In community of property marriages, spouses often combine their estates, or mass their estates, to ensure that certain assets go to specific beneficiaries. This is done while still ensuring the surviving spouse’s welfare and protecting assets from being misused after the first spouse passes away. This article will explain the necessary conditions for this estate combining process.
Section 37 of the Administration of Estates Act (“the Act”) defines massing as when two or more people combine their entire joint estate or a specific part of it. They do this by leaving the combined estate to chosen heirs in a mutual will. The surviving spouse benefits from this joint estate, provided they accept it. However, there’s a presumption against massing which can be challenged. To avoid confusion, the will must clearly state the intention to combine estates and override this presumption.
Requirements
The following requirements must be met for massing to occur:
- There must be two or more persons as parties to the mutual will.
- The parties must make a mutual will (a mutual will is a joint will in which two or more testators have mutually benefitted one another in the same document).
- The parties must mass the whole or part of their separate estate assets into a consolidated unit, and this unit must be disposed of in the mutual will.
- The mutual will must grant the survivor a limited right in respect of any property which has been massed.
- The disposition of the massed estate must take place sometime after the death of the first dying.
- The survivor must adiate (accept) on the death of the first dying.
Limited interest for the survivor
The mutual will must create a limited interest in favour of the survivor over the assets disposed of by the deceased and survivor in their will. The limited interest can be created by granting inter alia a usufruct, fiduciary interest, or income beneficiary under a trust. Should the mutual will not contain the limited interest, massing will not occur.
Adiation and repudiation
The survivor is under no obligation to accept the terms of the mutual will. The survivor may elect to either adiate or repudiate the mutual will. Adiation means that the survivor has accepted the terms of the will as willing to abide by those terms. Repudiation means that the survivor has rejected the terms of the mutual will, and the effect is that the survivor will retain their own assets but will not be entitled to any benefit from the deceased estate. However, repudiation does not restrict the survivor’s right to claim for maintenance from the deceased’s estate. Should the survivor exercise their right to either adiate or repudiate, the survivor cannot at a later stage revoke the election.
A will needs to be drawn up clearly and concisely to reflect the true intention of a testator.
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