Category

Wills and Estate Planning

Sep 26
0

Can a Video Call be a Valid Will?

By | Wills and Estate Planning

“Death is not the end. There remains the litigation over the estate.” (Ambrose Bierce)

It may well be that in the future, we will be able to make a perfectly valid will (“Last Will and Testament”) by way of a video recording or other electronic means, but that day has not yet arrived.

For now, it is essential that your will be properly drawn, not only to clearly reflect your last wishes, but also to comply with all the formalities laid out in our Wills Act.

In summary (ask your lawyer to explain the finer points, they are important), wills must be in writing and signed by you on all pages, in the presence at the same time of two competent witnesses who must sign the end page (preferably all pages, but that’s not a formal requirement). Note that neither witnesses nor their spouses can inherit or be appointed as executor, trustee or guardian.

Video wills – are they valid?

Bearing in mind those required formalities, and the fact that an attempt to rely on a video recording as a will was abandoned in the case discussed below, it would be rash to assume that a “video will” ever be accepted as valid even though the concept has not to date been directly tested in our courts.

Rather observe all the formalities listed above, and think of using a video recording just as an adjunct to your formal will. For example, recording the will-signing process itself could help avoid any future dispute over your written will’s validity, whilst an informal video message to your family explaining to them why you have drawn your will the way you have could provide clarity and comfort to them when the time comes.

Non-compliance with formalities – there are “escape hatches”, but …

There are “escape hatches” in that our Wills Act provides that a document not complying with all formalities can be accepted as a valid will if it was drafted or executed by the deceased and if it was intended to be their will. You can also be authorised to both inherit and act as an executor, even if you or your spouse signed as a witness, if you can prove that there was no fraud or undue influence over the deceased. You can also be taken to have revoked a previous will in various ways.

But as we shall see from the two recent High Court cases discussed below, relying on any of those escape hatches is extremely unwise. At worst, your last wishes won’t be honoured, and at best you will be exposing your loved ones to the risk of prolonged and bitter litigation at the very worst time.

Case 1: A Covid-19 video-call attempt to replace a will fails
  • A father had left everything to his children in a 2018 will. But, dying in hospital of Covid-19 in 2021, he made a video call to his farm manager indicating his wish to revoke the will and saying that his final instructions were that everything be left to his farming trust.
  • As requested, the farm manager had a will to that effect drawn by attorneys and delivered it to the hospital (he was unable to deliver it personally due to Covid-19 restrictions then in place), but the father died before it could be given to him for confirmation and signature.
  • The trust asked the High Court for an order declaring the 2018 will revoked and the 2021 unsigned will accepted as valid (it seems to have abandoned an argument that the video call itself was a will). The disinherited children opposed this application vigorously.
  • The Court declined to validate the unsigned 2021 document, pointing out that the Wills Act’s provisions in this regard must be interpreted and applied strictly and narrowly. It’s analysis of the trust’s argument that the “impossibility principle” applied will be of great interest to lawyers, but the practical point of issue to most of us is that although it seems clear that the father wanted to make a whole new will, on the facts of this case only his written and signed 2018 will could be accepted as valid.
Case 2: Brothers at war, and a non-compliant will accepted as valid
  • Another tragic case of a dying father trying to change his will, this time to disinherit one son (“JP”) in favour of the other (“SG”).
  • The new will did not comply with the Wills Act’s formalities. Three witnesses signed it but not in each other’s presence, whilst the fact that one of the witnesses was SG’s wife formally disqualified him from inheriting or acting as executor.
  • JP asked the Court to declare the will invalid so he could inherit under the laws of intestacy, whilst SG asked the Court to accept the will despite the non-compliance, and to allow him to inherit and to act as executor.
  • On the particular facts of this case, including undisputed evidence of a major rift between JP and his father (in contrast to an extremely close relationship between SG and the father), the Court exercised its discretion in favour of SG.
  • Firstly, it held that the will, despite the failure to comply with formalities, was indeed drawn by the father and intended by him to be his will. It was therefore accepted as valid.
  • Secondly, it held that SG could both inherit and act as executor because he had proved a lack of fraud or undue influence over his father.

