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Author: AED Attorneys

What is the Difference Between a Curator and an Administrator?

As people grow older, they may be debilitated by mental or physical ailments, which leave them unable to manage their finances, and sometimes even daily affairs. These people who suffer from diminished capacity are highly vulnerable to being taken advantage of by friends, family or scammers.

In South Africa, the law offers three mechanisms to protect people of diminished capacity in such circumstances. However, it is essential to remember that this mandate is only valid for as long as the physically or mentally incapacitated person is alive.

The three mechanisms relate to appointing either a Curator Bonis, an Administrator or setting up a Trust. In this article, we are going to examine the difference between a Curator Bonis and an Administrator.

What is a Curator Bonis?

A Curator Bonis is a person appointed by a Court to manage the finances, property, or estate of another person who cannot do so because of mental or physical incapacity. A Curator Bonis is also used to protect the interest of minor children in marital disputes.

In order for a Curator Bonis to be appointed, an application must be brought before the High Court declaring the individual incapable of managing their own affairs. There are three types of Curatorships:

  • Curator ad litem, who is a Curator who litigates on behalf of the patient.
  • Curator ad personam, who is a Curator who oversees the patient’s daily living needs.
  • Curator Bonis who protects the patient’s property and financial interests.

The cost of bringing a Curatorship to court is very high (between R50,000 and R100,000 at the time of writing). In addition, the application requires medical reports from a neurologist and a psychiatrist, which adds to the costs.

In terms of Rule 57 of the Uniform Rules of Court, the High Court is then required to make an order declaring the patient of unsound mind and incapable of managing their own affairs.

While the Curator Bonis may have been approved by the Master of the Court, they will have limited powers to make investments, which can affect the estate’s assets. Due to the fact that a Curator Bonis is not well remunerated, it is difficult to find candidates who are capable and understand the seriousness of their role in assisting the incapacitated person.

What is an Administrator?

The Master of the High Court may also appoint an Administrator to manage the property of a person who has been diagnosed as mentally ill or who has such a severe disability that they are unable to manage their affairs.

This procedure is far less costly than having a Curator Bonis appointed. However, one of the requirements for an Administrator to be appointed is that the patient’s assets do not exceed R200,000 in value. If the individual’s assets exceed this amount and their income is above R24 000 per year, the Master of the Court will insist on a further investigation before an Administrator is appointed. This process may cost up to R15,000.

Any person over the age of 18 may make an application, and the patient must be diagnosed by at least two independent medical or mental health practitioners. Both medical certificates, each no older than seven days, must be supplied on the application, together with:

  • Reasons why the applicant is not the spouse or next of kin – if they are not.
  • Steps that were taken to establish the next of kin or spouse.
  • A statement regarding the value of the property and income of the patient
  • Proof that a copy of the application has been submitted to the mentally incapacitated patient.

What Other Differences are There Between a Curator Bonis and an Administrator?

While the Curator Bonis is appointed by order of the High Court and set up in terms of common law, an Administrator is appointed by the Master of the High Court in terms of Section 63(3) of the Mental Health Act and set up in terms of the Mental Health Act.

A Curator Bonis may be used for an individual who is either mentally or physically incapacitated, while an Administrator may only be appointed where the individual is mentally incapacitated.

It is important to note that, in South Africa, if a patient’s mental capacity deteriorates below the legal threshold, that the Curatorship or Administration role will fall away. If the nominated Curator or Administrator continues to act on the patient’s behalf under these circumstances, their actions are tantamount to fraud. This can obviously leave some families in a challenging position.

In conclusion, it is always best to consult an attorney who can offer comprehensive advice on all aspects of Estates, Wills, Trusts and the administration of deceased estates to ensure that an appropriate solution is found to manage the affairs of someone who is mentally or physically incapacitated.

AED Attorneys demonstrates empathy through its tackling of bureaucracy and red tape that causes delays and stress. We have all the contacts and information necessary to ensure a relatively painless process in all legal matters.

AED Attorneys understands that every situation is unique, and although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided.

Essential Documents To Prepare Before You Die – An Inside Perspective

Death does not discriminate, and as Benjamin Franklin pointed out, “In this world, nothing can be said to be certain, except death and taxes.” We may not know when we are going to die, but we do know that it will happen, however, there are some fundamental actions that you should carry out before this happens.

