Article written by Megan Brook, Candidate Attorney, checked by Simone Jansen van Rensburg, Associate and released by Kerry Theunissen, Senior Associate at Schindlers Attorneys
‘Massing’ is a useful estate planning tool, especially for those who are married (regardless of their marital regime). There are, however, legal requirements which must be met in order for there to be successful massing. This article will explore those requirements as well as the difference between common law and statutory massing.
Section 37 of the Administration of Estates Act No. 66 of 1965 (the “Act”) states as follows:
“If any two or more persons have, by their mutual will, massed the whole or any specific portion of their joint estate and disposed of the massed estate or of any portion thereof after the death of the survivor or survivors or the happening of any other event after the death of the first-dying, conferring upon the survivor or survivors any limited interest in respect of any property in the massed estate, then upon the death after the commencement of this Act of the first-dying, adiation by the survivor or survivors shall have the effect of conferring upon the persons in whose favour such disposition was made, such rights in respect of any property forming part of the share of the survivor or survivors of the massed estate as they would by law have possessed under the will if that property had belonged to the first-dying; and the executor shall frame his distribution account accordingly.” [own emphasis underlined]
Put simply, massing occurs when two or more people join their estates (or a portion thereof) and bequeath the massed estate (of both the deceased and the survivor) to an heir or heirs nominated in a mutual last will and testament, subject to the survivor obtaining a benefit from the massed estate.
Importantly, upon the death of the deceased, and on condition that the survivor ‘adiates’ (or accepts), the administration of the estate will involve the joining of the assets and liabilities of the survivor and the deceased, which are then jointly bequeathed to the heirs as though the survivor has died.
The benefit that the survivor obtains must be a limited interest over the assets of the survivor and the deceased. Examples of limited interests include a usufruct, fiduciary interest or the survivor being named as an income beneficiary under a trust. Should a limited interest not be created, there will not be statutory massing but rather a donation by the survivor.
In practice, massing is most common in instances where spouses who are married in community of property want to benefit their children but, at the same time, want to provide for the maintenance of the surviving spouse. Instead of becoming entitled to the half share of the community estate due on the dissolution of the marriage (by death), the survivor obtains a limited interest over the joint estate. In this way, the children obtain ownership of the joint estate assets, and the welfare of the survivor will be catered for.
Massing is also an option for estate planning for couples who are married out of community of property or instances where parties are not married or related but wish to create a massed estate.
There is a rebuttable presumption against massing and, thus, a clause in a mutual will which makes provision for massing must be stated clearly and concisely in order to ensure that the presumption does not apply.
Basic requirements of statutory massing
In order for massing to be present, the following requirements must be met:
- the first dying testator must have died on or after 02 October 1967, being the date on which the Act came into operation;
- the mutual last will and testament must make provision for the massing and joining of the respective estates;
- the mutual last will and testament must make provision for a bequest of the joined assets of the deceased and the survivor;
- a limited interest must be created in favour of the survivor; and
- the survivor must formally, and in writing, adiate (or accept) the conditions of the mutual last will and testament.
An adiation certificate must be signed by the survivor, as well as witnesses, and contain the following:
- a declaration that he/she is aware of his/her rights to adiate or repudiate (reject) the terms of the mutual last will and testament;
- an affirmation that the legal implications of adiation and repudiation have been explained to him/her and that he/she understands the consequences thereof;
- an express provision stating his/her desire or wish to adiate;
- reference must be made to the provision of the mutual last will and testament which provides for massing as well as a description of the assets subject to the massing; and
- an acknowledgement that the decision cannot be changed.
In addition, a signed declaration by an attorney must appear at the end of the certificate. This declaration must state that the attorney explained the legal consequences of both adiation and repudiation to the survivor and that the survivor declared that he/she understands the consequences of his or her actions. Further, that the survivor has, with all this knowledge, elected to adiate to the terms of the mutual last will and testament.
Repudiation by the survivor means that the massing contemplated by the first dying fails. The survivor is under no obligation to accept the terms of the mutual last will and testament, especially since that means losing ownership and future testamentary rights to his/her own assets.
Where spouses married in community of property have massed their estates and the survivor repudiates, the survivor will be entitled to retain his/her half of the community estate but will not be able to benefit in respect of the deceased’s assets under the mutual last will and testament in terms of which massing was created.
The deceased’s assets will then be distributed amongst his/her heirs in terms of the last will and testament. If the terms of the mutual last will and testament fail entirely due to repudiation, the estate will devolve according to the intestate laws of succession.
A repudiation certificate must comply with the same requirements as an adiation certificate as outlined above, however, the terms of the certificate will refer to repudiation and not adiation. Despite the survivor repudiating the benefits in terms of the mutual last will and testament, he/she is not precluded from noting a claim for maintenance against the deceased’s share of the estate.
Common law massing
Common law massing is similar to statutory massing; however, the survivor is not granted a limited interest in the massed asset(s). Common law massing occurs when two or more persons mass their separate estates and dispose of the massed estate without granting the survivor a limited interest in the massed assets. An example would be if a married couple conclude a mutual last will and testament stating that on the death of the first dying of them, the survivor inherits the marital home while the residue of the massed estate passes to their children.
Massing has proven itself to be a useful legal tool, most commonly in cases where one fears that their spouse will dissipate the estate which the first dying had hoped would benefit the children of the marriage. It has also proven useful in situations where the first dying wants to avoid their survivor’s new spouse benefitting from their joint estate.
As is noted from the above, it is a prerequisite that the surviving spouse receives a limited interest in the massed property in order for there to be statutory massing and the survivor has to formally adiate to the terms of the mutual Will.
This article briefly explores the estate planning tool of massing.