Different outcomes but a clear principle – failure to comply with all formalities risks your last wishes not being implemented and exposes your loved ones to dispute and litigation.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Aug 28
0

How to Protect Your Children’s Inheritances from Ending Up in the Guardian’s Fund

By | Wills and Estate Planning

“Live each day as if it were your last… because one day, you’ll be right.” (Benny Hill)

It’s always tempting to procrastinate about decisions that force us to address the inevitability of our own mortality. But we have no choice when it comes to protecting our loved ones after we are gone, because to protect them a will (“Last Will and Testament”) is not a nice-to-have, it’s a necessity. And it’s urgent. No one – young or old, healthy or ill, wealthy or of limited means – can guarantee that they’ll be alive tomorrow.

How to structure your will? One potential risk area when it comes to your children’s inheritances is the Guardian’s Fund. The Fund serves a vital purpose, but it has featured regularly in the media over the past few years for all the wrong reasons – ongoing losses to cybercriminals and fraudsters (the last reported loss was R17m), SIU (Special Investigating Unit) probes into allegations of misconduct and corruption, and the like.

How is that relevant to you? Well, if you have minor children, it confirms once again that your will should be professionally drawn to avoid any chance of your children’s money ending up in the Guardian’s Fund.

Dying “intestate” means trusting a State-run entity with your children’s money

Without a will, you die “intestate”, which means that the law makes your decisions for you. You have lost the right to choose a trusted executor, you have lost the right to specify how your estate is distributed to your loved ones, you have lost the right to nominate a guardian for your children. Perhaps most importantly of all, you have lost the right to protect your minor children’s inheritances as you see fit.

That’s a problem because, unless you leave a will structured to provide a mechanism for looking after your children’s inheritances until they reach majority (i.e. turn 18), those moneys might well end up in the Guardian’s Fund.

What is the Guardian’s Fund?
  • The thought behind the Guardian’s Fund is a laudable one – it was created to hold and protect money (including inheritances) for minors and other people who are legally incapable of managing their own affairs. For those vulnerable people whose money it safeguards, it performs a most valuable service.
  • All money is invested with the PIC (Public Investment Commission) and earns interest at a rate set from time to time by the Minister of Finance.
  • The Fund is audited annually and is managed by the Master of the High Court (actually by one of several Masters around the country, each of whom runs a separate Fund), without charge.
  • A child’s guardian can approach the local Master to pay over accrued interest (and in need up to R250,000 of the capital) for maintenance needs.
So, what’s the problem?

Knowing that your children’s money is to be held in an audited, managed-for-free fund administered by independent and senior government officials is certainly a lot less alarming than many of the possible alternatives, but it is by no means ideal –

  • The media reports of hacking, theft, fraud, police probes into allegations of misconduct and corruption etc that we mentioned above hardly inspire confidence in the Fund’s ability to manage and protect your children’s inheritances, even if only one or two “bad egg” employees are involved.
  • Your children’s guardian must jump through all sorts of administrative hoops to draw money for maintenance, education, clothing, medical costs and so on. The delays and dysfunction which reportedly still plague many Master’s Offices won’t help.
  • As mentioned above, Fund monies are paid a government-fixed rate of interest, currently 4.25% p.a. That’s both below inflation and an unattractive alternative to the earnings potentially available to discretionary funds.
  • When your children turn eighteen, they are again faced with red tape and bureaucracy before they can access whatever is left of their money.
The best protection?

The good news is that you can easily protect your vulnerable minor children from all those risks and negatives. These are the two essentials –

  1. Leave a valid will, professionally drawn to protect all your loved ones and in particular those most vulnerable such as your minor children, and
  2. Make sure that your will nominates a guardian for your children and includes a mechanism to protect their inheritances so as to avoid any risk of their money having to be paid into the Guardian’s Fund.

    The most commonly advised protection mechanism to avoid that unhappy scenario is a trust – either an existing trust (if fit for purpose), or a new “testamentary trust” which will come into existence when you die. The alternative is to provide for the children’s guardians to administer their inheritances for them, but a trust is almost always the better, safer, and more practical option. Either way, make sure that your will’s provisions correctly and clearly set out your wishes in that regard.