With a bit of preparation, you can put yourself at ease and save your loved ones a lot of turmoil and confusion later. While contemplating your impending passing from this life may be a rather depressing subject; it is necessary to ensure that your family knows where your Last Will and other relevant documents are in the event of your death.

How Long Will It Take To Finalise My Estate?

When you or someone close to you dies, it can take anywhere from 7 months up to a couple of years to finalise the relevant Estate – incurring additional costs, stress, and heartache along the way. Even if you have been diligent enough to update your Will, there are many more documents that will be required in the event of your death. A simple solution to avoid the chaos of your family trying to locate all the necessary documents is to create a Life File. This is a folder or a box which contains the paperwork that your family will need when you die. Remember that you are never too young or too old to put a Life File together.

What Are The Important Documents Needed When I Die?

Some of the documents that need to be readily available in the event of your death include:

  • Your original Will – remember to keep this updated as your circumstances change.
  • Your Living Will (if you have chosen to have one).
  • Proof of any Funeral Policies that you may have. These will take the financial burden off your family.
  • A copy of your I.D.
  • A copy of your Driver’s License.
  • A copy of the I.D. of your nominated/proposed Executor.
  • A copy of the ID’s of your beneficiaries – this must always be kept up to date.
  • A copy of your marriage certificate (and Antenuptial Contract, if applicable).
  • Your Income Tax number (plus VAT number too, if applicable).
  • A list of your assets, with approximate estimated values. Furniture and household items can be grouped with these. This will help you calculate your worth so that your Financial Planner can put a suitable plan in place for your beneficiaries after your death.
  • If there is any immovable property, e.g. residential homes, a copy of the relevant municipal accounts (plus a copy of title deeds, if available), details of the existing bondholder and the bond account number will need to be provided.
  • A copy of your recent bank and credit card statements (which will need to be kept updated).
  • Any Share Certificates that you may own.
  • Details of any Insurance policies – ensure that these policies are always kept up to date.
  • Employers details, including your latest salary slip (if you are employed).
  • Pension details (if applicable).
  • Motor vehicle registration papers.
  • List of claims in favour of the Estate, i.e. any money owed to you.
  • List of the Estate liabilities, i.e. any money owed by you.
  • A comprehensive list of all your online accounts, login details and passwords.
  • Your firearm/s – a copy of firearm license/s, details of whereabouts of the firearm/s.
  • Your medical Insurance details.
  • Any specific instructions that you have which must be acted upon at the time of your death.

Keep Your Life File In A Safe Place

Once you have all of these documents together, you will need to put them into one box or one folder and store it in a secure place – preferably your safe, a safety deposit box or with your Attorney Remember to inform a family member, friend, or the Executor of your Will as to where this file can be found.

Failing to keep your records and documents updated, or in a single place, could have emotional and financial consequences for your loved ones. If you do not keep an updated Will, you run the risk of your possessions and wealth ending up in unintended hands.

You will find that there are so many details to consider once you start putting your Life File together. For example, have you considered becoming an organ donor, setting up a Power of Attorney or a Living Will, appointing a health proxy (in the event that you become incapacitated and are unable to make life decisions for yourself)?

Consult An Attorney To Assist With Your Will And Estate

Each person has a unique set of circumstances, and whether you have a modest income or own a vast empire, it is judicious to consult a professional, such as an Attorney in this regard. Remember that your life can change at any moment, so do not procrastinate in getting your Life File in order, no matter what age you are.

AED Attorneys has been in operation since 2014 and has all the resources to advise you in these matters efficiently. We have considerable experience when it comes to drafting Wills and finalising your Estate.

Annie Davids, Founder of AED Attorneys, says, “It is important to leave a legacy and provide for your family’s future.” AED Attorneys will assist you in appointing an experienced Executor, who is responsible for the administration of your Estate, and a Trustee who will administer the Trust once the money has been paid into it by the Executor. AED Attorneys will also ensure that any estate duty taxes are legally minimised.

For further information, or to set up an appointment, contact AED Attorneys. *AED Attorneys understands that every situation is unique, and although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable, for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided.

