Renouncement By Heir

Renouncement By Heir

• 13 November 2024
• Wills, Estates & Trusts
• The Tax Faculty Tax Specialist

This article is based on tax law for the year ending 28 February 2025.

1. Background

In a deceased estate, the surviving spouse (stepmother) and four adult children are beneficiaries. Due to a cash deficit in the estate, two of the four children have expressed their intention to renounce their inheritance, as they are unable to contribute financially. The will contains a clause specifying that if any beneficiaries predecease the testator, their share would be distributed equally among the remaining beneficiaries. This suggests that the shares of the two renouncing children would go to the surviving spouse and two remaining children.

However, there is uncertainty about whether Section 2C(1) of the Wills Act 7 of 1953 overrides the will's clause, which could potentially redirect the renounced portions to the surviving spouse. This decision affects how the estate will be distributed and whether two children will proceed with renouncing their inheritance.

2. Question

Should the will’s clause, which distributes the renounced shares equally among the remaining beneficiaries, be followed, or does Section 2C(1) override this clause, giving the renounced portions to the surviving spouse? 

*This decision is crucial for drafting the redistribution agreement, as the children may not renounce if Section 2C(1) applies.

3. Applicable Law 

Wills Act 7 of 1953, section 2(C)(1)

4. Application of the Law to the Facts

A possible interpretation is that a beneficiary has the right to accept (adiate) or reject (repudiate/renounce) the terms of a will. When a descendant of the deceased, who died with a will, renounces their right to receive a benefit, that benefit will vest in the surviving spouse of the deceased. If a beneficiary chooses to repudiate their benefit, any other clauses of the will that apply to them will no longer have any effect.

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