    Bear in mind that anything to do with trusts of any kind calls for specific professional advice – there are complex legal, financial and tax considerations involved.

Bottom line – have your attorney draw your will (or update your existing will) to ensure that your children’s inheritances are properly protected and don’t end up in the Guardian’s Fund!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Apr 24
0

Divorce: Remember to Review Your Will!

By | Family Law, Wills and Estate Planning

“It has long been a foundational principle of our common law and the legislation that has governed the law of testamentary succession that a will, properly executed, is the document that authoritatively reflects the genuine and voluntary dispositions of a testatrix.” (Extract from judgment below)

Most people when making wills and estate plans will lean toward leaving all or most of their estate to a spouse in one form or another.

But if things fall apart and divorce looms it is easy in all the stress and hurly burly of the break-up to forget all about your will. Now it may be that you are quite happy to leave things as they are, but it’s far more likely you will want to make changes – big changes.

Either way, it is important to have on your break-up To Do list a big note “Review and change my will”. If you don’t, our law makes your decisions for you – better than nothing perhaps but far from ideal.

The risks of leaving your will unchanged

In terms of our Wills Act, your ex-spouse is excluded from inheriting under your pre-divorce will for a period of 3 months, unless (a very unlikely scenario) your will makes it clear that you wanted your ex-spouse still to benefit despite the divorce.

After 3 months, if you haven’t made a new will your ex-spouse can inherit again because you are assumed to have wanted him/her to remain an heir. In practical terms, you have 3 months to get your act together and make a new will reflecting your new wishes.

But rather than do nothing for 3 months, leave nothing to chance and make your new will as soon as you can. If you do nothing, your preferred heirs (your children perhaps, or other loved ones) are at risk –

  • If you die within the 3-month period, your family could find itself in a bitter fight over your will and how you intended your estate to be distributed. Witness the Supreme Court of Appeal (SCA) case we discuss below.
  • If you survive beyond the 3 months, you may have just left everything by mistake to an ex-spouse from whom you are totally estranged.
A case in point
  • Shortly before her marriage a wife made a will leaving everything to her husband. She failed to revoke or amend that will after their divorce and committed suicide within the 3-month period.
  • Excluded by the Wills Act from inheriting (as set out above) the ex-husband applied to the High Court to have that provision of the Act declared unconstitutional. The High Court ruled against him and he appealed to the SCA.
  • The SCA upheld the constitutional validity of the Wills Act provision, and whilst the Court’s detailed reasoning for reaching that conclusion will be of great interest to lawyers, from a lay point of view what really counts is –
    • The two risk factors set out above remain in place
    • The case serves as a clear warning that not reviewing your will on divorce can easily lead to protracted and bitter litigation, to everyone’s detriment.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Jan 03
0

Living Wills: 6 Myths Busted

By | General Interest, Wills and Estate Planning

Health issues and mortality are facts of life, no matter how remote they may seem at the moment, nor how distressing they are to contemplate. For your family’s sake as well as for your own, make sure that you have a Living Will (or another form of “advance healthcare directive” such as a Durable Power of Attorney for Healthcare) in place. While you’re at it, check that your loved ones also make Living Wills.

6 Myths

Let’s get some pervasive myths about Living Wills out of the way. In doing so we’ll answer the question of why everyone, young and old, should have one.

Myth 1: “It’s not important, I already have a will”. Not true, your “Last Will and Testament” is another concept altogether. Certainly it’s a vital document, quite possibly the most important one you will ever sign, but it talks only as to what happens after you die. It won’t help you before you die.

In contrast, a Living Will applies while you are still alive, setting out what medical treatment you do and don’t consent to. It speaks for you when you can no longer speak for yourself. It addresses your right to decide whether or not you are to be kept artificially alive after you lose the capacity (physical or mental) to object. 

Myth 2: “It’s euthanasia or assisted dying”. No, it’s a totally different concept. Euthanasia and “assisted dying” (or “medically assisted suicide”) are unlawful in South Africa. But your Living Will does not instruct doctors to actively intervene to end your life nor to assist you in committing suicide. In fact, it does the opposite, instructing that nature be allowed to take its course and refusing any active intervention to keep you alive artificially (possibly in pain and distress) after all hope of recovery has gone.