When To Remove Your Wedding Ring After Your Spouse Has Died

The loss of your spouse, the person with whom you chose to spend the rest of your life, is possibly one of the most daunting experiences. A challenging decision that arises soon after your spouse’s funeral has passed and life has settled down to some form of semi-normality, is what to do with your wedding ring.

Do you leave it on your finger or do you remove it? If you take it off – what do you do with it? If you leave it on – should you move it to the other hand? This takes a lot of thought and ultimately only you can decide on its destiny.

Your wedding ring is a symbol of your love and of the day that you dedicated yourself to your spouse. As such, it symbolises your togetherness and is a profound item of significance.

Weigh Up Your Options

Your decision about what to do with your wedding ring is one that should not be rushed. You need to carefully balance your volatile emotions with your options to avoid regrets in the future. If you speak to any person who has lost their spouse, it will soon become clear that there is no right or wrong choice regarding what to do with your ring. Some people choose to continue to wear it for the rest of their lives, while others remove it almost immediately after the death of their spouse.

No Right Or Wrong Decision

Sonja Smith, MD of Sonja Smith Funerals, an elite funeral group since 2006, says, “Many spouses ask me about the etiquette of removing a wedding ring after the death of their partner. I advise them that they need to do whatever they feel is right for them because every person is different. There is no right or wrong decision in this matter.

Some Ideas of What to do With Your Wedding Ring When Your Spouse Dies

  • Continue wearing the ring. Many widows/widowers continue to wear their wedding ring until they feel ready to take it off. Some will continue to wear it forever. Wearing the ring enables the widow/widower to retain a sense of closeness to their departed spouse. It may also act as a deterrent to unwelcome romantic advances, until the wearer is ready.
  • Move your wedding ring to your other hand. Sometimes, people who have been widowed take what they see as a small step towards letting go and move the ring from their one hand to the other. They feel that they can continue to hold onto their spouse whom they deeply loved, but at the same time indicate that their circumstances have changed, without having to say a word.
  • Repurpose the ring into other pieces of jewellery. Redesigning your ring can signal an acknowledgement of your new future, while avoiding losing touch with your precious ring. You can also choose to add a memorial diamond which can be crafted from your spouse’s ashes.
  • Attach it to a chain and wear it around your neck. This is common practice with widows, more so than with widowers. It is a good remembrance option since you can keep the ring close to your heart while indicating your marital status.
  • Keep it as an heirloom to pass onto your children when they marry. Your ring may have initially been an heirloom, or you may want to turn it into a future heirloom. Either way, you need to specify this in your Will to ensure that it goes to the correct person after your passing. While you are alive, you may want to pass it onto your child for their wedding.
  • Put it away in the safe. If you do not feel comfortable wearing your ring anymore and have no idea what to do with it, put it in a safe until you settle the matter in your mind.
  • Donate it. Many non-profit organisations accept and resell jewellery to fund their operations. If you are open to a good cause, then this may be an option. However, you would need to be comfortable with not knowing where the ring ends up. This may be very difficult for some people.
  • Send it off ceremoniously. You may like to use your ring in a ceremonial farewell where you cast it into the ocean or bury it in a particular place as a final farewell. Include close friends or family to make this a special occasion.

When You Should Remove Your Wedding Ring After The Death Of Your Spouse

There are very few cases in which you should stop wearing your ring after your spouse’s death. These are two of them.

  • The first is if your wedding ring causes you intense emotional pain, then it would probably be better to remove it and store it somewhere safe until you feel able to face it again.
  • The second is in the event of remarriage at a later stage. Continuing to wear the ring may cause your second spouse some unnecessary discomfort, even if they don’t say it, in which case it would be better not to wear it at all.

Ultimately, the choice of wearing your ring or not is entirely up to you. Only you can gauge your thoughts and emotions at the time. What you do with your ring may also depend on your religion or a traditional custom. There is no rush to make a decision either way; you may know from the outset what you want to do, or it may take many years to decide. It is impossible to make the wrong decision. Sonja Smith Funeral Group offers a comprehensive range of services in the event of your loved one passing. We will not only assist with the funeral or cremation arrangements, but also with bringing the deceased into our care, assisting with financial matters, offer funeral cover and professional advice. Contact your nearest Sonja Smith office for advice. 

