Not legally married? How does this affect your estate planning?

One could argue that the law and the administration of “life” lag far behind the evolution of humankind, resulting in a society governed by outdated laws and rules. A client of mine was recently left in a predicament after losing his partner of 22 years. The red tape and legal complexities surrounding the administration of a deceased estate, especially for an unmarried partner as opposed to a legal spouse, served as a stark reminder of the importance of organising one’s affairs at every stage of life.

It often happens that unmarried couples mistakenly believe they are protected as “common law” spouses and, as such, are afforded the same level of protection as married couples regarding inheritances and taxes. However, South Africa does not recognise the concept of a common-law marriage. Simply living with a partner for an extended period, even with children, does not necessarily lead to financial protection.

Although civil marriages are the most common form of marriage in South Africa, customary marriages, religious marriages and civil unions all carry most of the same protections and financial benefits as a civil marriage. However, many South Africans live together under the implicit assumption that their years of partnership and cohabitation mean they will enjoy the same rights and protections afforded to married couples. This is simply not the case.

At the heart of the matter, if you are not married and do not have a cohabitation or universal partnership agreement, you and your partner are not legally entitled to any share of each other’s estate, either upon separation or death. Even during the relationship, an unmarried couple will not receive the same benefits as a married couple unless a written agreement proves they are life partners. This means, for example, that donations tax applies to donations between partners, any assets received in a will from one partner will be liable to Capital Gains Tax and estate duty, and any inherited properties will have transfer duty levied on them.

Unmarried partners also cannot inherit as intestate heirs under the Intestate Succession Act or claim maintenance from the deceased estate of their partners, even if they are life partners. Although maintenance for children can be claimed, provided the child is born of the union between the couple, this can often be inadequate to fully provide for a partner and their children, especially compared to the maintenance provided to married couples.

What should you do?

If you and your partner do not wish to marry, there are ways to ensure that both parties are protected financially. This can be done by drawing up a will or entering into a formal agreement or contract between the parties. Without such protection, your partner may not benefit from any assets you leave or even be able to stay in the home after your death.

Since 2012, there have been some important developments in South African law, particularly with the Butter’s case. An exception to the above safeguarding rules is if your relationship can be defined as a universal partnership. However, the commencement of a relationship does not automatically mean that a universal partnership exists. Neither does living together or having children together constitute a universal partnership.

A universal partnership exists only if both parties can prove that the purpose of their relationship is to pool their assets and resources for mutual benefit, specifically to make a profit. There must also be an intention to form a universal partnership. Proving the existence of a universal partnership without a signed document is possible, but it involves a lengthy court case and requires substantial evidentiary support, which is costly and time-consuming. Therefore, if you are in a long-term relationship and do not wish to marry, it is crucial to formalise your financial arrangements in a written agreement.

Ultimately, if you choose not to marry, taking proactive steps to safeguard your and your partner’s future is essential. By understanding your legal standing and ensuring proper estate planning, you can avoid unnecessary complications and ensure that your partner is cared for in the way you intend. – IOL

* Rouchos is an estate planning consultant to Hobbs Sinclair.