We must all decide for ourselves the extent to which we are comfortable with this concept. Discuss any conscientious or religious concerns with your spiritual advisor if you have one.

Myth 3: “It’s selfish”. In no way is it selfish. It helps your loved ones make the hard choices if and when they are called on to do so, and it spares them the distress of feeling responsible for making life and death decisions for you at the worst possible time. You relieve them of that burden by telling them what your decision is. It could also save your family a fortune in crippling and totally unnecessary medical expenses.

Myth 4: “It won’t be honoured so it’s pointless”. Advance healthcare directives have to date neither been specifically recognised in law, nor held unenforceable by our courts or legislation. A large body of opinion suggests that they can and will be enforced because of the general rule that patients must consent to treatment. Both the HPCSA (Health Professions Council of South Africa) and SAMA (South African Medical Association) have issued guidelines for honouring advance directives, with medical practitioners called upon to encourage their patients to put directives in place.

Myth 5: “It can wait until tomorrow”. No, it can’t. The most settled of lives can be upended in the blink of an eye. Traffic accidents, strokes, sudden onset illnesses (think covid!) and the like often don’t announce themselves at all.

Myth 6: “I’m too young to need one”. Nope. Those horror scenarios we mentioned above come out of the blue to young as well as to old. Express your wishes while you can – it’s too late afterwards.

What should be in your Living Will and who should you give it to?

There is no set format here but several standard templates are available. If you are given one or get one online, it’s important to have your lawyer configure it to set out clearly and lawfully your own specific needs and wishes, consistent with any religious or moral beliefs you may hold. This is your chance to set out what you want. Make it easy for your loved ones and healthcare workers to honour those wishes – don’t for example ask a doctor to actively end your life, that’s illegal.

Sign several originals, keep one for your own use and give the others to your loved ones, your healthcare practitioners, your lawyer and anyone else who might end up having to implement it or oversee its implementation (a close friends perhaps, or a retirement facility if you live in one).

Diarise to review and renew it regularly – the attending doctor must be satisfied that you were mentally competent when you signed the directive, and that your wishes haven’t changed in the interim.

What about a “Durable Power of Attorney for Healthcare”?

This is a document (also as yet untested in the courts) in which you appoint someone you trust, normally a close family member, as your substitute healthcare decision-maker should you become unable to make your own decisions. It’s a very personal decision whether to go with this concept or to just stick with a Living Will, but you could perhaps have both – a Living Will plus a power of attorney authorising your decision-maker to ensure that it is implemented.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Nov 28
0

Generational Wealth Planning – To Your Children and Beyond!

By | Wills and Estate Planning

“Are we being good ancestors?” (Jonas Salk)

What do you plan to give your family this Festive Season? Now’s the time to think beyond the brightly wrapped gifts under the tree and get started on an estate plan which will leave your loved ones the lasting gift of financial freedom.

Estate planning involves a lot more than just executing a valid will, but let’s start off with a reminder that a will must always be your top priority.

Your will is the heart of your estate plan

You will have heard this many times before, but it bears repeating. Your will (“Last Will and Testament”) could well be the most important document you ever sign. Without executing a will, you forfeit your right (and duty) to decide how your assets will be distributed so as to ensure the future happiness and well-being of your loved ones. You lose your opportunity to choose an executor you can trust to wind up your estate professionally and efficiently. And no matter your age or state, it cannot wait – no one knows when the fateful day will dawn.

Most importantly, your will lies at the heart of your entire estate plan. It underpins and powers it. So, if you don’t yet have a will in place (or if your will needs updating) make your number one priority: “Book an appointment with my lawyer. Now.” Then ask your lawyer to draft your will to form the core of your overall estate plan.

What is an estate plan and why should you have one?

Your estate plan is your roadmap to creating wealth, to protecting it, and to transferring it to the next generation (or beyond). It is the only sure-fire way of ensuring your own comfortable retirement and of providing for the financial wellbeing of your loved ones after you are gone.

It incorporates your overall financial strategy, answering questions such as how you will save and invest, what investment options you will choose, how you will acquire assets, how you will provide for tax and other liabilities, how you will ensure effective succession planning in your business, how you will transfer your wealth to the next generation and so on.

