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Children’s school fees

Written by Design on . Posted in Deceased Estates Administration.

After a parent dies, is the surviving spouse still liable for school fees even if there is no money in the estate?

When a spouse dies it is never an easy process and there are suddenly a great number of things that need to be addressed in addition to dealing with the grieving process. Being married in or out of community of property becomes applicable, whether the deceased spouse has a will or not is also very important as it details who is to inherit and in what manner. If a deceased leaves behind a spouse as well as minor children, things can become even more challenging. There are a great number of laws and variables that can influence events after the death of a spouse including the responsibilities of the surviving spouse and the maintenance due to the children. For the sake of this blog, we will assume that the parents of the child were married or in a permanent civil partnership and living together and that they were the biological/legal parents of the child. 

What happens after the parent of a minor dies?

The surviving spouse becomes the legal guardian of the child. In its most basic form, that is the law. There are situations in which the surviving spouse will not be the child’s guardian, but preference will first be given to the parent. The surviving spouse (parent) is completely responsible for the child as per the Children’s Act of 2005 which requires of a parent to care for a child, maintain contact with the child, act as guardian of the child, and contribute to the maintenance of the child. That contribution can come to rest squarely on the shoulders of the surviving spouse. Here is a very important point though, when a parent dies, their parental responsibilities don’t die with them. Parental responsibilities for a dependent child only falls away upon the death of said child. A dependent child is not just a minor and if the child is older than 18 but still require support from the parent (for example the parent claimed responsibility for tertiary education fees), the child can still claim support from the deceased parent’s estate.

How can the deceased estate help support the surviving spouse and child(ren)?

Before any inheritance claims or payments can be addressed, the debt of a deceased estate is paid. The creditors will always be paid first. Thereafter the beneficiaries of the will can be dealt with or, in the absence of a will, according to the Intestate Succession Act. The care of a minor child will receive preference and even if a will did not make provision for it, the child’s claim to maintenance will still outrank any other inheritance claim.

It could be that there is no cash in the estate to cover the child’s maintenance. In such a situation, assets could be sold off to cover these costs. It could also be that there is no money in the estate at all after all the formalities have been concluded, cash or otherwise. This could cause some problems for the maintenance of the child and it becomes the sole responsibility of the surviving parent.   

What is the surviving spouse responsible for?

As far as the minor is concerned, the surviving spouse is responsible for everything involving the maintenance of the child as we have already discussed. This includes school fees. As per the South African Schools Act of 1996, all children between the ages of 7 and 15 have to attend school and the parent must ensure that this happens.

What to do if the payment of school fees cannot be made?

If the death of a spouse leaves the surviving spouse in a financial bind (or worse) there are options available to them. The parent has to approach the School Governing Body (of a public school) and apply for conditional, partial, or full exemption from paying school fees. If the criteria for exemption are met, the parent can pay the adjusted school fee (or possibly no fee). We strongly encourage any surviving spouse to take this course of action as a public school has the right to take legal action against parents that do not pay school fees. This is only true if the exemption criteria have been applied and the parent is still liable to pay school fees. Note, though, that a learner cannot be excluded from participating in the official school programme due to the parent’s non-payment of school fees, nor can their reports be withheld. These stipulations do not apply to private schools and these schools could suspend a learner if the parent fails to pay school fees. The surviving parent could request to make an arrangement with the school to allow for the continued education of his or her child or they will need to consider moving the child to a public school.

There are many things that a surviving spouse can be left to worry about upon the death of his/her partner. Having attorneys on your side that will truly listen and explain what is happening in the simplest terms can make the legal side of things much easier and leave you to focus on your family. Get in touch with AED Attorneys when you need assistance with a personal touch.

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.

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10 Conveyancing terms you need to know as the property buyer/seller

Written by Design on . Posted in Conveyancing.

