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How to provide your partner with fast access to funds while your estate is being finalised

How to provide your partner with fast access to funds while your estate is being finalised
Kenny Meiring
By Kenny Meiring
6 May 2025
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Three ways to invest money so your spouse has ready access to finances and is not hamstrung by bureaucracy in the event of your death.

Question: I want to invest some money that can do the following:

I want my spouse to have quick access to the funds should I pass away — I do not want her to have to wait till the estate has been finalised. I do not want the investment to trigger additional interest that is taxable. I would like the investment to be excluded from my estate.

Answer: Estates are currently taking a long time to get registered, so it makes a lot of sense to structure your investments in such a way that your spouse can have immediate access to enough funds to live on while your estate is being finalised. There are three options that you can consider.

Bank deposit in spouse’s name


An option is to donate the funds to your spouse and for her to keep these in her bank account. This will trigger tax for her on the interest earned in the account. The investment will be included in your joint estate.

Sinking fund or endowment policy


Another option is to take out an endowment or sinking fund policy in your name. What is nice here is that you can attach the beneficiary to this investment. This means that the proceeds of this investment will be transferred to your spouse upon your death. This is usually a quick transaction, so your spouse should have access to these funds within a month.

Be careful with sinking funds and endowment policies, as you are only allowed to make one withdrawal from them during the first five years. Once the five-year period is over, you may withdraw funds from the investment whenever you want. Should you pass away within the first five years, your spouse will have ready access to these funds and may make as many withdrawals from the investment as she wishes. The proceeds of this investment will form part of your estate.

Any growth on the investments that are inside the endowment or sinking fund will not trigger tax in your hands. They will be taxed within the structure and be paid by the life insurance company from which you purchased the investment. The investment will be taxed at the life insurance company rate of 30%.

Insider tip


If your personal tax rate is higher than 30%, you should consider using a structure like a sinking fund or endowment policy for your long-term investments. This will result in any capital gains tax being paid at a rate of 12% instead of a potential 18%.

Living annuity purchased with a disallowed RA contribution


Another option to consider is buying a retirement annuity (RA), converting it into a living annuity and making your spouse the beneficiary of this. You can attach a beneficiary to a living annuity so that your spouse would be able to access the funds relatively quickly. In addition, your retirement funds do not form part of your estate, which could result in a saving of estate duty.

You are allowed to invest 27.5% of your taxable income into an RA. These funds will not form part of your estate.

Any contribution above the 27.5% would be classed as a disallowed contribution. As long as your beneficiary elects to receive the proceeds of this investment in the form of an annuity, this will not form part of the estate.

The downside is that your spouse will not have access to a large lump sum of money. She will only receive an ongoing income.

I would recommend that you convert the RA into a living annuity. RAs are governed by the Pension Funds Act and there is a responsibility on the trustees of the RA fund to perform due diligence on any beneficiary payments. This can result in significant delays in the payment of these benefits.



You have three options that you can consider, and it may make sense to use a combination of these products. I have summarised the main benefits of these options in the table above. DM

Kenny Meiring is an independent financial adviser. Contact him at 082 856 0348 or at financialwellnesscoach.co.za. Send your questions to [email protected]

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.

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