Death- can kill you
For many years, this rather painful niche was exploited by the unscrupulous in our society, but legal restrictions have come in to play and it has become fairer to die. In this chapter are some of the questions you need to ask anyone trying to sell you a policy.
Death is a subject that nobody wants to talk about, but death is a part of life. Death can bankrupt a family. For many cultures, a funeral is a vitally important thing. Strictly, you do not, legally, own your own dead body and, therefore, cannot specify what should happen to it. However, it is very rare that the state refuses to allow you to have the funeral and management of your remains as you wish. Either use your living will or your will to make your funeral wishes clear. It is most likely, that your executors and relatives will carry out these wishes out. For some culture, money has to be spent and a loved one has to be sent off in style. This has spawned a major funeral policy business. For many people a funeral policy very good way to save money for what can be a very expensive undertaking.
Here is what various policies have to offer.
Look at any funeral policies, and decide who needs to claim the benefits and arrange the funeral.
If you are not sure what your loved ones want for a funeral it would be good to discuss this and possibly even create a letter of wishes or a living will. While for many this is an uncomfortable discussion, it gives the family comfort instead of the arguments that will follow a death, which often break up the family. Questions to be answered should include whether there will be:
Discussions should also cover topics such as:
The Funeral Home will assist with all funeral preparations. However a family should meet with the Minister (Religious Leader) who will be conducting the funeral or memorial service, to discuss the service details and hymns, and participants in the service (eulogies/tributes and readers), as well as arrangements for the coffin to be brought into the church (placed in front beforehand, or in procession with Minister and Pallbearers), and taken out afterwards (usually in procession).
A coffin will need to be selected. This is required for burial and cremation (even a private cremation, for which a simple unpainted chipboard or cardboard coffin will suffice).
The funeral director may help in arranging optional services (which can be arranged either by the Funeral Director or the family and friends). These include placing of press notices, ordering of flowers, and printing of leaflets, and arranging for a post-funeral catering after the service. A wake or reception can be at the funeral/memorial service venue (adjacent hall), or a restaurant, hotel or private club, or the home of family or friends. The Funeral Director will also have contacts in catering.
If the Funeral Director or a printer will be preparing a leaflet, the content needs to be given in good time. Donations (in lieu of flowers) to a charity or organisation can be included in the press notice and leaflet or on the social media platform. If you have a family member who has died then enlist the help of friends and family, or a Church hospitality group in all the arrangements, don’t try and do it alone.
A hospital death is the easiest death if you have insurance. You simply contact a Funeral Director – he/she will advise you on procedure.
The Funeral Director will collect the deceased from the hospital.
Many large Government hospitals appoint a Funeral Director (on a tender basis for a period) to remove/collect all the deceased (unless special arrangements are made with the Ward Sister). However the Funeral Director chosen by the family can normally collect the deceased from the hospital’s Funeral Director at no charge (within 72 hours). The hospital will issue the Notification of Death (In South Africa this is DHA 1663) to the family’s Funeral Director, as well as a Medical Certificate for Cremation (Form B), if required.
Remember you will have to collect the personal belongings at the hospital.
A home death
Contact the family Medical Doctor (GP) – at whatever time of day or night. Many doctors have an ‘on call’ roster with other doctors for after-hours service. If a doctor is not available to come to the house, contact companies such as Netcare 911 or ER24. They will determine if the death is natural or unnatural, and (if natural causes) will issue a Declaration of Death (DOD) form.
South Africa
In South Africa, the medical service used will usually call the SA Police Service (SAPS) to come and confirm that death if by natural causes. The SAPS officer needs to issue a SAP 180 form. The Funeral Directors can then be called to collect the deceased.
You will have to contact the Funeral Director or your funeral insurance contact number, who will advise you on procedures. The Funeral Director will remove/collect the Deceased and liaise with the Medical Doctor.
Copies of the DOD and SAP 180 forms, if obtained, should be given to the Funeral Director, who will forward copies to the family Doctor or specialist, who will be issuing the Notification of Death (DHA 1663).
DOD and SAP 180 forms, together with the Medical Certificate for Cremation (if applicable), will be collected by the Funeral Director when ready – which may be a day or two later
If the deceased was an outpatient of a hospital or day hospital or clinic, the Funeral Director will need to take the deceased’s hospital card together with the DOD and SAP 180 forms to the hospital, and request a DHA 1663 (Notification of Death form) and a Form B for cremation (if required).
Should the person pass away at home and it appears that there has been a forced entry, or there is evidence of unnatural causes, or you consider something suspicious has happened, call 10111 or your local SA Police Services. They will arrange for the removal/collection of the body to the nearest State Mortuary (run by the Provincial Department of Health). It is likely that a post mortem examination will be performed by a Pathologist (usually from the local university medical school). The Department of Health will issue the Notification of Death to the Funeral Director or your representative, signed by the pathologist who performed the post mortem (autopsy), or was satisfied that death was by natural causes (without a post mortem). If required, the Pathologist will also issue a Cremation Certificate(s).