The transferring/conveying of property from a seller to a buyer can be a lengthy process that involves multiple people and lawyers. It is essential that the paperwork is done to the highest standard and that the property is properly from the seller’s ownership to the buyers. There is a lot of terminologies and specialised terms that real estate agents and lawyers will be very familiar with when transferring occurs. These terms might be completely foreign to the buyer/seller, and in this article, we would like to fix some of that. Read on to gain some insight into the terminology that can be used when your home is being transferred.

  1. Bond attorney

The bond attorney is one of the three main attorneys that will work to ensure the property is transferred properly. This attorney is responsible for getting the buyer’s bond registered after the home loan has been approved. The bond attorney is usually appointed by the bank providing the home loan. 

  • Bond originator

The bond originator is the person responsible for the new bond application. In other words, it is the buyer that now needs a bond.

  • Cancellation attorney

The cancellation attorney works with the bond attorney, but this individual is responsible for getting the seller’s existing bond cancelled at the bank. He/she is usually appointed by the bank that provided the seller with his/her bond.

  • Conveyancing

Conveyancing is the branch of the law that has to do with the preparation of all the documents to have a property transferred. Conveyancing attorneys have to be registered as such to be able to practice in this specialised area of the law.

  • Bond cancellation costs

The discharge cost is the charge involved in getting the sellers bond cancelled. Whenever a bond is transferred to a new bond provider, additional fees may be charged to be released from the bond early and the seller’s bond has to be settled before the property transfer can continue. 

  • Lodging attorney / Correspondent attorney

Towards the end of the transferring process, once all bonds are ready to be cancelled and/or approved, the transferring attorney will ready all the documentation that needs to be submitted to the Deeds Office. There is crucial documentation that needs to be submitted at the same time or the transfer cannot progress. If the transferring attorney is not in the vicinity of the Deeds Office, he/she can instruct a lodging office to complete this step. The lodging attorney will contact the bond and cancellation attorney to ensure the required documents are submitted at the same time.

  • Rates Clearance Certificate

This certificate is obtained from the municipality in which the property is located. It states that the current owner no longer owes any money on the municipal charges associated with the property. The transfer of the house cannot continue until this certificate has been obtained.

  • Transferring attorney

This attorney is primarily responsible for the transfer of the property. He/she must be a qualified conveyancer and they are usually appointed by the seller. The real estate agency/agent involved in the sale could also advise the seller of a reputable transfer attorney if the seller doesn’t know of one. The attorney oversees all the aspects of the process like administrative tasks, drafting transfer documents, communicating with all the parties involved, etc.

  • Transfer duty

The transfer duty is a cost above and beyond the agreed-to price of the property that needs to be paid to SARS when the property is transferred. The value of the house will determine the value of the transfer duty. This duty needs to be paid to SARS within 6 months of the sale date.

  1. Transfer fees

The transfer fees are also calculated above and beyond the price of the property, but it is payable to the transferring attorney for their services. The final amount is partially determined by the attorneys and partially by the Legal Practice Council’s guidelines as to fees payable to transferring and bond attorneys. 

The home buyer and/or seller doesn’t always need to know the intricacies of what it is the different attorneys are doing, but when they are familiar with these 10 terms, the transferring process can be much easier to understand.

A reputable conveyancing attorney, like those at AED attorneys, will be able to keep the buyer and/or seller fully informed and up to date on what is happening with the transfer of the property so they are never left in the dark or have unexpected expenses pop up.

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.

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How to help your family in the event of your passing – a legal perspective

Written by Design on . Posted in Deceased Estates Administration.

When a loved one passes, chaos often ensues – emotional chaos if not anything else. Added to that stress is the handling of the deceased estate and all the legalities of seeing to it. If the family that is left behind doesn’t know where to find the deceased’s paperwork, the last will and testament, insurance policies, etc, it can delay the finalization of the deceased’s estate by months as they need to find documents and jump through hoops. When this paperwork is all in order, however, and left for the family to find, it can make things much easier.

