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Living insolvent person vs. a deceased insolvent estate

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.


Provident Fund Legislation – Changes from 01 March 2021

A well-structured retirement plan requires a thorough understanding of the available retirement options and their associated tax implications, as the South African retirement fund industry is complex and heavily regulated.

In addition, new legislative changes to South Africa’s provident funds were implemented on 01 March 2021 to create a consistent retirement fund system over all the funding options. These legislative changes hope to achieve this by smoothing out any inconsistencies and irregularities and making it easier for members to understand the intricacies of their funds.

South Africans are known to have a poor savings culture, and the government recognises this. Hence, this is one of the main reasons that has led the government to make changes to current legislation by providing tax incentives to ensure that provident fund members preserve their capital, rather than withdraw it all on retirement. Alexander Forbes Member Watch analysis shows that approximately 50% of their members retire with less than one-fifth of their final salary to live on in retirement.

In the explanatory memorandum that accompanied the Taxation Laws Amendment Bill of 2013, National Treasury (NT) stated that “A strong link exists between insufficient retirement income for retired members of provident funds and the lump sum pay outs made by provident funds at retirement. “In short, the absence of mandatory annuitisation in provident funds means that many retirees spend their retirement assets too quickly and face the risk of outliving their retirement savings. In view of these concerns, it is the government’s policy to encourage a secure post-retirement income in the form of mandatory annuitisation.”

Up until 28 February 2021, provident fund members were allowed to withdraw 100% of their benefits, subject to taxation on the non-exempt portion. This was in contrast to members of a pension fund who were only permitted to withdraw one-third of their benefits in cash. The remaining amount was to be used to purchase an annuity (pension) income.

With the new legislation in place, provident funds will now be subject to the same rules as pension funds at the time of retirement – except for members 55 years or older, who will remain unaffected for as long as they stay on the same provident fund. For members younger than 55 and new provident fund members, the new legislation will apply to any contributions made from 01 March 2021 onwards.

The purchasing of a pension will only be required if an employee retires from their current fund. Should they resign, be dismissed or retrenched, they are under no obligation to buy into a pension fund and retain the option to withdraw their funds in cash – subject to obligatory tax. For these reasons, financial advisors need to be fully cognisant of the legislative changes to advise their clients on various retirement option changes.

What Are The Obligations Of The Provident Fund Trustees?

The Trustees are required to exercise independent discretion in respect of the fund members and beneficiaries and ensure that all reasonable steps are taken to protect the fund members’ interests at all times. In addition, they are obliged to conduct an investigation to determine how many dependants the deceased has. Only once this investigation has been completed may the Trustee/s pay out the provident benefit. The obligation on the Trustee/s to investigate and trace all dependants is vital. If the Trustee/s fail to carry out this duty, they can be deemed to have acted negligently.

How Soon Are Trustees Required To Make Payments To The Beneficiaries?

Section 37C of the Pension Funds Act provides that the fund benefits must be paid out within 12 months of the death of the fund member. However, interim payments may be made to minor dependents or nominees, with certain provisions for interest. If the fund is unable to trace any dependants, it will pay the benefit out to the nominated beneficiaries, as per the member’s request in writing, or, if no dependant or beneficiary has been nominated or can be traced, then the fund will be placed into the deceased member’s estate.

What Are The Requirements With Regards To Ensuring The Legitimacy Of The Beneficiaries?

Even though a fund member may have nominated a beneficiary or beneficiaries, it is the responsibility of the Trustee/s to allocate and apportion these funds appropriately. This entails the Trustee/s to unequivocally determine who the legal dependants are and who should receive the benefits, so that no dependant is left without financial support. In the event of the death of a fund member before retirement from the fund, the benefit allocation will be made by the Trustee/s according to strict conditions laid out in the Pension Funds Act 24 of 1956. They will apportion and pay out the benefit fairly, based on the information provided to them. According to the Pension Funds Act, a legal beneficiary is described as:

  • Any person for whom the deceased is legally responsible for maintenance.
  • Any person for whom the deceased is not legally responsible for maintenance but was, in the trustees’ opinion, dependent on the deceased for maintenance at the time of their death.
  • The deceased’s spouse, including a party to a customary or civil union.
  • The deceased’s children, including a child born after your death, an adopted child and an illegitimate child.
  • Any person for whom the deceased would have been legally responsible for maintenance.