Bring your family in early

It’s never easy contemplating one’s own mortality but in fairness to your loved ones make sure that as soon as they are old enough to participate, everyone is part of the process. Bring them in on everything you can and keep them in the loop when you are tracking progress or thinking of changing anything.

Questions to ask yourself

As the old adage has it “Failing to plan is planning to fail”. So plan. Start by asking yourself (and your family) these questions –

  • What is our end goal?
  • How much wealth do we need to build up?
  • What is our target date for reaching that goal?
  • How will we achieve it?
Now formulate your financial mission statement

Use your answers to those questions to formulate a “financial mission statement” and a detailed strategy to get there. As always with goal setting, break the big goals down into little ones, with target dates for achieving them and ways of tracking your progress.

Done and dusted! But wait, how will you actually transfer that wealth to the next generation (or beyond)?

Preserving your wealth for the next generation – and beyond

For many, it’s only realistic to plan one or two generations ahead. But whether your aim is to provide financial cover for just your spouse and children, or for your grandchildren as well, or (let’s aim high here!) for your great grandchildren and beyond, your estate plan should lay out a clear strategy for preserving your wealth down the generations.

Trusts are often recommended for generational wealth preservation and transfer, and whilst they have pitfalls and should only be considered with professional advice, they can certainly provide a powerful solution. In particular they could result in substantial estate duty savings for many generations down the line. Similarly, corporate structures (companies, company/trust combinations and the like) are often used for this purpose, particularly when trading businesses are involved. Donations during your lifetime may be suggested but beware the tax implications. Living annuities enable you to nominate beneficiaries to receive the benefits (with a tax incentive for them to leave at least part of the funds invested). There may be other niche solutions to suit your particular needs.

The bottom line

There are many complex decisions to be made and there is no “one size fits all” solution. Every family’s situation and needs will be unique. Every class of asset and every wealth-transfer vehicle carries with it particular requirements, benefits, risks and cost and tax considerations.

Professional advice specific to you and your family is essential!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Aug 29
0

Your Will Can’t Wait: The Tragic Case of a Mother Who Took Too Long

By | Wills and Estate Planning
“We are such stuff / As dreams are made on, and our little life / Is rounded with a sleep.” (Shakespeare)
We aren’t comfortable thinking about our mortality, but death comes to all of us and it is our loved ones who will suffer if we don’t make plans to look after them whilst we still can. First prize here will always be a full estate planning exercise, but at the very least put a will in place. There is no other way of ensuring that your loved ones’ interests are protected, that they inherit what you want them to inherit, and that your estate is wound up by an executor you trust to act with integrity and professionalism.
Formalities rule
Make sure that your will is a proper and valid one, professionally drawn in accordance with all the required legal formalities. As we shall see below, our courts have only a limited ability to help out when requirements aren’t fully complied with, and that can be disastrous for your dependants.
A dying mother’s instruction to draw a will – too little, too late
A tragic High Court case from 2021 illustrates the dangers of delay –
  • Dying of terminal cancer, a mother filled out a bank form headed “Will Application / Aansoek om testament”. In it she gave the bank instructions to draw her will.
  • Her intentions were laid out clearly in the document – to leave everything to her minor child.
  • Unfortunately she died the next day, before her will was drawn and signed. Her husband claimed that she had accordingly died “intestate” (without a valid will) leaving him to inherit a full “child’s share” with a minimum of R250,000. As their marriage was in community of property, the husband was already a 50% owner of all the marital assets, and this estate not being a large one the practical effect appears to be that he would likely inherit everything, and the child would get nothing.
  • A group of relatives, trying to give effect to the mother’s wishes and to protect the child’s interests, asked the High Court to accept the bank’s instruction document as a valid will in terms of a section in the Wills Act which provides that: “If a court is satisfied that a document or the amendment of a document drafted or executed by a person who has died since the drafting or execution thereof, was intended to be his will or an amendment of his will, the court shall order the Master to accept that document, or that document as amended, for the purposes of the Administration of Estates Act, 1965 (Act 66 of 1965), as a will, although it does not comply with all the formalities for the execution or amendment of wills referred to in subsection (1).” (Emphasis supplied).
A cruel twist of fate
There was no doubt here that the bank form correctly set out the mother’s wishes. But there was a fatal problem – as the Court put it “…the content of the document in issue and the circumstances surrounding its execution indicate clearly that the deceased did not intend it to be anything other than a drafting instruction. There is nothing to support the contention that the deceased intended the document to be her will; everything points to the contrary.” The form could therefore not be accepted as a valid will, and the child is left with little or nothing other than the Court’s expressed hope that the husband would if practicable “honour his late wife’s declared wishes regardless of the fact that due to a cruel twist of fate [the child] did not end up being entrenched in a will as she had intended.” Without a doubt the Court would have come to the child’s assistance if it could have, but the clear wording of the Wills Act left it unable to do so.
Make a will – now!
None of us knows when Death will come knocking at our door. If you don’t already have a valid, updated will in place, make sure that “Make a Will” or “Update my Will” is at the very top of your priority list. Your will could well be the most important document you ever sign, so getting professional advice and assistance is an easy decision here. Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Apr 25
0

