What is ‘massing’ your estate? And should you do it?

by | Mar 15, 2023 | Advisory Services | 0 comments

Depending on your circumstances, massing your estate with someone else’s can make sense. But don’t use this complex tool without consulting an expert. Marietjie Strauss, our resident estates expert, has the lowdown…

What is massing?

Massing is when two (or in some cases more) testators, combine their estates (or a portion of their estates) and bequeath the massed estate to an heir or heirs.

The intention to combine estates must be clearly and concisely stated in a joint will. This Will must also stipulate a limited right from the massed estate for the surviving testator(s).

After the death of the first testator the survivor(s) must adiate (accept) or repudiate (reject) the massing. If the survivor(s) adiates the massing, the heirs then inherit the estate in terms of the Will. The survivor(s) receives their limited right in return for their assets contributed to the first dying testator’s estate.

What’s massing used for?

Massing is most typically used by spouses who are married in community of property, but it can be used by any two or more adults.

Massing is usually used by testators who want to ensure that their ultimate beneficiaries (for example, their children) receive their inheritance as intended. For the cynical among us it can act as safeguard against the survivor squandering the assets of the first dying. But it can also be quite a useful way of maintaining a family’s legacy. For example, by ensuring that a son can inherit the family farm while his mother is still alive. In this case the mother’s limited right would be a lifetime usufruct of the farmhouse. 

The benefits of massing

  • Massing can protect assets against the survivor squandering the assets of the first dying,
  • By massing, the benefit of the joint estate can reach the ultimate heirs (example children) sooner, while still ensuring that the survivor’s needs are met.
  • It is also a useful tool to protect the estate assets from the survivor’s future marriages.

The RISKS and disadvantages of massing

  • It is a complex tool.
  • The survivor (after the death of the first dying) cannot dispose of the massed assets in a later Will.
  • If you are not careful, massing can trigger donations tax; CGT; transfer duties and estate duty!

But how does the survivor…survive?

If massing is included in a joint will, a limited right has to be stipulated in favour of the surviving testator(s), over parts or interest of the combined estate / estate assets, for their lifetime. This limited interest can include (but is not limited to) a usufruct (the right to use an asset or the “fruit” of an asset, such as a house), fiduciary interest, or the survivor(s) being named as an income beneficiary under a trust. 

IF there is no limited interest stipulated in the Will, then there will not be statutory massing, thus massing will fail. Should the survivor still wish to transfer assets, to honour the intention of the Will, it will be seen as a donation by the survivor(s). This donation will be taxed in accordance with the standard SARS rate at the time. This will also be the case if the limited rights created in the massing exercise are valued at a lesser value than the survivor’s contribution to the joint estate.  

When massing goes wrong

This example comes from a court case all the way back in 1873, but the principles it illustrates are as relevant as ever. The testator, Mr Cornelis Mostert, and his wife were married in community of property. A few years before his death, he sold their farm to their nephew and son-in-law – Mr Sybrand Mostert. Sybrand took out a mortgage bond over the farm in favour of the testator (Mr Cornelis Mostert), to secure the purchase money. 

The testator and his wife subsequently drew up a mutual will under which Sybrand was a beneficiary. In terms of the will, any amount of money a beneficiary owed the testators was to be brought into computation when the bequest to the beneficiary concerned was calculated on the death of the first dying testator. If the debts happened to exceed the amount of the beneficiary’s inheritance from the estate of the first dying, he would not have to pay up the excess, but would remain indebted for such excess to the estate of the survivor. Upon the death of the surviving testator the remainder of the debt was then to be taken into account when calculating the beneficiary’s inheritance from the estate of the survivor.

After Cornelis’ death his widow refused to accept any benefits under her husband’s will (repudiated) and claimed her half of the estate. The Executor (the SA Association) then claimed half the debt from Sybrand. Sybrand argued that in terms of the will he was not obliged to pay the debt directly. 

The executor submitted that the widow could elect to take benefits under the will, or to repudiate and then claim her half of the joint estate (in terms of the marriage in community of property). The court held that the widow was obliged to give effect to the mutual will and therefore could not claim half the debt from Sybrand. An appeal against this decision was upheld.

This case is the locus classicus (‘the OG,’ in modern slang) as far as massing is concerned. The principles expounded in this case were extended in subsequent cases such as the well-known Rosenberg v Dry’s Executors and applied in numerous others. These principles were later incorporated into the legislation we use today. (Source: Casebook on the Law of Succession 2nd Edition, DSP Cronje & Anneliese Roos.)

Understanding adiation & repudiation

After the death of the first testator, the survivor(s) need to formally in writing, adiate (accept) or repudiate (reject) massing. The decision to adiate or to repudiate is irrevocable.

Adiation means that the survivor(s) accepts the terms of the mutual Will, to join their estates or part thereof. By adiating, the survivor(s) loses ownership and future testamentary rights over the assets included in the massed estate.

Repudiation means that the survivor(s) rejects the terms of the mutual Will and the massing will thus fail. Both Adiation and Repudiation Certificates need to comply with certain prescribed requirements. 

For spouses married in community of property, if the survivor repudiates, the surviving spouse will be entitled to retain their half share in the Estate (due to their marriage in community of property) but will not benefit from the deceased’s assets. The deceased’s share in the community estate will then devolve in terms of the Will as if the survivor is predeceased. If failed in total (for instance if there was no provision made in the Will for substitute heirs should the survivor(s) repudiate) then the deceased’s assets will be distributed in terms of the Intestate Law of Succession. 

If the survivor formally “adiates” (accepts) the massing, the administration of the Estate will involve the joining of assets (or part of the assets) and in some cases liabilities of both the deceased and the survivor(s). These are then jointly bequeathed to the nominated heirs and the survivor will receive a limited interest (benefit) in exchange for the contributed assets. 

Fun fact

By repudiating, the surviving spouse does not alienate their right to claim maintenance against the deceased’s share of the Estate.  

A word of warning

If you’re thinking about including massing as part of your estate plan, we strongly advise that you consult with a professional, to ensure your Will is drafted correctly and that all parties understand the implications of massing. Used wisely, massing can be a very helpful tool. But it can also be a very expensive and distressing mistake.