Some people choose to make a physical file and inform some family members where it is, others choose to make an electronic file and share it with a loved one. Either way, if the file is regularly updated and accessible, you have made sure that there is less stress and tension after you pass.

What should I have in my file?

The short answer is every legal and financial contract you have, copies of everything and all the info they need to access your accounts, policies, and password protected devices, files, and website.

The longer answer is the following list:

  • Funeral arrangements (if you have made any beforehand)
  • Last will and testament
  • All your policies
    • Insurance policies
    • Pension policies
    • Any policy that will potentially pay out upon your death
  • Medical insurance details
  • Important contact details
    • Your lawyer
    • Your banker or financial advisor
    • Your executor
    • Your employer (including the most recent salary slips)
    • Children’s chosen guardian (if applicable)
  • Possessions/Assets/Properties
    • Keep a detailed list of all your assets, possessions, heirlooms to be inherited and their approximate values.
    • Keep a detailed list of any property you own – include all the relevant information like the most recent municipal account, title deeds, mortgage details, rental agreements, etc.
  • Financials – have details available of all your relevant financial dealings and details
    • All your bank accounts
    • Copies of your most recent bank and credit card statements
    • All investments and shares you have
    • Details on how to gain access to your bank accounts and investments
    • All your creditors (if you have any) and the details of the credit you owe
    • All your debtors (if you have any) and the details of debt owed to you
  • Originals or copies of all the important identity documents or certificates
    • Identity document
    • Passport
    • Driver’s license
    • Birth and/or marriage certificate
    • Antenuptial contract or divorce agreements (if applicable)
    • Living life plan for the kids (if applicable)
    • Tax and VAT numbers (if applicable)
    • The nominated/proposed executors and/or guardians ID
    • Beneficiaries IDs
    • Firearm licenses (and details about the location of the firearms and contact details of a trusted firearm dealer)

While it is not a necessity, adding letters to chosen family members in this file can also help them after your passing. If a loved one passes suddenly, the legal documents in your file will probably not provide all the information family members need. If you are an organ donor, for example, and your family doesn’t know, they might find the idea difficult to accept. A letter stating your wishes and choices could provide the final understanding they need.

Keep it safe

The electronic or physical file with all your information must be kept safe and secure. You might not want to put all the information in one place but choose to let one family member keep some information and another family member keep different information. You might want your lawyer to keep it all and just provide your family with his/her contact details.

Part of keeping it safe is also keeping it updated. Some documents, like your payslips, will need to be updated monthly and others, like beneficiaries IDs, will need to be updated whenever changes are made to your will

Should an attorney help you?

It is not an absolute must that an attorney helps you curate the file with all your important information, though it is advisable. In general, everyone should have the same basic information, but no two lives are the same and one person might need to add a document that the next does not.

It is also important for an attorney to assist you in drafting your will and keeping it updated. It will bypass any uncertainty about what happens to your estate. AED has extensive experience in this and will guide you with a kind, knowledgeable hand to draft an airtight will and also create an effective file in the case 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.

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A living funeral – why should you consider one

Written by Design on . Posted in Deceased Estates Administration.

Death is often a taboo subject to speak about, especially if a loved one has become terminally ill or is in his/her old age and growing frailer by the day.  Talking about the fact that the person will pass is, for some reason, unacceptable. During the funeral, we come together to grieve, cry, and praise and remember the person that has passed. It is often how we deal with such an immense loss and there is nothing wrong with it. There are various stages of grief we need to go through, and a funeral helps facilitate at least one of them. What about celebrating someone’s life with them? Celebrate and eulogise them before they are gone and tell what you want them to know. This is a living funeral.

A living funeral?

A living funeral (pre-funeral or Seizenso) is a gathering centred around a person that will soon pass. There are many practical benefits to holding such an event. It is often a perfect opportunity the read the will of the person that will pass and for him/her to clear up any confusion. They can make their last wishes clearly known so no one can contest anything later. It can also be an opportunity to celebrate a life well lived with the person rather than after they are gone and can’t enjoy the celebration with you.