Another important change to legislation in terms of retirement benefits after 1 March 2021 and emigration, is that the criteria to determine whether or not a person can access their pension and provident fund money, will not be based on emigration but on ceasing to be a tax resident in South Africa. According to James Coutinho, a Senior Tax Advisor at Liberty Group, this would require demonstrating non-tax residency for an uninterrupted period of three years.

AED Attorneys occupies a very personalised space in the legal sphere, dealing specifically with three processes that often get lost in larger legal firms’ confusing production line, namely, Wills and Trusts, Administration of Estates, and Property Transfers.

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.


How A Pandemic Changed Funerals in South Africa

As our President noted recently, funerals have become a death trap for many South Africans. Although it is deeply ingrained in all of us to provide a fitting send-off for our departed loved one, we are in the grip of a deadly pandemic. The typical funeral activities that usually occur are increasing everyone’s exposure to risk.

Accordingly, the COVID pandemic has changed funeral rituals, not only in South Africa but all over the world. The South African government was forced to introduce new measures to reduce the disease’s risk by curtailing traditionally large funerals.

Level 3 Funeral Arrangements

Some of the measures include limiting funeral attendance to a maximum of 50 people – all of whom must socially distance and wear masks. Night vigils and after tears/wakes are no longer allowed. The deceased must be buried or cremated quicker than before, and mortal remains are treated more clinically.

How Traditional African Funeral Rituals Are Affected

This change to long-standing traditions is particularly difficult for the African culture who embrace social support and community kinship. Most black South African funerals combine traditional African and Christian rituals, with many people in attendance. These people may or may not be known to the bereaved. They could be anyone from friends, family members, colleagues, or strangers who merely want to show their support and respect. All are welcome and often travel great distances to attend both the funeral and the rituals leading up to the funeral. The reason for these social calls includes repeated family visits, helping with funeral and catering preparations, counselling, etc. and are all performed in close quarters. In rural villages, graves sometimes need to be dug, with people often sharing the same picks and shovels.

Curtailing the Celebration Of The Deceased’s Life

Whatever the culture, whether the mourners gather to attend the church service or eat communally afterwards, these events are, without a doubt, ripe for transmission of COVID. Funeral services have adapted from virtually all-day events to a one to two-hour service attended by no more than 50 people. People can no longer embrace each other due to social distancing. The full splendour of funerals has been overshadowed by rules and regulations to ensure all mourners’ health and safety.

Missing Out on Important Closure

Every culture has its rituals and services when it comes to mourning. These rituals bring comfort, and notably, closure. One of the main challenges experienced by people who are grieving the death of one who has departed is the inability to mourn in the usual way and experience the traditional rituals that slowly help bring acceptance of death. This new normal may bring a need for professional counselling to help people gain closure in another way. Not being able to provide a proper sendoff for your loved ones, may result in Deferred or Complicated Grief in time to come. Emotions such as guilt and self-blame may also come to the surface for not being in a position to pay a proper last tribute due to the restrictions. We can refer you to qualified Grief & Bereavement Specialists on our panel.

Financial Impact of The Pandemic On Funerals

From a more positive perspective, the COVID pandemic has possibly reduced a family’s financial burdens by making funerals much cheaper. Elaborate and large funerals, which come with a high cost that is borne by the deceased’s family, are now no longer allowed. Families often expose themselves to enormous debt to pay for a funeral – especially if they don’t have a funeral policy or funeral cover. Traditional leaders often have to intervene in disputes between families and service providers when they are unable to meet their financial commitment to the service provider. COVID lockdown may well have positively intervened in a time where incomes are stretched to the limit, and financial respite is welcome in any form.

