According to Bonny Feldman, media liaison for First National Bank: "Couples living in same-sex unions or couples not married but living together should ensure that their estates are planned in such a way that their partner is protected."
According to South African law the definition of ?spouse? includes a man or woman, married in terms of official marriage law. However, the definition excludes unmarried couples living together and same-sex partnerships.
Feldman explains: "The implications for same-sex partnerships mean that, if there is no will in place, the surviving partner will not receive any estate assets owned by the deceased partner. Furthermore, if the surviving partner contributed to bond repayments but the house was not registered in his/her name, he/she will lose the house as well as the amount of money paid into the bond.?
The wording on a will in terms of inheritance by a same-sex partner needs to be specifically written to ensure that the partner is protected. "A will needs to be written to identify the partner as a spouse and should be worded as something like, ?to my lifelong partner in a same-sex union, John Doe? to ensure the partner is protected."
The importance of identifying your partner as a spouse is imperative to ensure the partner is protected in the event of your death.
The implications for same-sex couples in terms of tax are that, if the nett value of the estate exceeds R1.5 million, estate duty is levied. estate duty is 20 percent tax on that portion of the estate over R1.5 million. However, no estate duty is payable if the beneficiary is a spouse. ?Spouse? in the Estate Duty Act includes unmarried couples, both heterosexual and homosexual. The following calculation illustrates the potential saving in tax should a will be in place and the partner be properly identified.
|Estate planning example||Gross value of assets||R3 700 000|
|LESS: liabilities||R700 000|
|Nett assets||R3 000 000|
|LESS: Amount free of estate duty||R1 500 000|
|Taxable amount||R1 500 000|
|20% of taxable amount (R1 500 000 x 20%)||R300 000|
|Tax payable||R300 000|
|Tax payable if partner named in Will||NIL|
"If a will names the partner as a spouse, he/she will inherit the value of the estate. However, if the partner is not clearly identifiable from the wording as a spouse, the individual will inherit the value of the estate, but will have to pay estate duty on the taxable amount,? concludes Feldman.