In Japan, living funerals have been held since the 1990s as a way for elderly parents to unburden themselves from their children. After a living funeral, the parent expects nothing from the children, not even a funeral, when they pass. It has sparked displeasure in some because it denies their ancestral significance and others see it as a way for the living to brag about their accomplishments to a captive audience. A living funeral can be and is much more, though.

Actually say goodbye

During a living funeral, your loved one and all their family and friends have the chance to actually say goodbye. It provides the opportunity to eliminate the regret when a person didn’t have the opportunity to see the departed one last time. You can give and receive a hug and share your love for each other and any other memories that are significant to you. Maybe there is one specific memory that will always be a part of you and that formed your character. Maybe they did something life-changing for you and they don’t even know it. This is the chance to share all that. Maybe there are things people need to forgive and ask forgiveness for. During a living funeral, you can do that. It creates an opportunity for all involved to be at peace with the fact that everything has truly been said and done.

Helps deal with anticipatory grief

When you know a loved one will pass soon, we often experience anticipatory grief. It is a complex and difficult emotion to deal with, and a living funeral can help us do just that. As with a funeral after passing, the living funeral creates a safe space in which we can give expression to our emotions of loss, even if it is the impending loss we feel. In this safe space, we can acknowledge those feelings and process them. A part of anticipatory grief is also the anger we feel that the person we love will no longer be there. Having one last hurray with your loved one could help you cope with those feelings of anger too.

Prepare for the absence

When we fully acknowledge why we are having a living funeral, we can help our loved ones prepare for the absence they will experience. It creates a very unique opportunity to explain to the children in our lives what death is and what they should expect. A funeral with the deceased body can be traumatic to some children, but they also need to understand what has happened, why they will never see a loved one again, and why that person’s life is being remembered with such a sombre occasion. The living funeral can aid in explaining all this to children and help them to also see that it is indeed a celebration of a life well lived, not just a sad occasion.

The idea of a living funeral might still be very foreign to many people. It is, essentially, your last party where you can laugh, cry and celebrate the wonder of being human and having shared a life with so many people that love and value you. Always remember that the Sonja Smith Funeral Group is available to chat day and night and can be contacted at 079 895 4414.

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How does POPI affect the administration of a deceased estate?

Written by Design on . Posted in Deceased Estates Administration.

The POPI Act is legislation that has been put into place to protect the personal information processed by public and private bodies. To date, 66% of countries worldwide now have legislation to this effect, with a further 10% having draft legislation according to UNCTAD. Not only is South Africa concerned with data safety, but the use and sharing of personal information to third parties without the consent of the consumer or prior notice is an international concern. This one act affects everyone in the country. Public or private bodies (like law firms) don’t have a choice to comply or risk being charged a hefty fine or jail time and losing their reputation.

POPIA

The POPI Act recognises that “the right to privacy includes a right to protection against the unlawful collection, retention, dissemination and use of personal information.” At the same time, it bears in mind that we live in an information society, and in this society “the need for economic and social progress requires the removal of unnecessary impediments to the free flow of information, including personal information.” This means that the processing of personal information by public and private bodies will be regulated “in a manner that gives effect to the right to privacy subject to justifiable limitation that are aimed at protecting other rights and important interests.”

The Act does not specifically mention that it regulates the administration of a deceased estate. That, however, is the beauty of law as there are several legislations and regulations that all work together to ensure a deceased estate is adequately, legally, and efficiently administered.  These now include the POPI Act protecting the privacy of the individuals involved.

Administering a deceased estate under POPI

When all is said and done, the manner in which a deceased estate is administered will not change all that much. The lawyers and courts involved still need access to the involved individuals’ personal information to complete the administration and will have to keep that information on record. With POPI, they will need to pay more attention to how they store it, though, as the safety of the information is what is truly important. This is not a new concept. Law firms, courts, banks, and other bodies have needed to store and share sensitive information long before POPI came into effect. The administration of the deceased estate and the processing of the necessary data is already highly regulated, which might make one think that the POPI Act is redundant in these situations – not so.

