All Animals are equal

All Animals are equal

George Orwell in Animal Farm quoted that “all animals are equal some are just more equal than others”. In South Africa we have a unique legal system based on both Roman Law and Dutch Law. One of the principles which is carried over from Roman Law, is the principle of collation. What collation basically means is that each child should inherit/ benefit equally, the problem with collation is that it is not restricted to the inheritance but, it relates to all monies received by a child during his or her lifetime.

Example

A has an estate of R 1 000 000 he has two children and he wants them to inherit equally. It therefore stands to reason that each child will inherit R 500 000.

If however one of the beneficiaries should instruct the executor to apply the principle of collation because his brother spent 4 years at university at R 100 000 a year, whilst he received “nothing”, the executor would then add “collation” to the estate making the total estate R 1 400 000. Therefore the non-graduate child would get R 700 000 and the graduate would get R 700 000 –   R 400 000 = R 300 000.

As you can see this is the breeding ground for blood feuds going into many generations and this is especially so because two things are happening more and more often. Firstly, life happens and circumstances change, so it is almost impossible to treat children exactly the same and secondly it is almost impossible to keep book of money spent on each child.

We are seeing more and more of a sense of entitlement from children, which I am not going to discuss in this article and children often have very selective memories with regards to what they did or did not receive from their parents. There is a simple solution to this problem if you bequeath your entire estate to your children, each for an equal share, simply stating that the principle of collation shall not apply.

Tagged with: , ,