When a person passes away, their assets – whether movable (like money or cars) or immovable (such as property) – are distributed to the beneficiaries named in their valid will (testate succession). Sometimes, the will specifies that assets must be divided among heirs, such as siblings, and that the remainder should pass to their children. In these cases, questions often arise about how inheritance can be fairly shared and whether assets can be rearranged among heirs.
Who counts as an heir, beneficiary or legatee?
It is important to understand the terminology:
- An heir is someone legally entitled to inherit all or part of an estate.
- A beneficiary is a person (or organisation) named in a will or trust to receive specific property.
- A legatee usually receives personal property under a will — this could be a relative, friend, charity, or business.
Redistribution agreements
South African law (section 14(1)(b)(iii) of the Administration of Estates Act) allows heirs to enter into a redistribution agreement if they prefer to divide assets differently from what the will sets out. For example, if two siblings jointly inherit a property, they may agree that one takes full ownership while the other receives the cash equivalent.
For such an agreement to be valid, it must:
- Be in writing.
- Be signed by all heirs.
- Be submitted to the Master of the High Court, together with the liquidation and distribution account.
The Executor is also a party to the agreement, and the Master of the High Court will evaluate and approve it.
If immovable property is involved, the redistribution agreement must comply with both the Administration of Estates Act and the Alienation of Land Act.
Practical implications
- Redistribution does not require co-ownership. One heir may take sole ownership of a property, with other heirs compensated in cash.
- Heirs may also decide that a property be purchased from the estate by one of their children, or even sold to a third party — but this requires all heirs’ written consent.
- Beneficiaries always have the right to repudiate (decline) their inheritance.
Relevant case law
- Leach v Champion Estates clarified that redistribution agreements can only be made between heirs and legatees, not outsiders.
- De Wet v De Wet dealt with a testator’s instructions for selling farmland and highlighted that heirs cannot override specific conditions set out in a will.
- Bydawell v Chapman confirmed that while beneficiaries can agree on how to enjoy the “fruits” of their inheritance, they cannot alter the actual devolution (the way property legally passes).
Tax considerations
Section 9(1)(e) of the Transfer Duty Act provides an exemption from transfer duty when immovable property is acquired through a redistribution agreement in an estate.
Inheritance matters are never just about assets — they touch on family relationships, fairness, and the testator’s intentions. While heirs do have flexibility through redistribution agreements, these must be carefully structured, documented, and compliant with the law. Courts will always give weight to the testator’s wishes, and any sale or transfer of property requires the joint agreement of all heirs.