In a world where it is easier than ever to click a button and transfer data, added security measures are necessary. It provides the data subject with clear recourse should his/her data be collected, stored, and used irresponsibly. It also refocuses public and private bodies’ attention on how they process their clients’ data.

Consumers’ attention has also been drawn to how their information is processed, and they have a responsibility too. They should only provide their personal information to reputable public and private bodies. They should think twice before giving their consent for a public or private body to share their information. They should only consent to the sharing of information when it is needed to complete an official process, like administering a deceased estate. 

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.

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How does POPI affect the transfer of property?

Written by Design on . Posted in Conveyancing.

The POPI Act has sent everyone in a bit of a tizzy. Do I have to comply? Does my company comply? Do I have to email our client/newsletter list? Do I have to delete all my data? These questions shouldn’t be new, though, as the Act has been around for quite some time. Now, companies can just receive a rather hefty fine of up to R10 million and be blacklisted. It is this reality that seems to have suddenly hit home.

The thing is, everyone has to comply, and you have to double-check that your company does. You can do this by sending emails to your client/newsletter lists, but it doesn’t mean you will have to delete all your data.  There are some industries and some transactions that deal with a lot more personal data than others. In these industries, professionals have to cross their t’s and dot their I’s. The Real Estate industry is definitely one such example.

The POPI Act

By now, we all know that the POPI Act has been put in place to protect consumer’s personal data. A company has to responsibly collect, process, store, and share personal information or face the risk of paying civil damages or being sued. There are exclusions and exemptions to the Act. If data has been de-identified to the point that it cannot be re-identified, and if the data is connected to terrorists and related activities, it is excluded from the Act. If the public interest outweighs the privacy of the individual or if the processing of data involves a clear benefit to the Data Subject or Third Party, it is exempt from the ACT.

What about Property Transfers?

Whenever you buy or sell a property, there is a lot of personal information that needs to be provided by the buyer and seller and shared between interested parties, from the real estate agent to the bank to the attorney(s) involved. The real estate industry and the law firms that form part of it were already heavily regulated long before the POPI Act came into force. This means that the data disclosed to interested parties is also already regulated. What the POPI Act had done, however, is create another layer of protection for the consumer and a clear avenue of recourse should their information not be processed responsibly. It also brought South Africa more on par with the same type of privacy laws already in effect in other countries worldwide. 

The disclosure of information when a property transfer takes place will still happen; it has to. Private information about the buyer and seller still needs to be shared amongst stakeholders in the transaction. The focus now is on how stakeholders will do so responsibly. This includes receiving explicit consent from the buyer and seller that the necessary information may be shared. That information has to be stored securely and only shared among stakeholders.

Luckily, this type of data security has already been in place at reputable mortgage originators, estate agents, insurers, and attorneys. Their responsibility now is to ensure that all individuals that have to work with the data are fully aware of the seriousness of keeping it secure and that individuals can be personally liable if they compromise it.

Consumers also need to act responsibly when they are asked to share their own personal information. Make sure you are working with reputable companies. You can even go as far as to ask how they are ensuring that your data is safe and how they are staying POPIA compliant.

AED Attorneys understand how precious your personal information is. We do not disclose any of your information unless it is done with your consent and for the specific purpose of transferring a property that you are either the buyer or seller of. 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.

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Do I have to report my late spouse’s estate if he/she did not own anything, but we were married in a community of property?

Written by Design on . Posted in Deceased Estates Administration.

When a spouse passes away, there are a great number of things that must happen, and you are often responsible for a lot of them. You might have to locate the will, call his/her employer if they were employed at the time, talk to your insurance company, notify your accountant, change the property titles, and more. Your marriage status, in or out of community of property, will have a big effect on exactly what happens when a spouse passes away.

