There are various benefits that a surviving spouse, children and other dependents of a deceased person may be able to claim after the death of a loved one. These benefits must usually be claimed within a certain time after death, and some may even fall away if not claimed on time.
Retirement/Pension Death Benefits
Section 37C of the Pension Funds Act regulates the benefits payable upon the death of a member of a retirement fund and applies to all retirement funds. Including pension, provident, preservation and retirement annuity funds. This section requires a fund’s board of trustees to identify and allocate the death benefits. Before this section, the benefit payable on the death of a pension fund member would take place in terms of their last will or according to the law of intestate succession.
When a member of a fund dies before reaching retirement age, the death benefit (the lump sum payable) must be paid to the member’s dependents and/or nominees. Death benefits are excluded from the member’s estate, and the benefit must be dealt with in terms of the Act. Therefore, the member cannot leave the death benefit to a specific person via their last will. The executor of the member’s estate does not deal with these death benefits except in specific circumstances as provided in the Act.
Government Employees Death Benefits
If you are a government employee and a member of the Government Employees Pension Fund (GEPF), death benefits are paid when a member dies while in service or within five years of becoming a pensioner. The GEPF also pays annuities to qualifying surviving spouses or orphans of members who die while in service or after retiring. The GEPF provides benefits for the funeral of a member or a pensioner, as well as for the funeral of a spouse or eligible child of a member or pensioner.
UIF Death Benefits
Following the death of a contributor to the Unemployment Insurance Fund (UIF), you can claim dependent’s benefits from the UIF if you are a spouse, life partner, child of the deceased contributor or guardian of a child of the deceased. Dependent children of the deceased contributor who are under the age of 21 years are only entitled to benefits. If there is no surviving spouse or life partner, or if the spouse or life partner has not claimed benefits within 6 months of the contributor’s death. Dependents cannot claim death benefits from the UIF if they have received benefits from the Labour Compensation Fund. Dependents must apply at their nearest labour department center in person.
Gap Cover Death Benefits Should Not Be Forgotten
Some gap cover plans pay a death benefit lump sum if the insured member, their spouse or their dependents die accidentally. This death benefit must usually be claimed within 6 or 12 months of the insured person’s death. If you fail to approach and claim the death benefit could actually lapse which would result in any funds due being lost. It is important to keep a life file with all important information stored within to avoid unwanted loss of benefits like this. Some gap cover plans also cover the insured member’s medical aid or gap cover premiums for up to 6 or 12 months after the member’s death.
Labour Compensation Fund Claim
In cases where you die while working, your dependents can claim from the Compensation Fund. The fund pays compensation to permanent and casual workers, trainees and apprentices who are injured or die during their work. Dependents can claim if the deceased person was permanently employed, an apprentice or trainee farm worker, a worker paid by a labour agency or a domestic worker in a boarding house. This cannot be applied if the deceased person was a domestic worker in a private home, a subcontractor or a member of the National Defense Force or Police. Compensation will also not be paid if the accident was reported to the employer more than 12 months after the accident or death or if the deceased unreasonably refused or willfully neglected to have medical treatment.
Maintenance for Surviving Spouses
Within South Africa, the Maintenance of Surviving Spouses Act allows a surviving spouse to claim maintenance from the estate of their deceased spouse for their reasonable needs until they die or remarry if they can’t provide for themselves. To claim maintenance, a surviving spouse must give written notice to the executor of the estate and the Master of the High Court.
Inheritance – Testate or Intestate in South Africa
The beneficiaries of a deceased person’s estate i.e. those entitled to receive an inheritance, are determined by the deceased’s last will or the law of intestate succession if they did not leave a valid will. Where you are named as a beneficiary in a will, or if there is no valid will in place and you are an immediate family member, you may be entitled to claim inheritance from the deceased person’s estate.
When the deceased leaves a valid will, only beneficiaries named in the will may be entitled to a share of the estate. More often than not a deceased person does not leave a valid will – in this situation if you are the spouse or a child of the deceased, you are entitled to a share of the deceased’s estate. This amount due will only be known after all the deceased’s debts and estate expenses have been paid. Where the deceased has no spouse or children and you are a close relative e.g. a sibling or parent, you may be entitled to a share of the estate.
Don’t Lose Out! Ensure Effective Estate Planning
The most important part of your estate plan is having a valid will in place – this allows you to decide how your estate is to be distributed and ensures that your wishes in this regard will be honoured. However, simply having a will in place is not enough to ensure that your loved ones will receive the maximum benefits when you are gone.
An important estate planning tool is a Life File – a document or a folder that contains important information about you, your loved ones and your assets such as properties, vehicles and policies. Having access to this information at the time of your death ensures that your executor can act on this information so that your loved ones will not lose out on any of the death benefits that may be due to your estate or your dependents.
Our App – An Estate Planning and Education Tool
Another useful estate planning tool is the Marsh Fidelity App. Our App is one of the first-to-market fiduciary apps and allows you to provide peace of mind to yourself and your loved ones while you are still able to do so. Through the App, our clients have access to secure storage of a Life File, their will and other estate planning documents which can be added and updated regularly as life changes occur. The App also includes the support of our team of qualified professionals to assist you and your loved ones.
Our App is free to download on the Google Play store via this link https://play.google.com/store/apps/details?id=com.marshfidelity.android or the Apple store via this link https://apps.apple.com/dk/app/marsh-fidelity/id6468891279 .
Contact Us
Reach out to us at [email protected] to get your estate planning in order and for assistance with will drafting, deceased estate administration and trust administration.
