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10. COLLATION
E.g. Donald is millionaire with an estate estimated to be worth R15 million. In order to assist his son set up his own
business and establish a name for himself, Donald gives Donald Jnr R6 million. When Donald dies his estate is worth
R9 million and Donald provides that his estate is to be divided equally between his 3 children. Donald’s children are
aggrieved by the events. They feel that Donald Jnr has been favoured and that he should not be entitled to share in
the estate equally because he received such a substantial benefit while the testator was alive. They want Donald’s
inheritance to be reduced to take into account the substantial amount Donald Jnr received while he was alive.
What is collation?
• Collation = process in which the inheritance of certain heirs are adjusted to take into account the fact
that they received substantial benefits from the testator while he/she was alive.
• Rationale: To ensure that the deceased’s children are all treated equally. The underlying presumption
is that a parent wants to benefit his/her children equally and will not substantially benefit one over
another.
• Collation applies under both testate and intestate succession.
Who participates in collation?
• General rule: DESCENDANTS, who are HEIRS and who would have QUALIFIED TO INHERIT HAD THE
TESTATOR DIED INTESTATE.
• 3 requirements:
1. Have to be a descendant (i.e. children or grandchildren)
2. Have to be an heir (not a legatee) – must be left the residue of the estate
3. Beneficiary must be a potential intestate heir.
* If you met the 3 requirements you are obliged to collate AND can benefit and call for collation.
• The testator can extend the obligation to collate to other beneficiaries OR exempt beneficiaries from
the duty to collate (this is more likely) during his/her lifetime. This may be done expressly in the will
or implied from the testator’s conduct and statements.
• Beneficiaries may waive the benefit of collation.
Ex. Can the following people be required to collate?
1. A brother or sister of the deceased – No, not a descendant.
2. Grandchildren of the deceased whose parents are still alive – No, not an intestate heir.
3. A child who inherits the deceased’s house – No, not an heir but a legatee.
4. Grandchild who inherits as an heir in place of predeceased parent by way of substitution – Yes
5. A friend of the deceased who had been left the deceased’s entire estate – No, not a descendant.
6. A credit of the deceased – No, but might be able to use insolvency law to reclaim benefits given to a
beneficiary by the testator during hi/her lifetime.
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• If a person who is obliged to collate refuses to collate – amount to a repudiation of the inheritance
and he/she cannot inherit.
• If a testator chooses to treat heirs unequally in a will, does this mean collation has been dispensed
with?
In Thesnaar v Die Meester, the testator bequeathed her estate (R 112 500) to her two daughters in
ratio 2:1 in favour of the elder daughter. However, the elder daughter had also received gifts from the
testator worth R280 000. The elder daughter argued that the presumption that the testator intended
to treat her children equally was rebutted by the terms of her will, in which she bequeathed a larger
share of her estate to the elder daughter. This, it was argued, was proof that the testator had
dispensed with collation.
However, the Court held that collation must still take place. It held that where the testator chose to
distribute the estate among her children in unequal portions, the rebuttable presumption is that the
testator intended collation to preserve the proportions she chose.
Therefore, collation will still take place but the proportion of 2:1 will remain.
• If the value of the benefit to be collated is so large that it excludes the beneficiary from inheriting –
the beneficiary receives nothing and pays nothing and the distribution of the estate is recalculated as
if he/she did not exist.
How does collation occur?
• The executor is responsible for collation. If the executor of the estate is aware of collatable benefits,
he/she is obliged to give effect to collation (unless there is an exemption by the testator or wavier by
the beneficiaries).
• However, it is unlikely that the executor will be in a position to know about any collatable benefits
and thus, collation only takes place where a person who is entitled to benefit from collation insists on
it.
• The adjustment of the account must take place in the distribution account, rather than the
liquidation account.
What benefits are collatable?
Collatable benefits:
1. Money or property given as an advancement on inheritance.
2. Money or property given to establish or improve the business of the heir.
3. Money or property given as a dowry or wedding gift (not expenditure on a child’s wedding).
4. A substantial gift in relation to testator’s means which results in the inequitable treatment of other
heirs.