In or out of community of property

Being married out of community of property means that what is mine stays mine and what is yours stays yours even after you are married. The estates don’t join into one shared estate and all assets and liabilities remain each spouse’s own responsibility. You can choose to have an out of community contract with accrual, however, where spouses share the assets that accumulate after they got married and increase their wealth together.

Being married in community of property means that everything you had before your marriage is joined into one shared estate and everything you gain after marriage is also part of that joint estate. The assets and liabilities are effectively shared 50/50. Both parties are responsible for the debt of the individual and any financial decisions must be agreed upon by both spouses

What does all this mean when a spouse passes away?

If you are married out of community of property excluding accrual, your spouse’s estate will be wound up. If there is a will, it will usually be adhered to, except if there are discrepancies or claims made against it. If accrual was part of the contract, it can be a bit more complicated, and the details of the contract will determine much of what happens. Some assets, for example, can be excluded from the estate to which accrual applies.

If you were married in community of property, things can be quite complicated at first. The question of whether you should report your late spouse’s estate because he/she did not own anything is not really applicable, as your late spouse did not have an estate, you had one together. That joint estate must be reported to the Master of the High Court.  

That estate needs to be dissolved because there cannot be a joint estate with just one owner. The surviving spouse could be left in a tough spot as an executor needs to be appointed after the estate is declared and the solvency of the estate determined. While this takes place and upon reception of the death certificate, banks usually freeze the accounts, and the surviving spouse might not have access to the shared finances even though he/she has claim to 50% of the value of the net joint estate. Any accounts that were not joint accounts, i.e. accounts in the surviving spouse’s name, will not be frozen.

After the executor is appointed and the solvency determined, the debts, for which the surviving spouse is also partially liable, need to be settled. Once this has taken place, the surviving spouse becomes entitled to 50% of what is left, and the deceased half of the estate will be distributed as per his/her will should there be no discrepancies and no claims against the will.

What should I do?

There are several important considerations to keep in mind. Firstly, if you are looking to get married, consider if you want to get married in or out of community of property. If you choose out of community of property, have a detailed ante-nuptial contract drafted to eliminate confusion upon the death of a spouse. Secondly, you should talk to your spouse about what will happen and what your wishes are when you or your spouse should pass away – make sure you have the documentation in place to have your wishes carried out. Thirdly, you should have a detailed will drawn up by competent attorneys that have your best interests at heart. At AED Attorneys, we understand that when dealing with the death of a loved one, you don’t want to also struggle with legal matters. We will help you draft a will to ensure that on the legal end, things go as smoothly as possible.

If your spouse has passed and you do find yourself in a difficult situation concerning your joint estate, we will assist you face-to-face and truly listen to what you have to say to resolve the matter legally and with as little hassle to you as possible.

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.

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What is the difference between transfer fees and transfer duty and when is each payable or not?

Written by Design on . Posted in Conveyancing.

Buying a house should be a marvellously wonderful experience. If it’s your first house, then it is likely the first big investment you are making towards your future and your excitement is running high. Beware, however, of the hidden and not so hidden costs that are involved with home purchases – things like spending money on moving, structural issues, levies, insurance, and bond fees. The two that are often confused are transfer fees/costs that always have to be paid and transfer duties that have to be paid sometimes.

