De­ceased spouse’s es­tate

Business Day - Business Law and Tax Review - - BUSINESS LAW & TAX REVIEW - RADADHIKA SI­NAY­HAKH

WHEN the Main­te­nance of Sur­viv­ing Spouse’s Act slipped into law in 1990 it at­tracted scant at­ten­tion and the full im­pli­ca­tions of the leg­is­la­tion were not re­alised.

The pro­vi­sion that a sur­viv­ing spouse was al­lowed to claim main­te­nance from the es­tate of the de­ceased spouse was seen as a nec­es­sary pro­tec­tion, usu­ally for a wife, whose hus­band had ex­cluded her from any ben­e­fit from his es­tate. How­ever, the per­cep­tion was that most mar­ried couples would ben­e­fit one an­other in their wills and that few would need to rely on the leg­is­la­tion for as­sis­tance.

What was not fore­seen was that the act could frus­trate the es­tate plan­ning ini­tia­tives of a spouse whose fo­cus was on the dis­tri­bu­tion of his sur­plus wealth to the next gen­er­a­tion or to a fam­ily trust. With the ever-in­creas­ing di­vorce rate, how­ever, the ad­vent of a sec­ond mar­riage has be­come al­most the norm.

It is in this sit­u­a­tion that the pro­vi­sions of the act have dis­closed un­ex­pected re­sults when the in­ter­ests of the “sec­ond spouse” con­flict with the in­ter­ests of the chil­dren from the first mar­riage.

The act en­ables sur­viv­ing spouses, in cer­tain cir­cum­stances, to claim “rea­son­able main­te­nance” from the es­tate of the de­ceased spouse un­til their death or re­mar­riage, in so far as the sur­vivors are un­able to pro­vide for them­selves from their own means. The is­sue be­comes one of amount (quan­tum) and de­pends, among oth­ers, on var­i­ous fac­tors, which in­clude the fol­low­ing.

The net value of the es­tate of the first-dy­ing spouse.

The ex­ist­ing or ex­pected means and earn­ing ca­pac­ity of the sur­viv­ing spouse. The du­ra­tion of the mar­riage. The stan­dard of liv­ing main­tained dur­ing the mar­riage.

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