However, while costs are to be saved on catering, tents and smaller funerals, other expenses are cropping up. Some funeral parlours have had to increase their prices by up to 25% to cover COVID-related expenses such as; protection equipment, sanitising products, additional staff costs due to more workers being hired as deaths increase, and even additional cemetery charges by municipalities. Funeral parlours have also had to modify their vehicles to increase safety precautions during COVID which increases their overheads.

Will Funerals Return to Normal Post-Pandemic?

Nobody is sure if the “new normal” type of funeral created under COVID restrictions will last forever. Perhaps the financial relief from curtailed cultural expectations of an elaborate funeral will result in some permanent changes to how funerals are conducted once COVID is over? Or perhaps everything will revert to normal?

Secure Your Family’s Future After Your Passing

Whatever the outcome, having a funeral policy will always provide a safeguard against funeral expenses and provide loved ones with a measure of relief and the ability to mourn in peace without the financial burden of a funeral hanging over their shoulders. Life insurance will provide additional comfort in taking care of those financially dependent on the deceased and is often combined with funeral cover. When a loved one passes away, there are many financial matters that will need to be addressed pertaining to tax, legal and financial administration.

Funeral Policies in South Africa

Sonja Smith Funeral Group, which has branches across Gauteng, assists bereaved families with funeral arrangements, bringing the deceased into care, burials, cremations, financial matters after the funeral and offers unique funeral services and memorials. They also provide comprehensive funeral insurance plans that include;

Benefits of Elite Funeral Insurance Plan*:

  • Instantly paid claims
  • No medical examinations
  • Free repatriation of remains
  • Discount on coffin and services for policy holders
  • 6-month waiting period for death claims as a result of Natural Causes
  • Maximum entry age 85 years

Additional Benefits of Elite Funeral Insurance Plan*:

  • Income protection
  • Refreshments benefits
  • Tombstones
  • Bereavement- & Trauma Counselling
  • Accidental death insurance

The Sonja Smith Funeral Group ensures that families receive the style and quality of service that their loved ones deserve. Our personalised service will guide you through all the planning and arrangements for a funeral. For further information or to obtain advice, contact Sonja Smith Funeral Group for empathy, efficiency and most of all, compassion.

Our offices are located across Gauteng in Benoni, Centurion,  Fourways, Mayville, Meyerspark, Midstream, Montana, Moot, Moreleta Park and Roodepoort.

*Terms and Conditions apply to the Elite Funeral Insurance Plan. These are available on request.

Should Your Pets Be Included in Your Will?

Animal shelters across South Africa are seeing an increase in the number of pets they are accepting, which can be attributed to their owners passing from COVID-19 or simply not being in a position to afford them anymore due to job losses and salary cuts.

In South Africa, a certain amount of protection is granted to animals under the Animal Protection Act of 1962. However, nothing is specified in the Act regarding what happens to your pets when you die, and many people don’t even consider this.

What Will Happen to Your Pet After You Die?

Before your pets are dropped off at an animal shelter after your death, perhaps it is time to rethink your Will?

Just as children can be included in your Will, so can your pets. There is no law prohibiting this, nor is there any law that prohibits pets from being beneficiaries of your Will. In the event of your death, you will need to consider what will happen to your pets, if they outlive you. Who will take care of them?

Estate Planning for Pets

Estate planning ensures that your loved ones, and in this case, your pets, are taken care of after your passing. To ensure that your pets are well looked after in the event of your early demise, the following points should be considered when you are planning your Estate:

Choosing a New Owner

When choosing someone to inherit your pets, they need to be willing and have the ability and space to look after them properly. The new owner may have to comply with relevant homeowner legislation depending on whether they live in a complex or a stand-alone home. If they are renting their property, their Landlord may not allow Tenants to keep pets. This clause may need to be regularly updated in your Will.

The person whom you choose should be responsible, trustworthy and love animals. Also, make sure that the needs of your pet/s will be met with whomever you choose. You may want to set up an informal written agreement with the person in the hope that your instructions will be carried out after your death.

Establish a Trust for Your Pet

Assigning a caregiver for your pet after your death is essential but, if possible, it is recommended that you create a pet trust to help the caregiver look after your pets. As per a standard Will, a Trustee will need to be appointed to administer these funds to the caregiver to look after the beneficiary, your pet/s.

