Common Misconceptions of Permanent Life Partnerships
- 9th December 2020
- Posted by: Wealth Succession
- Category: Estate Planning
For many people, love, laughter and happily ever after can exist without the big white dress and the church bells ringing. In fact, for many modern couples, living together as man and wife no longer requires a formal marriage being entered. Whether you know couples like this, or whether you yourself are in this type of life partnership, we all know the philosophy that lies behind this lifestyle choice: “I don’t need a piece of paper to tell me I love you.”
This bohemian romance comes with its own legal realities. When romance escapes through the backdoor, the parties to this relationship will most likely have to deal with the consequences of failing to put a plan in place protect themselves.
The legal definition and understanding of a marital relationship have drastically changed over the past two decades. Legal consequences are attached to several instances where couples live together permanently. It has become a bit of a legal maze to be honest. The law relating to claims against pension funds, being considered a spouse for intestate succession, or having a claim for maintenance on death of a spouse, might differ from the right to claim typical divorce like settlements from one another. This has led to a few misconceptions, that we will address in this article. This is not to be confused with a sermon in favour of a traditional legal marriage as we used to know it.
If we ever split up – I will take him for every cent he has…
Not so fast.
The popular urban legend that after a couple has lived together as a married couple for whatever number of years, that they are considered by our law to in fact be married for purposes of our marital law, is unfounded. There can be no ‘divorce’ and no splitting the assets in the household as an automatic legal outcome. No magic number of years of cohabitation will improve this reality.
Our law is clear: if you wanted the material consequences of the matrimonial law to apply to your relationship, you should have agreed to and adopted one of the marital regimes available to couples in South Africa.
Therefore, couples who live together in a life partnership does not have any divorce claim on each other’s assets or a responsibility for one another’s liabilities should the relationship come to an end.
Cohabitating life partners can, however, contractually agree on the terms and conditions of their relationship and what the consequences in monetary terms will be, should their relationship (or contract) ever be terminated. The break-up is then treated as the termination of a contract, rather than a divorce in the pure sense. It looks similar, but the legal principles are quite different – a Life Partnership Agreement is based on the principles of the law of contract and not the law of matrimonial property.
If one of us dies – the other will be taken care of
Possibly – but not automatically.
The exact same principles as above prevail. Since the couple are not legally married, the life partner cannot be considered the deceased person’s spouse for purposes of the administration of his or her estate.
While life partners can prove their financial dependency on a deceased to the Trustees of a Pension Fund and thereby succeed in receiving benefits from the said Pension Fund, they are not included into the scope and operation of the Intestate Succession Act or the Maintenance of Surviving Spouses Act.
This means that where a party to a domestic partnership dies, without leaving a correctly executed and legally binding will, the surviving life partner cannot receive benefits from the deceased’s estate as he or she does not fall under the definition of a spouse in terms of the Intestate Succession Act.
Furthermore, such surviving life partner can also not seek relief from the Maintenance of Surviving Spouses Act, because no legal duty to support existed between the partners during their relationship, no such duty can be enforced after the death of one of them.
In October 2020, the court decision in Bwanya v Master of the High Court, Cape Town and Others, opened a pandora’s box of uncertainty when the constitutionality of the definition of a spouse in the Intestate Succession Act was put under the spotlight. Amongst other issues was the fact that parties to a domestic partnership was not on equal footing to those in same sex relationships who did in fact enjoy recognition in terms of the Intestate Succession Act.
In the Bwanya-case, the court found the definition clause of the Intestate Succession Act to be unconstitutional and that this should be rectified to include life partners as spouses to a deceased who passed away without leaving a valid Will.
While this may sound like a big win at first glance, it should be noted that the battle is far from over. To start with, a High Court finding which challenges the constitutional validity of an Act, has no force unless it is confirmed by the Constitutional Court. Therefore… no cigars just yet.
Finally, the legal uncertainty created in this instance will only be challenged for some years to come in more complex estates than that in the Bwanya-case, where the children on the deceased may litigate in order to question the surviving life partner’s status as such. For example, what exactly will the requirements be for a life partner to qualify as such?
Legal certainty? Certainly!
The best way to navigate through these litigious waters, and the only way to ensure that what you envision for your family after your death, actually transpires, is by executing a valid Last Will and Testament.
Whether you want your life partner to inherit or not; whether you consider your life partner to be financially dependent on you and your assets; and whether you deem your assets to be jointly those of your life partner or exclusively yours; you can have the last say in your Last Will.
Having a legally enforceable Will in place will not only give you peace of mind, but also create certainty for your family, your business partners, and your life partner. Succession planning should not be left to chance (or to the hopes of changing legislation).
Neither the law nor the maths should ever by guessed. Get legal certainty and do the maths.
Written by Seugnette Schwim
Wealth Succession Franchise Owner