10. COLLATION
E.g. Donald is millionaire with an estate estimated to be worth R15 million. In order to assist his son set up his own
business and establish a name for himself, Donald gives Donald Jnr R6 million. When Donald dies his estate is worth
R9 million and Donald provides that his estate is to be divided equally between his 3 children. Donald’s children are
aggrieved by the events. They feel that Donald Jnr has been favoured and that he should not be entitled to share in
the estate equally because he received such a substantial benefit while the testator was alive. They want Donald’s
inheritance to be reduced to take into account the substantial amount Donald Jnr received while he was alive.
What is collation?
• Collation = process in which the inheritance of certain heirs are adjusted to take into account the fact
that they received substantial benefits from the testator while he/she was alive.
• Rationale: To ensure that the deceased’s children are all treated equally. The underlying presumption
is that a parent wants to benefit his/her children equally and will not substantially benefit one over
another.
• Collation applies under both testate and intestate succession.
Who participates in collation?
• General rule: DESCENDANTS, who are HEIRS and who would have QUALIFIED TO INHERIT HAD THE
TESTATOR DIED INTESTATE.
• 3 requirements:
1. Have to be a descendant (i.e. children or grandchildren)
2. Have to be an heir (not a legatee) – must be left the residue of the estate
3. Beneficiary must be a potential intestate heir.
* If you met the 3 requirements you are obliged to collate AND can benefit and call for collation.
• The testator can extend the obligation to collate to other beneficiaries OR exempt beneficiaries from
the duty to collate (this is more likely) during his/her lifetime. This may be done expressly in the will
or implied from the testator’s conduct and statements.
• Beneficiaries may waive the benefit of collation.
Ex. Can the following people be required to collate?
1. A brother or sister of the deceased – No, not a descendant.
2. Grandchildren of the deceased whose parents are still alive – No, not an intestate heir.
3. A child who inherits the deceased’s house – No, not an heir but a legatee.
4. Grandchild who inherits as an heir in place of predeceased parent by way of substitution – Yes
5. A friend of the deceased who had been left the deceased’s entire estate – No, not a descendant.
6. A credit of the deceased – No, but might be able to use insolvency law to reclaim benefits given to a
beneficiary by the testator during hi/her lifetime.
, 2
• If a person who is obliged to collate refuses to collate – amount to a repudiation of the inheritance
and he/she cannot inherit.
• If a testator chooses to treat heirs unequally in a will, does this mean collation has been dispensed
with?
In Thesnaar v Die Meester, the testator bequeathed her estate (R 112 500) to her two daughters in
ratio 2:1 in favour of the elder daughter. However, the elder daughter had also received gifts from the
testator worth R280 000. The elder daughter argued that the presumption that the testator intended
to treat her children equally was rebutted by the terms of her will, in which she bequeathed a larger
share of her estate to the elder daughter. This, it was argued, was proof that the testator had
dispensed with collation.
However, the Court held that collation must still take place. It held that where the testator chose to
distribute the estate among her children in unequal portions, the rebuttable presumption is that the
testator intended collation to preserve the proportions she chose.
Therefore, collation will still take place but the proportion of 2:1 will remain.
• If the value of the benefit to be collated is so large that it excludes the beneficiary from inheriting –
the beneficiary receives nothing and pays nothing and the distribution of the estate is recalculated as
if he/she did not exist.
How does collation occur?
• The executor is responsible for collation. If the executor of the estate is aware of collatable benefits,
he/she is obliged to give effect to collation (unless there is an exemption by the testator or wavier by
the beneficiaries).
• However, it is unlikely that the executor will be in a position to know about any collatable benefits
and thus, collation only takes place where a person who is entitled to benefit from collation insists on
it.
• The adjustment of the account must take place in the distribution account, rather than the
liquidation account.
What benefits are collatable?
Collatable benefits:
1. Money or property given as an advancement on inheritance.
2. Money or property given to establish or improve the business of the heir.
3. Money or property given as a dowry or wedding gift (not expenditure on a child’s wedding).
4. A substantial gift in relation to testator’s means which results in the inequitable treatment of other
heirs.