Transfer duties

This is an additional cost above and beyond the price of the house that is payable to SARS when a property is transferred from one owner to another. The amount is calculated on either the purchase price of the property or the value of the property depending on which one is higher. The higher value will put you into a percentage band that will determine the final amount payable. From the 1st of March 2020, any property purchased at a value of R1 000 000 or less is exempt from paying transfer duties, hence the rate at which you pay this tax is 0%. For a property with a value of R1 380 000 for example, the transfer duty is R11 250 plus 6% of the value above R1 357 000. Below is a handy table of the transfer duty calculations:

Value of the property (R)Rate
1 – 1 000 0000%
1 000 001 – 1 375 0003% of the value above R1 000 000
1 375 001 – 1 925 000R11 250 + 6% of the value above R1 375 000
1 925 001 – 2 475 000R44 250 + 8% of the value above R1 925 000
2 475 001 – 11 000 000R88 250 + 11% of the value above R2 475 000
11 000 001 and aboveR1 026 000 + 13% of the value exceeding R11 000 000

If the property you purchase is subject to transfer duties, you are required to pay the calculated amount to SARS within 6 months of the sale date. If this is not done within the allotted time, you will be subject to penalties. The conveyancing attorneys will handle the payment, but this payment has nothing to do with their transfer fees.

Transfer fees

Unlike transfer duties, this is an additional cost above and beyond the price of the house, that always has to be paid to the attorneys handling the administrative tasks of the purchase. The total amount payable is also dependent on the value of the property and thus varies from purchase to purchase. The Legal Practice Council (formerly known as the Law Society) does provide a guideline as to the fees payable to the transferring and bond attorneys, but the disbursements (for example postage and petties, document generation fees, rate clearance costs) are at the discretion of the attorneys and may vary.

Bond fees are for the registration of a bond in your name (buyer). If the seller still had an active bond, then there will be a fee to cancel the bond.

It is important when selling or buying a home to involve attorneys that will transfer ownership efficiently and with transparency. AED Attorneys does just that as they ensure that a property is handled with care as quickly as possible. With their in-house conveyancing team and transparent dealings, your property is in the best hands possible.

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.

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Living insolvent person vs. a deceased insolvent estate

Written by Design on . Posted in Deceased Estates Administration.

Living insolvent person vs. a deceased insolvent estate

In its simplest definition insolvency is a state in which one’s debts (fairly estimated) exceeds one’s assets (fairly valued). It indicates that debts cannot be paid and action needs to be taken so one’s creditors can be paid. There are different options available to insolvent individuals, like debt review or sequestration. A deceased estate is declared insolvent when the realized assets of the estate will be insufficient to fully meet all the debts and liabilities to which it is subject. It is the executor’s duty to ensure that appropriate actions is taken should a deceased estate be declared insolvent.

Recourse for a living insolvent individual

If you reach a state of insolvency as an individual, you have to decide on a course of action to ensure that you can pay your creditors. If you can’t and you leave debs unpaid, there are also steps creditors can take, like requesting the Court for a sequestration order against you.

It is preferable for you to get ahead of your situation and rather file for such a request yourself. There are three main legal options available to individuals facing insolvency: debt administration, debt review, and sequestration.

  • Debt administration is applicable if your total debt doesn’t exceed R50,000. It will usually reduce your instalments and extend the repayment terms of you debt. A debt administrator will manage your finances. These individuals are not required to register with a regulatory body and you should always be on top of your affairs when under debt administration.
  • Debt review will usually allow you to repay debts at a reduced interest rate and also extend the terms of your debt. A debt counsellor will help you through the process. Debt counsellors are required to register with the NCR. He or she will renegotiate payments on your behalf, but creditors can reject the plan your counsellor comes up with.
  • During Sequestration a trustee is placed in complete control of your estate and he or she usually has to realise your assets in accordance with the Insolvency Act 24 of 1936 to the benefit of the creditors. It often, but not always, leads to the sale of your house, car, and other assets.    

A deceased insolvent estate

When an individual passes away his/her estate, the assets, income and liabilities, is vested in the Master of the Court and an executor(s) is appointed to manage the estate. The executor has to determine the state of the estate. Usually he/she has the see to the payment of the estate’s creditors. If the executor finds that the estate is indeed insolvent, it has to be administered in terms of Section 34 or the Administration of Estates Act. The Insolvency Act 24 of 1936 can also play a role.

