By: Capital Legacy
While no one likes to dwell on their end of life, it is an inevitability, which is why having a last will and testament is crucial. This helps ensure that loved ones who are left are able to handle your personal responsibilities and wishes in the ways that you would want them to. On the other hand, without a valid, up-to-date will, things may not turn out as you would have liked them to.
For this reason, understanding your country’s inheritance laws is important, as this will help you make informed decisions when deciding how your estate should be divvied. Surprisingly, not all countries share the same rules, and some even have some unusual ones, which require sensitive handling.
In South Africa, for example, we have freedom of testation, which means we have the freedom to bequeath our assets as we choose. However, if no will is in place, affairs fall into the Intestate Succession Act, which means your estate will be divided according to a set legal formula.
The US is another one of the few countries where there is no forced heirship. Unlike many other nations, as a legal concept, forced heirship is almost non-existent over there, with the exception of Louisiana. As such, most people in the US can distribute their assets in any manner they see fit, irrespective of whether they have descendants.
In other countries, inheritances are handled differently. For example, in all Muslim-run countries, Islamic or Shari’ah law is applicable, meaning intestate succession is governed by Islamic principles. This means there are specific rules guiding the distribution of assets among beneficiaries based on the relationship between the deceased and the heirs, which may differ from common law systems.
Nepal is another country that has a unique provision in its intestate succession laws. If an individual dies without a will, their property is divided equally among their children. If a child has died before the parent, the share will be passed down to the grandchildren (in the case that the child who died has children), rather than being redistributed among the surviving offspring.
South Korea, on the other hand, has a system that divides assets not only among direct descendants but also among extended family, including siblings and nieces or nephews. This is a significant departure from certain other jurisdictions where the primary focus is on direct descendants alone.
Restrictions on distribution
In Sweden, there is a “maintenance portion” law, which means that even if a person writes a will, a certain portion of the estate has to go to the surviving spouse and children. It is the same in France where the system of forced heirship sees the deceased’s children being entitled to a minimum share of the estate. This minimum share is generally between half and three-quarters of the estate (depending on the number of children who survive their parents).
Andorra adopts the same law, where there are restrictions on freedom of disposition. There are two important compulsory restrictions on testamentary freedom in the country. First, a quarter of the deceased’s estate has to be transferred to their children, and in the case where no children exist, to their ascendants. In addition, a quarter of the estate must be transferred to a surviving spouse if the said spouse does not have enough money or resources to maintain their standard of living.
Half and half
Singapore’s approach to intestate succession is a unique one, because the estate is divided between the spouse and parents, with the spouse receiving half and the other half being divided among the parents.
Until recently, inheritance laws in the UK were subject to primogeniture, meaning the eldest son inherited the estate in its entirety, excluding younger siblings, irrespective of gender. This has been reformed in recent years to facilitate a more equitable distribution of any inheritance among siblings. Moreover, these days, if no will exists, UK laws distribute the estate between the immediate family members, including the spouse, children, grandchildren, and great-grandchildren, regardless of gender.
India’s Hindu Succession Act of 1956, which applies to Hindus, Buddhists, Jains and Sikhs, also introduced dramatic changes to the way property is distributed. It granted equal inheritance rights to daughters, which was a major departure from traditional Hindu succession practices in which sons were favoured.
Finally, Africa, with its many cultures and customs, has laws that vary from country to country. In some African nations, customary law governs inheritance, with complex inheritance rules that change from one region to another. In most cases, the laws prioritise the needs of the community and family over individual ones.
In short, no two places are the same, and understanding your country’s inheritance laws is important. To ensure that loved ones are well looked after when you die and to enable them to move on without the stress that winding up an estate can cause, bring in a professional company to assist you with getting your affairs in order, or speak to your financial adviser.
Capital Legacy is the wills and estate expert.