A Funeral Director is often the first point of call as they will advise on the procedures involved and who will also liaise with the correct authorities. You must obtain the DOD and SAP 180 forms, and hand these to the Funeral Director, as well as the hospital outpatients card (if applicable), and the deceased’s ID book/card or a copy.
The Funeral Director may then remove/collect the deceased to their private mortuary.
In all cases where the deceased has been taken to a State Mortuary, the Next-of-Kin will need to go there and identify the deceased, and take their and the deceased’s ID document to show the official. If the Next-of-Kin wishes to delegate the identification of the deceased to another family member or associate, he/she will need to write a letter authorising this person to do the identification on his/her behalf. The official will then issue a letter to the person, authorising the removal of the deceased. This, and the deceased’s ID document, needs to be handed to the Funeral Director, who will liaise with the State Mortuary to find out when the deceased will be released, and can be collected – which will be after the post mortem (if performed).
If death appears to be from natural causes, call the family Medical Doctor. If the doctor is not available, call the Paramedics and Police (as described above). In all cases where there is no family doctor, and the deceased was not an outpatient of a hospital or clinic, or there is no medical history, the SA Police Service will need to be called, and the deceased taken to the State Mortuary. If there is no suspicion of unnatural causes, the family may be asked to give the medical history of the deceased to an official at the State Mortuary, who may decide that a post mortem examination is not necessary.
The Funeral Director will then need to meet with the family to attend to the following:
The Funeral Director will provide the original and five certified copies of the Death Certificate. (More copies can be requested).
Completion of the Application for Cremation (if applicable), signed by the family representative, and attested before a Commissioner of Oaths (at the Funeral Director’s office), as well as instructions concerning the cremated remains (Ashes).
The living must not neglect their own health while dealing with the death and arrangements for the funeral – you need all your strength for the practical arrangements.
If there is no spouse, then arrangements need to be made for the pets. Consider arranging for the pets to see (and sniff) the body of the deceased after death, so as to understand that they have not been abandoned by the deceased. For the pets it is also a huge loss and they can comfort you. Be aware you may need the advice of a professional such as a therapist or bereavement counsellor. Ask for help. Get support from family and friends
The Estate of the Deceased needs to be reported to the Master of the High Court within 14 days from the date of death. There is a Death Notice form, a form which details the deceased person’s assets and liabilities, and (if there is no will) a form showing the close family tree (for intestate succession). These forms, together with the original Will, and a certified copy of the Death Certificate, need to be submitted to the Master.
Once you have found the Deceased’s will, establish the name of the Executors and contact them to advise on the death of the Deceased. The appointment of the Executors needs to be confirmed by the Master of the High Court.
If the Executors do not have the experience or professional competence to wind up the Deceased Estate (e.g. family members), they can appoint an administrator (who may be an attorney or accountant, or other professional) to act on their behalf (with a power of attorney).
A Power of Attorney given by a person ceases upon death. Thereafter the affairs of the Deceased can only be conducted by the Executors (or their appointees). In the UK a grant of probate will be given or letters of administration issued, if no will is found
After death the Deceased’s bank accounts are frozen. This is usually effected by the Executors, but may be done by the bank, if it hears about the death. (If a family member with access to the Deceased’s bank account, pays medical, funeral or other bills after death, he/she needs to be able to account to the Executors).
If no Executor has been nominated in the Will, then the next-of-kin or close family members can propose suitable persons to the Master. An Attorney, Accountant, trust administrator or suitably equipped relative are options. Sometimes there can be disputes over money or possessions. Death can bring out the worst in people. Be prepared for this and appoint an executor that is able to manage difficult persons.
South Africa
For the small estates worth less than R250 000 are administered under Section 18(3) of the Estates Act – a simpler process. The estate needs to be reported to a local magistrate’s court and a nominated Executor or other suitable person needs to apply to and be appointed by the Master to do this.
Once the Death Certificate has been issued, the family should advise the nominated Executor or Estate Administrator of bills that need to be paid, bank accounts to be closed or debit orders stopped –these costs would include, life insurances, medical aid, cellphone, mortgage bonds, household and car insurance, the bank.
The family or the executor must notify the Deceased’s Financial Advisor, stockbroker, etc. and cancel the Deceased’s driver’s licence, TV licence, email, social media and website accounts. They should also notify any memberships of clubs and organisations of the situation.