How to Fund a Pet Trust

This Trust is no different from any other Trust Fund set up after a person’s death. Although you will not be able to cede your assets directly to your pet, you will be able to surrender some or all of your assets to the Trust Fund. The Trustees will then ensure that sufficient money is paid to the caregiver to take care of your pet’s food, grooming, medical care and any other specific needs that it may have during the rest of its life.

What Happens to the Pet Trust Fund if the Pet Dies?

You can nominate a beneficiary in a case like this to either continue receiving money from the Trust Fund or to have the Trust dissolved and a lump sum paid out. The beneficiary doesn’t necessarily have to be an individual either. It can be an animal shelter, such as the SPCA, or another charity of your choosing.

Instructions to the Caregiver After Your Death

A letter of instruction regarding general advice about the upkeep of your pet/s does not have to meet any legal requirement and can work nicely together with your Will. However, bear in mind that it is not a legally binding document and cannot be used to allocate funds to your pet/s. This instruction must be included in your Will.

Do You Need an Attorney To Assist Setting Up A Pet Trust Fund?

Considering all the above, you may be asking yourself if you need an Attorney to assist you in setting up a Trust and a caregiver for your pet/s in your Will. While not absolutely necessary, Attorneys can provide essential legal points of view and insight that are helpful if your Will is not straightforward, as in wanting to include your pet/s or in setting up a Trust Fund.

Who Can Help Me to Set Up a Trust Fund for My Pet?

AED Attorneys will help you to find the best options for your pet/s and give you peace of mind in the process. They can offer you expert advice when writing your Will, including many things that you may not even have thought about. AED takes every person’s situation into account to create a Will tailored to your circumstances.

Leave Behind a Legacy

Even the best intentions and plans can go wrong, especially when it comes to financial gain, you’re your pet/s caregiver. Therefore, you need to be very careful about whom you choose as a caregiver and leave self-explanatory instructions in your Will about how your pet/s will be cared for after your death.

Before your pet gets dropped off at an animal shelter or the SPCA after your untimely death, contact AED Attorneys for further options and assistance with estate planning. This planning will include the appointment of an experienced Executor and Trustees to ensure that your pet/s are well looked after in the event of your passing.

It is always advisable to have a minimum of three Trustees. When nominating a Trustee, you need always to make sure that the third trustee is independent and can administer a Trust. This ensures that there is no deadlock in the decision-making process.

AED Attorneys offer family-centred, open, and friendly legal services. From the moment you walk through their door, you will be treated with respect and patience. Each matter is handled individually and with the same care and dedication. They are passionate, hardworking, and professional.

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.

what to do when someone dies

What to Do When Someone Dies

There have been thousands of searches on Google over the past 12 months relating to people asking what needs to be done when a loved one passes. People react with shock when someone close to them dies, and if you are responsible for making the funeral and administration arrangements, you may also be thrown into a bit of a panic.

Handling a death and managing funeral arrangements is a challenging situation, especially in the midst of your grief. AED Attorneys has put together some pointers to help you handle the process from the minute of passing until after the funeral.

At the Time of Death

  • If a person passes away under suspicious circumstances, the police will need to be contacted immediately, and they will organise the body to be removed.
  • If a person dies in a motor vehicle accident, the body will be removed to the mortuary, and you will be contacted after that.
  • If a person passes away at home and there is nothing suspicious about the death, you will need to call the paramedics such as ER24 or Netcare 911. They will be able to confirm whether or not the causes are natural. They will also assist in taking the body to the mortuary.
  • If the person passes away in hospital from natural causes or after an illness, the doctor will issue a death notice, and the body will be taken to the hospital mortuary. If the hospital has no mortuary, you will need to contact a Funeral Home to arrange for the deceased to be collected.
  • It is a legal requirement that a death notice is signed by a doctor or medical professional certifying the cause of death.

