Page 38 - Nexia SAB&T Estate Planning Guide 2024

Divorce
In the event of divorce, the marriage will be dissolved by court decree, which will
address such aspects as child maintenance, access, guardianship and custody,
spousal maintenance, the division of assets, division of pension interests and so
on.
The divorce order will have an effect on the estate planner’s estate plan, which
would then need to be reviewed and adjusted.
Cohabitation and definition of ‘spouse’
Cohabitation is defined as a stable, monogamous relationship where a couple
who do not wish to or cannot get married, live together as spouses. The Taxation
Laws Amendment Act (no.5 of 2001) has extended the definition of ‘spouses’
for purposes of the Transfer Duty Act (no.40 of 1949), to include “a same sex
or heterosexual union which the Commissioner is satisfied is intended to be
permanent, and a customary union, as well as a union recognised as a marriage
in accordance with the tenets of any religion.”
Many pieces of legislation now define a spouse to include a partner in a
cohabitative relationship, including the Pension Funds Amendment Act (no.24 of
1956) – the effects of which are that cohabitees will benefit from the Section 4(q)
estate duty deduction in the Estate Duty Act and the donations tax exemptions of
the Income Tax Act.
It is important to understand the legal implications of marital property regime,
especially when drafting a Last Will and Testament and also when entering into a
marriage – as which regime the estate planner chooses, is going to affect his assets.
Assurance Policies
Understanding long term financial needs allows the estate planner to plan for them.
Proceeds from life insurance policies can be used to:
n Replace income that the estate planner would have generated to maintain
his spouse or dependants while he was alive.
n Pay estate expenses: funeral, income tax, estate administration, estate duty.
n The estate planner should try to balance affordability with his beneficiaries’
anticipated needs. Examine debts, income needs, expected future expenses.

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