For this reason, understanding your local inheritance laws is important, as this will help you make informed decisions when deciding how your estate should be divvied up. Surprisingly, not all countries share the same rules, and some even have some unusual ones, which require sensitive handling.
In South Africa, for example, we have freedom of testation, which means we have the freedom to bequeath our assets as we choose. However, if no will is in place, affairs fall into the Intestate Succession Act which means your estate will be divided according to a set, legal formula.
The United States is another one of the few countries where there is no forced heirship at all. Unlike many other nations, as a legal concept, forced heirship is almost non-existent over there, with the exception of Louisiana. As such, the majority of people in the US can distribute their assets in any manner they see fit, irrespective of whether they have descendants or not.
Splitting heirs
In other countries, inheritances are handled very differently. For example, in all Muslim-run countries, Islamic or Shari’ah law is applicable, meaning intestate succession is governed by Islamic principles. This means there are specific rules guiding the distribution of assets among beneficiaries based on the relationship between the deceased and the heirs, which may differ from common law systems.
Nepal is another country that has a unique provision in its intestate succession laws. If an individual dies without a will, their property is divided equally among their children. If a child has died before the parent, the share will be passed down to the grandchildren (in the case that the child who died has children), rather than being redistributed among the surviving offspring.
South Korea, on the other hand, has a system that divides assets not only among direct descendants but also among extended family, including siblings and nieces or nephews. This is a significant departure from certain other jurisdictions where the primary focus is on direct descendants alone.
Restrictions on distribution
In Sweden, there is a "maintenance portion" law, which means that even if a person writes a will, a certain portion of the estate has to go to the surviving spouse and children. It is the same in France where the system of forced heirship sees deceased's children being entitled to a minimum share of the estate. This minimum share is generally between half and three quarters of the estate (depending on the number of children who survive their parent).
Andorra adopts the same law, where there are restrictions on freedom of disposition. There are two important compulsory restrictions on testamentary freedom in the country. Firstly, a quarter of the deceased’s estate has to be transferred to his or her children, and in the case where no children exist, to his or her ascendants. In addition, a quarter of the estate must be transferred to a surviving spouse if the said spouse does not have enough money or resources to maintain their standard of living.
Half and half
Singapore’s approach to intestate succession is a unique one, because the estate is divided between the spouse and parents, with the spouse receiving half and the other half being divided among the parents.
Until recently, inheritance laws in the United Kingdom were subject to primogeniture, meaning the eldest son inherited the estate in its entirety, excluding younger siblings, irrespective of gender. This has been reformed in recent years to facilitate a more equitable distribution of any inheritance among siblings. Moreover, these days, if no will exists, UK laws distribute the estate between the immediate family members, including the spouse, children, grandchildren, and great-grandchildren, regardless of gender.
India’s Hindu Succession Act of 1956, which applies to Hindus, Buddhists, Jains, and Sikhs, also introduced dramatic changes to the way property is distributed. It granted equal inheritance rights to daughters, which was a major departure from traditional Hindu succession practices in which sons were favoured.
Finally, Africa, with its many cultures and customs, has laws that vary from country to country. In some African nations, customary law governs inheritance, with complex inheritance rules that change from one region to another. In most cases, these laws prioritise the needs of the community and family over individual ones.
Be prepared
In short, no two places are the same and understanding your local inheritance laws is important. To ensure that loved ones are well looked after when you pass away and to enable them to move on without the stress that winding up an estate can cause, bring in a professional company such as Capital Legacy to assist you with getting your affairs in order, or speak to your financial advisor.
