the rights of the persons you are liable to maintain in terms of the divorce order, but also the financial security of your other dependents at the time of your death, such as a second spouse and children born of that marriage,” said McMurray.
Ester Ochse, Product Head, FNB Integrated Advise concludes by advising that, “while this may be a very difficult time for those going through the divorce process, consumers are advised to be extra cautious about how they handle their financial affairs over this period. It is highly recommended that they enlist the services of a private advisor to look at their financial position holistically and ensure that their financial journey continues in the right direction over a long-term period. In addition, for your overall mental and emotional wellbeing, it’s also advisable to seek counselling to ensure that you approach your new status with a holistic, balanced, healthy and positive mindset in order to safeguard the future of those who depend on them.”
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