The Importance Of Appointing A Guardian In Your Will

One of the most important decisions you will need to make as a parent is choosing a suitable guardian for your children in the event that both parents pass away. As difficult as it may be to imagine someone else bringing your child into adulthood and making all the necessary, even life-changing decisions on your behalf, it is absolutely vital to ensure that any child under the age of 18 is left with someone responsible, trustworthy and emotionally mature.

A guardian will take on the responsibility of making major decisions for your child and on behalf of you. This same guardian will also assist the underage minors with any necessary contractual matters. Furthermore, these minors will require their guardian’s permission to marry, apply for a passport or travel out of the country. If more than one person has guardianship of your children, then both guardians’ consent will be required.

A guardian is required to provide the child with accommodation, food, clothing, education and medical care until they reach a stage when they can support themselves.

Your Will should therefore not only contain details about how your assets and finances will be distributed but should also nominate the chosen guardians who will need to take care of your children during a very traumatic time. Remember that the guardians you choose will need to invest their time and interest in your children, as well as bring them to terms with your passing. It is therefore very important for your children to feel comfortable with them.

How Children Are Protected Under The South African Constitution

The Children’s Act 38 of 2005 governs the laws relating to the care and the protection of children. The guiding principle, in all matters, is the best interest of the child. Furthermore, this Act intends;

  • to give effect to certain rights of children as contained in the Constitution;
  • to set out principles relating to the care and protection of children;
  • to define parental responsibilities and rights;
  • to make further provision regarding children’s courts;
  • to provide for the issuing of contribution orders;
  • to make new provision for the adoption of children;
  • to provide for inter-country adoption;
  • to give effect to the Hague Convention on Inter-country Adoption;
  • to prohibit child abduction and to give effect to the Hague Convention on International Child Abduction;
  • to provide for surrogate motherhood;
  • to create certain new offences relating to children; and
  • to provide for matters connected therewith.

Section 27 of this Act deals with the Assignment of Guardianship and Care and lays out that;

  • A parent, as the sole guardian of a child or who has sole care of a child, may appoint a fit and proper person as guardian in the event of their death;
  • This guardianship appointment is required to be specified in a Will made by the parent; and
  • The person appointed acquires guardianship or care of the child after the death of the parent AND on the parent’s express or implied acceptance of the appointment.

Who Can Be Appointed As A Guardian?

It is important to note that any other person with an interest in the well-being of your child may approach the High Court for an Order to grant them this responsibility. However, the final decision on a guardian for the minor child always rests with the High Court of South Africa. This Court is the Upper Guardian of all minor children and cannot grant an Order contrary to the best interests of the minor. The Court allows any minor of a certain age, level of maturity and developmental stage, to have a say in the matter of their guardianship.

Appointing A Family Member As A Guardian

Although family relatives may be your first choice when it comes to appointing a Guardian for your minor children, it is becoming more common for parents to name close friends in their Will as Guardians. This may be due to several circumstances relating to relationships, schooling, finances and lifestyles.

Alternative Guardians

It’s always wise to plan as far as possible, and although you may have chosen a guardian or guardians for your child, divorce, separation, and even death can happen in your nominated family. It is therefore prudent to ensure that you nominate a second choice of guardian, in the event that the primary guardian/s are no longer able to take care of your children.

Nominating Guardians In Your Will

After carefully selecting the primary and secondary Guardians for your children, it is important to make this known in your Will. Should your circumstances change during the course of your life, or as your children grow older, the guardianships may need to be reviewed from time to time.

AED Attorneys For A Well-Structured Will

AED Attorneys provides understanding, and a personalised touch in the legal sphere, dealing specifically with three processes that often get lost in the myriad of services of larger legal firms — namely; Wills and Trusts, Administration of Estates, and Property Transfers.

AED Attorneys will ensure your peace of mind at the time you create your Will, by providing you with sound advice on many matters you may not have considered, including the guardianship of children.

The information provided in this article is aimed at providing general guidance to the nomination and appointment of a Guardian or Guardians to your underage children in the event of your death.

AED Attorneys understands that every situation is unique, and although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable, for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided. Instead, AED Attorneys invites you to set up an appointment with them so that they can advise you on your personal circumstances. They have the capability to efficiently assist you by detailing the entire guardianship process in easy-to-understand terms and clarify any financial implications that you may have overlooked.