If there is a will, then the estate has to be treated as the will directs, unless the master of the high court or other relevant official directs otherwise. Wills can only be executed as per the terms contained in the signed and witnessed document. Some of the greatest and most enduring unhappiness in family circles has been caused by inappropriately or incorrectly drafted Wills. Unless the will is simple, it is advised to go to an estate specialist and not just a normal attorney to get the will drafted. The will should ideally be reviewed every year. If you have named children and grandchildren then please remember the new babies. You do not want to be hated after death because you forgot the latest addition to your family. Other situations which should have the will dusted off include remarriage and divorce. Remember if there are minor children or grandchildren, you should set up a Trust for them in your Will and in this way you make sure that they are financially cared for and have access to funds for their maintenance after your death.
Once a person dies, their assets are frozen and cannot be dealt with until, administration letters or a grant of probate (UK) is received and an administrator or an Executor of the estate appointed.
This delay is shortened if you have a Will appointing an executor. You can appoint your nearest and dearest wife or spouse, but be warned if the amount going to them is more than they would get in an intestate estate they may be disqualified. If you do appoint a person you know as executor do give them the power of assumption and release them for posting security for the estate, also allow them to claim for reasonable costs.
A separate will should be created for each country you have assets and property in, but be careful, do not state in any will you create, that this one is your last will and testament, if you want another will to have power. The will you write that phrase in, has to replace all the other wills.
In wills we often find conditions are placed. The will directs that “so and so” will get part of the estate or an asset if “such and such” is done. We call these clauses either resolutive or suspensive. In a suspensive clause there is no vesting of the legacy in the legatee, if the condition is not fulfilled. In other words, if the heir has to get married to receive the asset, then the asset cannot be released by the executor, until the marriage is registered. If the marriage is not registered by the time of the estate finalisation, the heir will not receive it. In this case a substitute heir must be named to receive the asset or the condition becomes void. In the case of a resolutive condition the legacy will vest immediately on the death of the testator, but it will terminate on the condition being fulfilled. In other words if the asset can be released by the executor, it will be done when the marriage is registered and the condition of vesting is complete. The estate cannot be finalised until the vesting is done.
How you are married will affect the will and how you can leave your property. In some countries such as the UK, an existing will can be cancelled on marriage. If the married person dies without a new will the law of intestacy decides the way the estate is left. There are rules as to who can administer the estate of someone who has died intestate, and to whom it is distributed. Intestate means that you die without a will. In an intestate estate the assets will first go to pay costs and charges. Taxes are deducted and the balance of the estate (the residue) goes to the family, in the following order.
The spouse gets a defined portion first, then natural or adopted children are considered. If the children pre-decease the person, the estate will pass down to their children, grandchildren and so-on. Without a spouse or children to consider the estate then flows backwards to the deceased’s parents. The estate residue will go to the deceased’s surviving parents and then flows through the parents down to the full brothers and sisters or their children and grandchildren etc., who will receive the residue of the estate. If the deceased does not have a full blood sibling then half brothers or sisters will be considered in the same way. If the deceased is a single child, and parents are dead, then grandparents are brought into the line and through that line, the uncles and aunts of full blood considered with the estate flowing down to the descendants of deceased Uncles and Aunts. Failing the full blood uncle and aunts then Uncles and Aunts of half-blood and their descendants, will be considered and failing them the state may receive the residue.
If two people get married in community of property, the legal effect is that the spouses' separate estates are joined to form one joint estate. All assets which were owned separately by each spouse prior to the marriage become part of the joint estate. The same applies to liabilities. All assets acquired and liabilities incurred, after the date of the marriage, would also belong to the joint estate. At divorce or death the estate belongs in equal shares to the spouses (50/50). On death the estate of both spouses is frozen and then has to be divided 50% according to the will or the intestate rules if there is no will and other 50% to the surviving spouse.
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Tammy and John were both in their second marriage. They got married in community of property. Both had children from their first marriages. John’s children were particularly hateful to their new step mom whom they believed had been instrumental in breaking up their family. A year after the marriage John died of a heart attack. Tammy was devastated but worse was to come. John was shown to have died intestate, as the only existing will found, was not drawn up according to the Will act. The couple had bought a house together, which on John’s death was paid off in full by his life insurance. The Intestate Act meant Tammy got R250 000 of John’s estate. In effect this meant Tammy now only owned 75% of her home as John’s children now owned the other 25%. |
South Africa and Protection from Creditors in a community of property estate.
In 2003 by the Supreme Court of Appeal ("SCA") in the case of Du Plessis v Pienaar NO and Others. In that case the SCA held that when a joint estate is sequestrated, both spouses become insolvent debtors for the purposes of the Insolvency Act 24 of 1936. The spouses' undivided interest in the joint estate as well as any separately owned property will be used to meet the claims of the creditors. It is submitted the same would apply even if there were no insolvency – creditors can claim any property belonging to either spouse. A marital exclusion clause in a testator's will can protect an inheritance from a claim by the beneficiary's spouse but not from a claim by any creditor of the joint estate.