Don’t Just Leave Your Loved Ones Assets – Leave Them a Legacy!

By | Wills and Estate Planning
“A Legacy Letter is a way for you to share your values, life lessons, cherished memories, hopes for your family’s future, and anything else that is really important to you.”
Estate planning is key to ensuring that your loved ones are properly catered for after you are gone. Ideally go beyond the practical and financial issues and also leave something personal, something of yourself. Follow these three simple steps to ensure that you don’t just leave behind assets, but also a lasting and valuable legacy –
  1. Firstly, leave a valid and updated will (“Last Will and Testament”). It’s the core and the foundation of your plan to protect the people you care for.
  2. Next, address the financial and practical aspects. Will each of your loved ones have enough to support them? Will there be enough cash in your estate to ride out the inevitable delays in winding it up? Are children and any other vulnerable family members protected? Have you taken advice on setting up trusts? Do you have enough life insurance in place? Have you left a full “Important Information File” to help your executor and your family take control of and finalise your estate?
  3. Now go one step further – don’t just leave an estate, leave a legacy. Read “How to Preserve Your Life’s Lessons for Future Generations” on Mission Wealth for ideas on how to share a meaningful “Legacy Letter” with your family. Follow the links in that article to “Leaving a Legacy” and “The New Way to Leave a Lasting Legacy”.
Let’s close with these words of wisdom from that article: “The golden rule of all estate planning is: Don’t wait.” Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Mar 29
0

Don’t Accidentally Disqualify Your Chosen Heirs from Inheriting!

By | Wills and Estate Planning
“Death is not the end. There remains the litigation over the estate.” (Ambrose Bierce)
Your will (“Last Will and Testament”) will always be the keystone of your estate planning, and a recent High Court decision sounds yet another warning to beware the “do your own will” concept. By not having his will drawn by a professional, a father inadvertently caused one of his children to be disqualified from inheriting her intended share, whilst her husband was disqualified from being appointed as executor.
Who is disqualified from inheriting?
Our law, in the form of the Wills Act, provides that no one (or their spouse) can receive “any benefit” under a will if –
  • They signed it as a witness (unless it was also witnessed by two other competent people not receiving any benefit), or
  • They signed it for the testator (even though in their presence and at their direction), or
  • They wrote out the will or any part of it in their own handwriting.
“Any benefit” in this context means not just inheritance as an heir, but also appointment as executor, trustee or guardian. A court can only allow such a person to inherit “if the court is satisfied that that person or his spouse did not defraud or unduly influence the testator in the execution of the will”. Importantly (as we shall see below), it is up to the heir to prove the absence of any fraud and undue influence. As the Court put it: “This disqualification exists in order to prevent falsity and fraud, and to prevent ‘the exertion of undue influence over people in bad health or in feeble state of mind’. This is because the fact that someone who stands to benefit from the death of a testator in terms of a will, and who is involved in the drawing of the very will in which that benefit is declared, ineluctably invites speculation that he or she may have improperly influenced the testator in the framing of his final testament, more particularly so where the will is executed at a moment of crisis in the testator’s life.” If the beneficiary would have inherited anyway under intestacy (i.e. if the deceased had not left any valid will at all) they may still inherit but no more than the value of their intestate share.
The facts of the family fight
  • In poor health and realising he needed a will, the testator had asked a friend to help him draw one. The friend produced a typed will, in terms of which each of the testator’s three children (from two different marriages) received one third of his estate. In addition a son-in-law was appointed as executor.
  • The will was, said the Court, “slightly unusual” in that it included a narrative on the father’s difficulties with his third wife, but the real problem (as it turned out) came from the fact that annexed to it was a four-page typed schedule of 69 assets with spaces against each of them for insertion of the name of the child to receive that asset. Critically, those names were filled in by hand by one of the daughters – on, she said, her father’s instructions.
  • The will and schedule were properly signed and witnessed, and the father died five days later.
  • As is regrettably all too common when a deceased leaves behind children from more than one marriage, a fight developed between them, with a claim that the schedule of assets did not reflect the father’s wishes through either fraud or undue influence.
  • The end result (much bitter dispute over facts later) the Court held that the daughter who had completed the names on the schedule by hand was disqualified from inheriting any more than her share on intestacy, and her husband was disqualified from being appointed as executor.
The bottom line
All that dispute, uncertainty and legal cost could have been avoided had the father called in a competent professional to draw his will for him (preferably long before his illness struck). Don’t make the same mistake! Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Jan 26
0