Clearing A Parent’s Home After Their Death Ou – The Practical And Emotional Aspects

Clearing out your parent’s home after their death is both emotionally and physically taxing. Within a short space of time, you are required to consolidate a very dear person’s life, while grief is still deeply rooted in your heart. Memories will intrude as you walk from room to room in their home and see walls and corners filled with their belongings, bringing them to life again. The thought of giving their things away and removing their presence seems so disrespectful and irreverent. You have a longing to leave everything the same in a time capsule that can reflect their very last essence.

Just as you wondered how you would possibly cope in a world without them, so too it seems impossible that you would ever be able to do away with any of their belongings. You want to hold onto everything of theirs forever. Unfortunately, you cannot.

So how do you start the cleaning-out process with tight deadlines to meet and a long to-do list? The answer is one step at a time, and then one day at a time.

Secure the Property

You may not be able to immediately clean out the house after your parent’s passing, so you will need to ensure that the property is secured or make contact with their landlord, if they have been renting, to make the necessary arrangements.

Assess and List Your Priorities

You will first need to make a realistic assessment of how big the “clean-out” is going to be. This will entail differentiating between essential tasks that need to be taken care of immediately and then the less critical tasks. Making a list of the priorities and their timeframes will put you more in control of a seemingly impossible situation. Having a Sonja Smith Life File at hand, will ease the burden. Download the Index here.

Some of the items on your list to consider are:

  • Financial: Recent bank statements, account statements, medical bills, SARS
  • Policies: Insurance, Will, shares, investments, annuities, pension, medical
  • Documents: ID, passport, marriage certificate, divorce certificate, death certificate, firearms
  • Home: Insurance, title deeds, bond statements
  • Car: Insurance, vehicle licence
  • Pets: Finding a new home for them
  • House contents: dispersal and disposal of belongings

Don’t Do It Alone

During this time, you need to lean on your support system, especially in the first few weeks. Don’t close yourself off to everyone. People care and want to help you. Divide your list of priorities and task different people within your support system with various tasks.

Time Frames

You will need to determine how long each task will take before your parent’s home is cleared. This may be overwhelming in the beginning as you will uncover items that bring back so many memories of the person whom you have lost. Remember to take breaks as you need them to avoid an emotional overload.

Sorting A Deceased Parent’s Belongings

This has to be one of the most challenging and emotional aspects of tying up a loved one’s estate. People can take weeks, months or even years before they are able to face this significant task.

When you do finally feel ready, the most important thing is to remain organised and methodical by sorting items as follows:

  • What items will I keep?
  • What items will others want?
  • What items will be donated?
  • What items can be recycled?
  • What items can be sold?
  • What items can be thrown away?

Where to Start

The easiest is to start with one room at a time and to move around the room from your left until you have finished. You can then move on to the next room similarly. Preferably start with rooms that may not be so emotionally hard to deal with, depending on your level of grief at the time.

Remember that you will need ease of access, so make sure that the boxes are packed and stored clear of doorways. Use coloured labels or stickers to separate the items and be realistic about the things you separate in terms of their usefulness or sentimentality. If nobody is going to wear the clothes or read the books, then rather donate them to a charity in need.

For those hard to part with items, remember that you can always take photos of them and create a memory book afterwards. If it all gets too much for you, your loved one’s belongings can be separated and put into boxes for a later stage, when you are feeling stronger.

Making the Clearing Out a Little Easier

Before you start clearing out each day, bring yourself some drinks and snacks and make sure that there is soap, toilet paper and towels available for the cleaning up. Open the curtains and windows to let in some fresh air and light. Turn on the radio to break the silence.

At the end of each day of your sorting, throw away the rubbish and take the donated items to charity immediately. Try not to work yourself until the point of exhaustion and when you go home, remind yourself that you are one day further than you were the previous day.

Absent Family During the Clearing Out

If there is a family member who cannot be present during the sorting, make sure that you ask them if there is anything specific that they want to keep as you may not realise how much sentimental value something may have for someone else.

Be Patient with Yourself

Clearing out a deceased parent’s house is not an easy process. You will need to allow yourself time and acknowledge that you will feel a lot of emotions during the process. Once you have finalised your task list, you will need to establish the time limit for each task.

It helps to keep these goals as small as possible so that you can cope emotionally. Giving yourself these goals will also allow you to see the results during this emotionally draining process and ensure that you set boundaries for yourself.