This point is important as a testator cannot stop the process by stating the proceeds of the estate may not be used for a creditor requirement. If such a situation is in place, the best bet in a will, would be to create a trust for the beneficiary, but to allow trustee discretion for the amounts to be paid to the insolvent, or the partner of the insolvent, married in COP. If you leave the proceeds of the trust to the person by name, it is an entitlement and as such allowed to be attached by the creditors.
Antenuptial contracts (ANC) without accrual.
I would definitely not use a joint wills in this type of a married situation. If two people get married in ANC without accrual, the legal effect is that the spouses' separate estates continue to remain separate estates. Nothing can change this situation unless the marriage was before 1984 and in South Africa. In such a case the woman may have a claim on the other spousal male estate assets. Such a claim is due to the fact that women at that time, were often subject to this ANC regime, meant to prevent a woman from having a claim against the male partner’s estate. A south African female before 1984, was subject to a male parent or husband giving permission for her to open a bank account or own property. Often at divorce or death the woman was left destitute as she had been a housewife and accumulated no assets in her own name.
The partner estate cannot be attached under an ANC without accrual, even if the spouse is insolvent or in debt. In an "accrual marriage" any inheritance or legacy is excluded from the accrual anyway, unless the parties agree otherwise.
Antenuptial contracts (ANC) with accrual.
If two people get married in ANC with accrual, the legal effect is that the spouses' separate estates continue to remain separate estates until death or divorce, when they become one estate and are split equally, subject to the stipulated exclusions and the value at time of marriage. If couples use this regime, we normally tell them to stipulate they exclude retirement funds, inheritances and the proceeds of such inheritances or winnings. Most couples at marriage merely declare their assets which often are negative due to the debt of cars or homes. A negative value is reflected as 0 in this estate calculation. In an "accrual marriage" any inheritance or legacy is excluded from the accrual anyway, unless the parties agree otherwise, but the proceeds (any positive returns) of the inheritance will be included in the joint estate.
Divorce.
Countries vary in how they treat divorce in a will. Some countries will give a grace period to the testator which effectively will dis-inherit the ex-spouse. This can mean the person dies intestate, as the will leaves everything to the spouse, and the spouse may not receive it due to the divorce. Sometimes this can create a partial intestate situation in the will for the same reason.
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South Africa The Wills Act No. 7 of 1953 Section 2B of the Wills Act No. 7 of 1953 (“the Act”) reads as follows: “Effect of divorce or annulment of marriage on will.—If any person dies within three months after his marriage was dissolved by 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 his 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 marriage.” In other words after a divorce, a South African resident will have three months to draft a new will. After three months it will be assumed the deceased intended the ex-spouse to inherit. |
Mirror wills are written by husband and wife, and the wishes of each 'mirror' those of the other. They are a bad idea, since they can be revoked by either party without the other person’s knowledge or consent.
The Matrimonial Property Act (Act 88 of 1984) provides for certain exceptions to a community of property or ANC with accrual by stating that the following assets and liabilities do not form part of a joint estate:
Bequests in a will which are subject to a marital exclusion clause, are excluded from a joint estate and protected from a claim by the beneficiary's spouse. If the marital exclusion clause is not inserted in a will, any bequest to a person married in community of property, will form part of the joint estate and be shared with the beneficiary's spouse.
When you give specific “gifts” or inheritances, they are deemed to be free of inheritance tax. Look at the example below. In this example the brother, Johnny, is given a bequest of $40 000. Johnny will receive the full $40 000 if that sum is in the will. The wife will get the rest of the estate only after any taxes, bills and other costs are paid. That means if tax or any other costs is due on your estate, it is paid using the money and assets that you have not already given away (your “residual estate”). This situation can deprive those closest to you by making gifts to less important people.
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Estate |
$80 000 |
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Bequests |
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$40 000 |
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Funeral cost |
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$5 000 |
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Tax outstanding |
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$15 000 |
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Outstanding loans |
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$15 000 |
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Administration Fees |
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$1 000 |
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Estate residue (to wife) |
$4 000 |
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A will that gives an amount to any person needs to be reviewed at least annually as situations change. A will that relies on external factors, such as life insurance, should also be drawn up by a financial planner with an estate attorney. Even when a will seems to be well thought out, bequests can still leave the vulnerable at risk. Our next cameo illustrates the need to have a full picture and an understanding of the law.
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Tim (the deceased) had private insurance to cover the mortgage on two homes. In his will the holiday house was left to the children of the first marriage. These children were aged 18 and 20. Both were at university. Tim was paying maintance for both children. The house had a substantial bond on the property. The present wife and children would then have the house they were staying in and a small cash amount from the existing life insurance as well as certain investments. Tim’s intention was his life insurance would pay for his bonds on both the houses. This condition of the life insurance payment, was not stated in the will.
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