Spouse inheritance on my death.

O

Oopsie

Senior Member
Joined
Jun 16, 2008
Messages
817
Reaction score
3
Location
Portugal
I have investments and no pension fund and we live off the proceeds and dividends from these investments.
Now I am concerned for my wife should I die. Normally my account will be frozen until the estate is wound up and this could take many months. How would my wife survive as she has rent to pay and food to buy?
 
Emergency reserves? Credit card?

afaik the executor can also advance her cash if its clear that she is entitled to it. i.e. If its like 100% to her or something like that
 
Open a savings account for her?
There are policies that will pay out within a very short time that could also cover things while the estate is being wrapped up.
Main thing is to have a clearly drawn out and defined will to make the process as fast as possible.
 
Rocket-Boy said:
Open a savings account for her?
There are policies that will pay out within a very short time that could also cover things while the estate is being wrapped up.
Main thing is to have a clearly drawn out and defined will to make the process as fast as possible.
Click to expand...
Careful...some places just hold a fire-sale...dump all the assets and then split the proceeds.
 
Oopsie said:
I have investments and no pension fund and we live off the proceeds and dividends from these investments.
Now I am concerned for my wife should I die. Normally my account will be frozen until the estate is wound up and this could take many months. How would my wife survive as she has rent to pay and food to buy?
Click to expand...

If this relates to SA domiciled assets you can donate a portion of your investments to your wife without incurring donations tax. This may also be a good idea for estate duty purposes. You can also save on cap gains tax, if the shares, unit trusts are transferred into her name without selling them first.
 
Life Insurance.

The kind that pays out within 24-28 hours, not the kind that gets wrapped up in the estate.
 
In our case I do the following:
I have life insurance that will pay out fast to her.
She has her own bank accounts
She has access to the bond, so if I die before the bank gets notified she knows to move all the stored money out of there and into her account ASAP.

Curious as to why you have not moved a bunch of your investments into her name purely for tax purposes? My dad did that ages ago with my mom, got enough in her name to keep her just under the tax paying limit and kept the rest in his name. Saved a lot on his tax bill as I understand it.
 
LazyLion said:
Set up a living annuity and make her the beneficiary.
Click to expand...

Bad idea - On death the LA's trustees would have to decide who the dependents are that should benefit from the LA funds. The nominated beneficiaries would not automatically qualify. There will also be a delay, before the trustees finalize the transfer to the beneficiaries - it could take months.
OP's location is portugal, so it is not clear if he is referring to SA assets, a living annuity is an SA product created by our pension and tax legislation.
Withdrawals from a LA are taxable - transferring assets to a LA could result in additional income tax, if the transfer is not tax deductible.
 
Verde said:
Bad idea - On death the LA's trustees would have to decide who the dependents are that should benefit from the LA funds. The nominated beneficiaries would not automatically qualify. There will also be a delay, before the trustees finalize the transfer to the beneficiaries - it could take months.
OP's location is portugal, so it is not clear if he is referring to SA assets, a living annuity is an SA product created by our pension and tax legislation.
Withdrawals from a LA are taxable - transferring assets to a LA could result in additional income tax, if the transfer is not tax deductible.
Click to expand...

Nope.... Specified beneficiary gets it all... and no estate tax, and no additional taxes for the payee under the new regime... Income tax does apply to everybody else though.

  • You are able to control the income that you draw from the annuity every year.
  • You will be able to specify a beneficiary on the annuity. When you die, the beneficiary will have an option to either continue with the annuity or to take the full amount in cash (subject to tax, of course). This can continue indefinitely as the annuity maybe handed down from heir to heir.
  • Any interest from rental income earned within a living annuity does not attract income tax and therefore this is a tax efficient vehicle in which to hold cash.
  • Living annuities fall outside your estate for estate duty and executor’s fees purposes.
  • At a later point in time you will be able to retire from you RA’s and transfer the proceeds into your living annuity.
  • A conventional living annuity is not final unlike another annuities. You can—at a later stage—convert a portion of a conventional living annuity to either a guaranteed escalation annuity or a with profit annuity (see glossary).
Click to expand...

http://mg.co.za/article/2010-07-14-life-annuity-or-living
http://www.fin24.com/Money/Money-Clinic/Retirement/Impact-of-new-tax-law-on-living-annuity-20140806
 
LazyLion said:
Set up a living annuity and make her the beneficiary.
Click to expand...