The main duties of the executor are to inform the creditors as to the estate’s insolvent status and realize the assets. The creditors can, however, direct the executor to surrender the estate in accordance with the Insolvency Act. If this does not happen, the executor shall continue to realize the estate.

Creditors with a claim less than R1,000 shan’t be reckoned. Creditors that hold moveable assets as security have the opportunity to place a value upon it which will be reckoned as unsecured. This claim shall be paid out before other creditors. The executor will ultimately proceed to realizing the estate and submitting an account to the Master of the Court. Thereafter he/she shall distribute the proceeds amongst the creditors according to the order of creditors’ preference in a sequestrated estate as lain out in the Insolvency Act. If any person that needs to receive monies cannot be found, the executor pays that into the guardian’s fund for safe keeping.

When dealing with a deceased estate, the surviving family and heirs can be caught off guard if it turns out to be insolvent. AED attorneys will always explain what is happening and why it is happening in the simplest of terms to ensure that you are always in the know

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.

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Inheritance

Minors inheritance vs Minors Maintenance

Written by Design on . Posted in Wills & Trusts.

Minor’s inheritance vs. maintenance without a will or trust

In an ideal world parents will live to an age where they can see their kids grow up, marry and have kids of their own. Unfortunately, this is not always the case. When a parent passes away and leaves behind a child that is still legally a minor (i.e. younger than 18), one would hope that there are plans in place to see to the care for him or her either in the form of a will or a provision that has been made for a trust. The fact is that even if no such plans are in place, there is still a maintenance obligation to the child, surviving spouse or former spouse.

Minor’s inheritance

It is generally true that you can bequeath your assets as you see fit. If you wish for your minor child to inherit from your deceased estate, you have to stipulate it in your will. Legally, a minor cannot enter into a contract without the consent of their parent or guardian. They also cannot inherit as adults would and the minor’s inheritance needs to be protected. This is where the provision for a trust comes into play. A parent can create a trust for their child while they are still alive or stipulate the creation of one in their will. The trust is managed by a trustee and though his/her actions are regulated by law, it is still very important to carefully choose the right trustee that will look after your child’s best interests. The trust can own property, inherit money, or receive donations. The specifications of the trust will determine what happens to its assets when the child reaches legal adulthood.  The child’s maintenance can also be paid from the trust. When there is no will or provision for a trust, however, it gets a bit trickier.

If the minor does inherit from the deceased estate, but yet no provision has been made for a trust, the inheritance will be paid over to the Guardian’s Fund. This governmental fund falls under the administration of the Master of the High Courts. The child’s guardian may claim maintenance from this fund. This is not ideal as the claiming of funds is an administration-heavy process and Fund administrator misconduct has taken place in the past.

Minor’s maintenance

Regardless of whether the minor stand to inherit or not according to the deceased will, maintenance must still be paid, i.e. the minor must still be cared for until he/she reaches the age of 18.  If no arrangements for this has been made it could lead to serious disputes over the distribution of the deceased’s estate as the need for maintenance trumps any specifications of inheritance. Maintenance includes the child’s requirements for food, accommodation, clothing, medical needs, education, transport, and entertainment. A child’s maintenance claim ranks behind a creditor’s claim on the estate, but it ranks equally with the maintenance claim of the surviving spouse. If there are not sufficient funds to settle the claims of both the surviving spouse and the dependent child in full, a pro-rata calculation is done.

It is very important to remember that an individual’s maintenance obligations do not pass away with them. It is best to make provision for this in the form of a trust. The absence of one could make the will moot as maintenance takes precedence over inheritance.

What should you do?

Always ensure that you have an up to date will that has been drafted with the assistance of an attorney. Your will should not just stipulate who you wish to inherit your estate, it should also include details as to the maintenance that might need to be paid from the deceased estate. 

Contact AED Attorneys to help draft your will. Our passionate and reliable staff will remind you of all the salient points that you need to include to ensure that your wishes are respected after you are gone.    

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.

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