Lastly, remember that surrounding yourself with people who love and support you, will bring shared memories, some tears and some laughter.

You can rely on Sonja Smith Funeral Group to handle the arrangements for a parent’s funeral, cremation and/or memorial service with efficiency and empathy, ensuring that the final farewell is arranged with care and attention to detail.  The branch closest to you can be found here.

 The Living Will  

No one wants to think about death, but what happens if you are in an accident and being kept “alive” by artificial means? Should your family consider switching off the machines? Do they know what your wishes are in that regard? Does the doctor agree?

Unlike a Last Will and Testament, which stipulates the manner in which a deceased’s worldly possessions are dealt with after death, a living will relates to your end-of-life wishes while you are still alive.

A living will is a legal document that allows your medical provider to know what your wishes are regarding life-prolonging medical treatments in case you are unable to make or express your own decisions. Living wills are most often used to state that, should there be no reasonable chance of recovery, you do not wish to be kept alive through artificial life support. They are also called “advanced health care directives”.

According to the Living Will Society of South Africa, four conditions must be met for a living will to be ethically valid:

  • The patient must have issued the directives when they were aged 18 or over.
  • The patient must have had the mental capacity to make their own medical decisions at the time of issuing the directives.
  • A patient may only refuse consent to treatment if they have been fully informed about their condition and proposed treatment.
  • The patient did not change his or her mind after issuing the directive.

The advantages of living wills are that these directives respect a person’s human rights and, in particular, their right to reject medical treatment. A living will also assist medical professionals in making tough decisions and thus avoid the situation where the patient’s family and friends have to take a life-ending decision.

Prolonging life unnecessarily is highly distressing for loved ones, and the medical costs involved can place a financial burden on your family. Having a living will with clear directives about your wishes can save your family a lot of anguish and despair.

One thing to note regarding a living will in South Africa is that it cannot include directives for euthanasia or physician-assisted suicide. You can, therefore, ask for treatment to be withheld, but you cannot ask a doctor to end your life.

We advise that whilst you are drafting a new Last Will and Testament or revising an existing Will, that you request your Attorney to assist you with a living Will. Please note, however, that we recommend that clients separate a living will from their Last Will and Testament, given that the latter only becomes legally enforceable after death.

Planning for the end of life, in as far as we can, may bring peace of mind to ourselves and to our family. Drawing up a living will is an important practical part of this process.

Tax and Deceased Estates

Benjamin Franklin once said, “Nothing in this world is certain but death and taxes”. A sentiment that still holds true today.
There are several types of taxes associated with deceased estates. Not all of these taxes are applicable to each and every estate. The circumstances of the estate will dictate which taxes are applicable to that estate. These taxes can include the following:

  1. Income Tax: As a general rule, the Income Tax Act provides that when a person dies, he is deemed to have disposed of all his assets to his deceased estate for an amount received equal to the market value of those assets and the deceased estate is deemed to have acquired the assets for this market value. There are, however, exceptions to this rule: for example, the assets accruing to the surviving spouse upon the death of the first dying spouse are not deemed to have been disposed of on the death of the deceased.
    Persons who passed away on or after 1 March 2016, and where the Executor of the estate had received post date-of-death income or there were certain acquisitions/disposals of assets by the Executor after the date of death, will be subject to the second income tax registration (new income tax entity).
  2. Value Added Tax (VAT): If the deceased was registered as a VAT vendor, the Executor may have to register the estate for VAT purposes and there may be VAT implications.
  3. Estate Duty: All income received or accrued before the deceased’s death is taxable in the hands of the deceased up until the date of death, and will be administered by the Executor acting as the deceased’s representative taxpayer. After the date of death of a person, a new taxable entity comes into existence – the “estate”. Estate duty is currently charged on the dutiable amount of the estate at a flat rate of 20%. The dutiable amount is calculated by deducting a R3.5 million primary abatement from the ‘nett value of the estate’. It is important to note that the value of all property included in the deceased’s estate, which accrues to the surviving spouse, either in terms of the deceased’s will or by intestate succession, can be deducted to the extent that it has been included in property.
  4. Capital Gains Tax (CGT): Any Capital Gains Tax which would be due is payable before the inheritance is transferred to the beneficiaries. The acquisition of an asset does not give rise to a capital gain at the time of inheritance, and any capital gain or loss is only calculated when the asset is ultimately sold or disposed of.