LazyLion said:
Nope.... Specified beneficiary gets it all... and no estate tax, and no additional taxes for the payee under the new regime... Income tax does apply to everybody else though.



http://mg.co.za/article/2010-07-14-life-annuity-or-living
http://www.fin24.com/Money/Money-Clinic/Retirement/Impact-of-new-tax-law-on-living-annuity-20140806
Click to expand...

This would imply that investments would have to be cashed in to buy the living annuity. I would assume the reason the OP did not purchase an annuity with his investments is because the return is better with these managed assets. There will be costs involved in terms of buying this annuity as well.

It would be far simpler just to give the wife access to OP's cash-based assets, and should the OP peg, then quickly transfer money before banks know OP is dead and executor freezes estate.
 
LazyLion said:
Nope.... Specified beneficiary gets it all... and no estate tax, and no additional taxes for the payee under the new regime... Income tax does apply to everybody else though.



http://mg.co.za/article/2010-07-14-life-annuity-or-living
http://www.fin24.com/Money/Money-Clinic/Retirement/Impact-of-new-tax-law-on-living-annuity-20140806
Click to expand...

You are right about the nominated beneficiaries getting it all - I was thinking about pension funds. There is a tax problem though.
 
Cius said:
In our case I do the following:
I have life insurance that will pay out fast to her.
She has her own bank accounts
She has access to the bond, so if I die before the bank gets notified she knows to move all the stored money out of there and into her account ASAP.

Curious as to why you have not moved a bunch of your investments into her name purely for tax purposes? My dad did that ages ago with my mom, got enough in her name to keep her just under the tax paying limit and kept the rest in his name. Saved a lot on his tax bill as I understand it.
Click to expand...

I can donate funds to her name but I will not save any tax as the gains will still be for my account. This is to prevent tax evasion by splitting funds between spouses.

My investments are in a "Blocked Rand Account" ( for SARB surveillance) with my broker at Momentum and my wife has POA so she has access to the funds. Problem is this:
The money gets channeled to me in Portugal via a Blocked Rand FNB Account. I have to un block the account every time money moves in or out. This I do by email and they phone me to make sure it is actually me giving the instruction. My wife does not have POA with FNB.

My best bet would be to ask FNB for a POA form, sign it and post it back. I don't know if this will work though.
 
Oopsie said:
I can donate funds to her name but I will not save any tax as the gains will still be for my account. This is to prevent tax evasion by splitting funds between spouses.

My investments are in a "Blocked Rand Account" ( for SARB surveillance) with my broker at Momentum and my wife has POA so she has access to the funds. Problem is this:
The money gets channeled to me in Portugal via a Blocked Rand FNB Account. I have to un block the account every time money moves in or out. This I do by email and they phone me to make sure it is actually me giving the instruction. My wife does not have POA with FNB.

My best bet would be to ask FNB for a POA form, sign it and post it back. I don't know if this will work though.
Click to expand...

Never heard of this before, so totally out of my frame of reference.

Although this is a bit conflicting - brokers normally sell insurance policies. Your arrangement sounds rather dodgy, to be honest :wtf:
 
Verde said:
You are right about the nominated beneficiaries getting it all - I was thinking about pension funds. There is a tax problem though.
Click to expand...

You raised a valid point.

Retirement funds (pension and provident funds): death benefits have to be split according to the trustees decision. They make this decision based on evidence of dependents.

General assets and policies: fall into estate and split is decided by will. Executor just gathers and tallies up the assets (and takes a decent slice as well).

Others - certain insurance policies go straight to nominated beneficiaries and fall outside the deceased estate.

Disclaimer: I disclaim actually knowing what I am talking about :)
 
How about a trust and put the investments in the name of the trust. My friend set up everything he owns in a trust and his wife and mother are members of the trust. Not sure how much it costs but definitely worth it to avoid paying taxes etc on death. Costs almost nothing to add or remove members.
 
Splinter said:
Never heard of this before, so totally out of my frame of reference.

Although this is a bit conflicting - brokers normally sell insurance policies. Your arrangement sounds rather dodgy, to be honest :wtf:
Click to expand...

That is how it works pal. If you emigrate, all your banking accounts will get blocked. No way around this believe me. I tried everything. It is done to stop money laundering.
Also, the only way to trade on the JSE is via a broker. You get FX brokers, financial brokers, insurance brokers etc.
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X