Why Life Partners Still Need Cohabitation Agreements and Wills

By | Family Law, Wills and Estate Planning
“Census data of 2016 reveals that approximately 3.2 million South Africans cohabit outside of marriage and that this number is increasing steadily.” (Extract from judgment below)
What happens if your life partner dies without leaving you anything in their will (“Last Will and Testament”)? Do you have the same protections as married spouses do? A lot of the media coverage around the recent Constitutional Court decision dealing with this question may have given the impression that life partners are now as fully protected as if they were in a formal marriage, but that is not so – not yet anyway. First, some background.
Protections for surviving spouses only, not for unmarried life partners
As a starting point, note that the widely-believed and persistent myth of a “common law marriage” is just that – a myth. And the hard truth is that if a life partner dies intestate (without making a will), the other cannot inherit on the same basis as can a married spouse. Nor can the surviving life partner claim maintenance from the deceased estate on the same basis as a surviving spouse can. Spouses enjoy these protections in terms of two Acts –
  1. The “Maintenance of Surviving Spouses Act” provides for a spouse to claim maintenance from the deceased estate.
  2. The “Intestate Succession Act” deals with cases where a deceased spouse left no valid will and provides for a spouse to receive only a “child’s share” of the estate (in other words, to share equally with any children) – far from ideal of course if the intention was to leave them more, but a lot better than nothing.
Until now those Acts have left any unmarried life partner high and dry. Incidentally, note here that we are talking about opposite-sex life partners in that same-sex partners have for years enjoyed intestate succession rights – an anomaly of which much was made in this court case.
The Court’s decision, and why life partners must still protect their positions
An unmarried man, although intending to marry his (female) partner, died before doing so. He left substantial assets but his will was outdated, leaving everything to his (since deceased) mother. The executor of his deceased estate rejected, primarily on the basis of existing law, her claims to inherit from the estate or to be granted maintenance from it. Confirming High Court declarations of constitutional invalidity, the Constitutional Court held the relevant sections of the Acts to be invalid as they stand, and ordered that they be read so as to include life partners in their protections. However there are critical limitations to bear in mind –
1) The orders of invalidity aren’t in force yet.
The Court suspended the orders for 18 months (to June 2023) to give Parliament time to remedy the defects. Perhaps Parliament will move quickly on this and do the necessary before mid-2023, but perhaps it won’t. And in the meantime, your lack of protection remains.
2) You will still have to prove your entitlement.
You will have to convince the executor and Master of the High Court (possibly in the face of opposition from the deceased’s other family members) that –
  • You were in “a permanent life partnership” (our courts apply a number of tests in assessing this),
  • As partners you “undertook reciprocal duties of support” (in this case the partners were held to have been “involved in a relationship that comprised most, if not all, characteristics of a marriage”),
  • For your maintenance claim, that your claim is for your “reasonable maintenance needs”, and
  • For your intestate succession claim, that you have “not received an equitable share in the deceased partner’s estate”.
Even if you think you will have no problem in proving all those things, it is of course much easier and safer to avoid any possible grey areas or dispute by properly recording your status and your agreed undertakings to each other.
3) “Intestate” Succession is always second prize.
As we said above, a “child’s share” of an estate is a lot better than nothing, but if you want your partner to inherit everything, dying without a will risks prejudicing them badly. Leaving a valid will is the only way to nominate the executor of your choice, and to choose for yourself what happens to your estate on death. It could well be the most important document you ever sign.
Life partners: Sign wills and a cohabitation agreement – now!
That’s a lot of uncertainty and potential for conflict and delay, and there could well be a lot at stake (in this case, some R10m worth of assets in total) but the good news is that it is all very easily avoided –
  1. Have professional wills drawn up (or have your existing wills checked for necessary changes or updates) and
  2. Enter into a full cohabitation agreement recording exactly what your status is and what undertakings you make to each other. Remember there is no such thing as a “common law” marriage in South Africa – if you aren’t formally married, a cohabitation agreement is the only safe alternative.
A final thought – no one likes to contemplate their own deaths, but Death by its very nature often knocks without warning, and we live in particularly dangerous times. So don’t delay – get moving on this now! Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Nov 25
0