As you will note from the above, deceased estate taxes are quite complicated. It is advisable to have a professional tend to the deceased estate’s taxes in order to ensure that all SARS’s requirements are met. One further needs to be aware what the capital gains tax and the estate duty liabilities are likely to be in order to ensure that the estate has adequate liquidity to avoid the forced sale of assets.

Domestic partnerships and the Intestate Succession Act

A domestic partnership or cohabitation, as it is also known, is where two individuals live together but are not married. Today, this form of intimate partnership is becoming increasingly popular in South Africa. According to the 2011 Census, more than three million or 8,6% South Africans were involved in relationships of this nature.

A domestic partnership, irrespective of its duration, is however not deemed to be a ‘common law marriage’ and despite numerous recommendations and the publication of a draft Domestic Partnerships Bill 2008, South Africa has no dedicated domestic partnership legislation. Consequently, the laws that protect individuals in a marital relationship do not protect individuals who are in a domestic partnership.

Therefore, if a partner in a domestic partnership dies without leaving a valid will, the partner has no legal right to inherit under provisions of the Intestate Succession Act 81 of 1987.

The Intestate Succession Act, in simple terms, provides a set of rules on how the deceased’s estate will be divided between spouses, descendants and family members. It only applies when there is no valid will. In most cases, the largest portion of the estate will go to a spouse and then equal amounts are distributed to the descendants, depending on the value of the estate. However, where there are no spouses or descendants, the estate will go on to be divided between living family members according to the stipulations contained in the Act.

In recent times, the rights of intestate succession in terms of the Intestate Succession Act have also been extended to surviving partners of couples married according to the Islamic Law as well as unmarried same-sex domestic partners. The heterosexual domestic partnership is currently the only recognised form of intimate relationship that remains excluded from this benefit.

Consequently, it is of utmost importance for partners in a heterosexual domestic partnership to draft a valid last will and testament if they would like their partner to inherit from their estate.

Do-It-Yourself Last Will and Testament: pitfall posssible

Estate planning is the process of legally structuring the future disposition of current and projected assets. Estate planning helps you look after your family’s financial security and maximize the value of your estate by reducing taxes and other expenses. One of the tools of estate planning is the Last Will and Testament.

A Last Will and Testament is a specialized legal document incorporating your last wishes and requests with regards to your assets and beneficiaries. It therefore dictates how your estate should be divided when you pass away.

If you die without a valid Last Will and Testament, your estate will be distributed in terms of the stipulations of the Intestate Succession Act 81 of 1987. This may include beneficiaries whom you may not have wished to benefit, or exclude persons whom you would have preferred to benefit.

It is possible to write a Will all by yourself or make use of a generic template without the help of an Attorney. However, there are plenty of pitfalls when drawing up your own Will. For this reason, a do-it-yourself (DIY) will is potentially dangerous and should be avoided.

Possible pitfalls may include the following:

  • A person drafting a Will must ensure that it is clear and concise, represents the true intentions of the Testator, and meets certain legal requirements for it to be valid. Wills drafted by those with little or no experience usually lead to problems. Remember: when a Will “speaks”, the person who made it is no longer there and consequently the Will cannot be remedied.
  • If you have minor children or a disabled child, it is advisable to create a Testamentary Trust in your Last Will and Testament. A Testamentary Trust only comes into effect upon the death of that person. The Will then operates as the trust deed spelling out the terms of the trust. There are certain legal requirements that need to be included in your Will for the Testamentary Trust to be formed by the Master of the High Court.
  • In many instances, Wills are used to direct when and how the bequests should pass to the beneficiaries. A Testator may include as many conditions in his Will as he wants, but not all conditions are valid and binding. An Attorney can advise which conditions are allowed, not illegal, or contrary to norms and morals of society.
  • Tax legislation and decisions made by the courts also impact on Wills and estate planning and, therefore, a Will must be drafted in accordance thereto.

As you will note from the above, a Last Will and Testament is an intricate legal document that must be drafted correctly in order to ensure its validity. It is, therefore, important to have a seasoned practitioner, with the necessary knowledge and expertise, to assist you in drawing up your Will.

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