Where did the name "Real Estate" come from?

Anyone familiar with estate law?

• My mother's husband died last month. His will was kept by ABSA. He had no debt - what little he had was covered by life insurance. Their house was in my mother's name (passed to her when my dad died). ABSA, somehow figures that my mom has to pay R40 000 towards the estate. They gave her 8 months to come up with the money or, so they say, they're going to sell the house. Is it really that easy? Can they just take my mother's house? Is there a way around this? Can we declare the estate bankrupt or something? My mother consulted an attorney, but he was absolutely no help what-so-ever.

• Answer:

  If your mother and step-father were married in community of property then your mother is also liable for 50% of the debts in his estate and he was a co-owner of everything in her estate meaning a half share in the house would be in his name and thus able to be used to satisfy any outstanding debts owed - despite it being registered in your mothers name only. If they were married out of community property then there should be no reason at all why she should be liable for any debts at all - even executors fees are supposed to be paid out of the estate. The amount claimed may have something to do with estate duty (a tax on the value of a persons estate after their death). if the estate had a value of over R3.5million then estate duty would be payable on that amount of the estate that exceeds R3.5m at a rate of 20% (steep I know) - this could account for the monies claimed by ABSA. If there is insufficient cash residue in the estate to satisfy the amount owed to SARS then the house will have to be sold in order to come up with the funds. There is also an additional tax that can be levied - Capital Gains Tax levied at a rate of 10% on a capital gain. This would be an additional tax levied on the estate (although there are allowances and deductions available). If the value of the property transferred exceeds a certain value CGT will also become payable. Also, transfer duty (a tax on the transfer of property from one person to another ranging from 0% - 8% of the property value) will also be payable. this amount is usually discharged by the estate but if there are insufficient funds in the estate to do so, the property may have to be liquidated. This means that an executor may require additional funds to be advanced by the beneficiaries in order to give effect to the provisions of the will. (If there is transfer duty then there will also be conveyancing fees involved which are an addition cost involved and may amount for a significant portion of the amount required by ABSA to wind up the estate). As Im sure you'll agree the taxes alone could easily amount to R40 000. There is another aspect - depending on the terms of a will, people are sometimes required to "collate". This means that whatever amounts they received during the deceased life have to be repaid to the estate in order for the entire estate to be distributed in accordance with the provisions of the will.This is very unlikely because most wills remove the legal requirement forcing beneficiaries and heirs to collate before they can inherit. Another aspect could be that your mother stood surety using the house for a debt incurred by her husband. In this instance if the estate is not sufficiently solvent to satisfy that debt then a creditor could collect against that surety and the house would have to be realised in order to do that unless the amount was paid by your mother. However, if your mother and her husband were married OUT of community of property then the property, and in the absence of any surety, ABSA will NOT be able to collect against the house simply because there is no legal connection allowing them to do so. If you have any other questions you can email me on [email protected].