Don’t Let Delays in the Master’s Office Leave Your Family in Financial Distress

By | Wills and Estate Planning

“Someone’s sitting in the shade today because someone planted a tree a long time ago” (Warren Buffett)

Whilst the first and most important step in your estate planning is always to have in place a professionally drawn and regularly updated will (“Last Will and Testament”), there is another aspect which demands your urgent attention, particularly now…

What will your family live on while an executor is being appointed?

It is essential that you provide for your family’s ongoing financial needs during the process of winding up your estate, because all your bank accounts will be frozen as soon as the bank learns of your death, pensions and the like take time to transfer across, and your assets generally will be tied up in your estate and inaccessible to your loved ones.

The executor of your deceased estate does have the power, provided of course that your estate is solvent and has sufficient funds, to release money to your dependents and to make advances to your heirs – but only after being formally appointed. Which brings us to…

Delays in the Master’s Office are getting worse

No matter how professional and efficient your nominated executor may be, he or she is powerless to act until the local Master of the High Court (“Master’s Office”) issues the necessary “Letters of Executorship” (“Letters of Authority” in smaller estates), so applying for them is always a priority for those nominated.

The issuing process has never been a quick one, but delays have worsened substantially in the past few years with media stories abounding of major problems in Master’s Offices around the country and reports of “unprecedented backlogs” and “an almost total breakdown in services”.

The recent ransomware attack on the Department of Justice and Constitutional Development is just the latest in a litany of woes afflicting these offices – pandemic-related lockdowns, office closures and remote working, staff shortages and a surge in the number of deaths, a Special Investigating Unit investigation into allegations of misconduct and corruption in some offices (with two officials suspended so far and many others reportedly in the firing line) – the list goes on.

Nominated executors are complaining of inordinate delays in being appointed, and of extreme difficulty in communicating with Master’s Office officials by phone, email or even by personal office visits.

Here’s how to fund your loved ones in the interim

The bottom line is that you will leave your grieving family dealing with financial worries at the worst possible time if they have to wait for your chosen executor to be appointed.

You need to find another way of giving them immediate access to funds, enough to cover their living expenses and any new expenses like funeral costs.

There are a few tried and tested ways of providing this cash flow, with separate bank accounts and investments being probably the simplest and most quickly accessible options. Consider also other assets in family members’ own names, family trusts, businesses held in entities that will survive your death, and so on. Another popular choice is life/endowment policies, TFSAs (Tax Free Savings Accounts) based on a life product, living annuities and the like – be sure to nominate beneficiaries for these products otherwise they will fall into your estate and not be paid out to your loved ones direct. Be certain that your loved ones know what measures you have taken and how they can access these funds quickly and easily.

Your own situation will be unique and you need to structure everything correctly, so there is no substitute for professional advice here!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews