what is collation
Inheritances of certain of a deceased’s heirs are adjusted to take into account the fact that they received substantial benefits from the deceased during their lifetime.
- does not increase the actual value of the deceased’s estate
what does the process of collation do
The process of collation means that
the inheritances of those heirs involved in collation are increased beyond what the will or the rules of intestacy would otherwise have given them,
and the inheritances of the other heirs are correspondingly reduced.
rationale behind collation
common law: there is a presumption of equal treatment (issue of fairness) – although collation will only apply if it is unclear as to whether the testator has ruled out collation, which he may have done expressly or implicitly.
how does collation take place
Collation takes place only where a person who is entitled to benefit from collation insists on collation
because the executor of the estate is usually not in a position to be aware of benefits given by the testator during their lifetime.
what happens if the executor is aware of collatable benefits
They are obliged to give effect to collation in the absence of a waiver by the beneficiaries or the remission of collation by the deceased.
what is the general rule of who participates in collation
Only descendants of the testator who are heirs and who would have qualified to inherit had the testator died intestate can be required to collate.
what happens with legatees
- A descendant who inherits as a legatee does not have to collate in respect of a legacy as such descendant inherits under a particular title
- Legatees, collaterals and non-blood relations are not obliged to collate unless there is a specific condition in the will.
what is the testators position in collation
- During their lifetime, the deceased is entitled to remit the duty to collate in favour of heirs / entitled to extend the obligation to collate to persons who would not otherwise be obliged to do so.
what is the beneficiaries position in collation
Beneficiaries may waive the benefit of collation
what happens when someone refuses to collate
If a person who is obliged to collate refuses to so then this amounts to a repudiation of their inheritance and they cannot inherit.
what are the 5 collatable benefits
- Money or property given as part of their inheritance (an advance on their inheritance).
- given for advancement in trade, business or a profession (to establish or improve a business of the heir).
- given as a marriage settlement (dowry or other wedding gift), excluding expenditure on a child’s wedding.
- a gift of a substantial nature in relation to the donor’s means resulting in inequitable treatment so far as the other heirs are concerned.
- Debts owed by the heir to the deceased, but extinguished by the deceased, by prescription or some other fashion and which diminish the estate. If debt not terminated – then executor will try and collect payment.
what benefits = not collatable
- Normal expenditure on maintenance, education or travel.
- Remuneratory donations (e.g. elderly parent has been nursed by child during long illness, rewards the child with a gift of a diamond ring) provided that the donation is not disproportionally large in relation to the services rendered.
- A simple and unconditional gift unless disproportionately large in relation to the donor’s means and results in unequal treatment of the other heirs.
at what time must a collatible benefit be valued ( De vos v Van der Merwe)
- GENERAL RULE: If the deceased did not stipulate, then determine the value at the time the gift was given.
if the collatable benefit is greater than the inheritance then what?
- Lose inheritance and share is paid to other heirs (not required to pay into the estate).
- Distribution of estate calculated as if heir did not exist.