Identification of the Body

Identifying the body must be done by either an immediate family member or a close friend. In some mortuaries, the body can be identified via pictures on a computer rather than an in-person viewing of the body which prevents further emotional trauma. It is always a good idea to bring somebody along with you to the identification for emotional support. Once the identification has been made, a body number will be issued. This number needs to be provided to the funeral home, as well as the funeral policy number and details – if one exists.

Next Steps

Once the body number has been given to the funeral home, they will proceed with the funeral arrangements and will also advise you on what to do. You will now be able to disclose the news to friends, family, and colleagues, as soon as you feel able to.

Unfortunately, under COVID lockdown conditions only 50 people are allowed to attend a funeral, so you may need to discuss alternate options with the Funeral Home, such as broadcasting the funeral online to family and friends, if you choose to do so.

The Funeral Home will request a suitable outfit for the deceased to wear in the coffin or before the cremation.

It will now be time to decide on the following;

  • Will it be a cremation or a burial?
  • What type of coffin will be required?
  • What type of headstone will be required if it is a burial?
  • Will you require a cremation niche or plaque, if it is a cremation?
  • Who will deliver the eulogies?
  • Who will the pallbearers be?

Estate Administration Death Certificate

Either the doctor or police will issue the Notification of Death (DHA 1663). You will need to send this form, together with others and ID copies of the deceased, to the Department of Home Affairs. They will then register the death and issue a DHA5 Death Certificate. Try to obtain several certified copies of this certificate, as you will require them for many of the administrative processes to follow. Most Funeral Homes will be able to assist you with this process.

Processing the Deceased’s Estate

By law, the Master of the High Court must receive notification of the deceased’s Estate. You will need to locate the Will of the deceased to establish who the Executor of the Will is and make contact with them. 

If no Executor has been appointed, then contact a law firm such as AED Attorneys, who will report the Estate to the Master, and appoint an Executor.

If you cannot find the Will, or the person died Intestate (with no Will), you will also need to call an Attorney – preferably one which the deceased used. The Estate is then required to be administered under the Intestate Succession Act, and the Master will appoint an Executor.

Once the death certificate has been issued, the administrative processes can start, such as contacting the deceased’s nominated executor or if you need help with the reporting of the estate and the administration a law firm such as AED Attorneys.

This is a list of some of the documents that may be required for an Estate to be reported:

  • Original last Will and testament.
  • Original death certificate and DHA-1663-A Notification of Death Form.
  • Identity documents of deceased and spouse, if applicable.
  • Name, address of employer and salary number of deceased.
  • Details of the pension fund.
  • Name, address, and reference number of medical aid society.
  • Income tax details (if registered).
  • Name and telephone number of the accountant.
  • Name, address, and telephone number of deceased’s usual doctor.
  • Name, telephone number, and case number from police station should the deceased have died due to unnatural causes (e.g., motor vehicle accident, shooting, suicide etc.).
  • Partnership agreement and name and address of all partners.
  • Particulars of company or close corporation or business.
  • Name and contact number of auditor/accounting officer.
  • Details of divorced or predeceased spouse.
  • Antenuptial contracts and/or divorce agreements.
  • Original title deed in respect of each property and/or bank details where a bond is held.
  • Rates and taxes account(s) and/or details of the body corporate or managing agents.
  • Registration certificates in respect of motor vehicles.
  • Firearms – Copies of licences to be provided.
  • Certificates/details in respect of timeshare.
  • Original share certificates or electronic share account details.
  • Hire and letting contracts.
  • Cheque books, investment statements, credit cards, ATM cards.
  • Details of accounts owing by deceased.
  • Copies of identity documents of beneficiaries and marriage details and certificate.
  • Copies of birth certificates of minor beneficiaries.

If your loved one planned adequately to ensure that everything was in order and an Executor was appointed, then the Estate’s administration may still be completed relatively quickly. AED Attorneys assists with the drafting of Wills, setting up Estates and the processing of Deceased Estates in an efficient, yet sympathetic manner.

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.

marriage will

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. 

Clearing Out A Parent’s Home After Their Death

Clearing Out A Parent’s Home After Their Death – 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.


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

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.

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