insolvency

What are the effects of putting an insolvency clause in your will?

Insolvency has become a sobering reality for a lot of people. The most recent statistics from Statistics South Africa showed that insolvencies increased by 123% in the three months ended August 2021 compared to the same time in 2020. Facing insolvency isn’t always because you made poor financial decisions. The global pandemic taught us many things, including the fact that we can make the best decisions and circumstances can change our reality in ways we never thought of.

When you set up your will, you might want to protect your deceased estate from the possibility of a named beneficiary being insolvent at the time that his/her inheritance becomes due and then being used to pay creditors.  Under South African law, however, there are limited ways in which you can do this, and testators need to be very careful with the specifics in their wills.

Quick recap on insolvency

In his personal capacity, an individual is insolvent when they cannot pay their debts as they become due. You could reach an agreement with your creditors to pay your debt without the intervention of third parties, or you could be sequestrated. In the case of sequestration, the insolvent’s estate is placed under sequestration and a trustee takes control of it. Assets will be sold off or arrangements made to pay the creditors at least a portion of what is owed them.

A testator could wish to keep his own deceased estate from becoming part of the insolvent estate of a beneficiary and be sold off to pay debts. In this case, an insolvency clause needs to be added to the will.

The insolvency clause

In South African case law, there are various examples of Insolvency clauses being dismissed or the Will being interpreted as if the clause did not exist. For example, in Badenhorst v Bekker N.O. & Others 1994 (2) SA 155 (N) the insolvency clause in the Will read “No rights and hopes of the beneficiaries under this Will or part thereof shall be attachable by any creditor or vest in the beneficiary’s trustee on insolvency”. The clause had no effect on the law and the inherited estate formed part of the beneficiary’s insolvent estate.

The issue arises from the fact that the inheritance, once received, will immediately form part of the beneficiary’s estate, regardless of his/her financial situation. The testator cannot place restrictions on how that inheritance is to be used, or not used as the case may be.

So, what CAN you do?

If a testator does want to add an insolvency clause that has an effect and protects the deceased estate, it is possible. These solutions, though, usually equate to the intended beneficiary no longer receiving his/her inheritance as originally intended.

Solution 1:

The Will can state that, should the intended beneficiary be insolvent when he/she is to receive the inheritance, they will forfeit it and the deceased estate’s executor will award the benefit to the beneficiary’s heirs. In the absence of heirs, the insolvent beneficiary’s inheritance can be forfeited to the other named beneficiaries in the Will.

Solution 2:

The testator can instruct that a discretionary trust be created should the beneficiary be insolvent. In this case, the inheritance will be owned by the trust and not the insolvent beneficiary. It is, therefore, not part of the beneficiary’s estate and cannot be subject to a creditor’s claim.

Section 3:

A real right can be created that would favour the beneficiary but not have him/her inherit directly. A real right could be a fideicommissum where a property is given to an heir on the condition that this heir will pass it on to a specific person at a later date. A real right could also be a usufruct over the bequeathed property in which case the right to use and derive income from a property is temporarily granted to an individual.

At AED, we know how important it is to ensure your wishes are respected once you are gone. We can help you ensure that this happens by carefully drafting a Will that will be respected under South African law.

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.

Adoption and Inheritance

Adoption and Inheritance in terms of the Intestate Succession Act

Children are usually seen as the descendants of their parents. They are often also some of the first people to be named as the beneficiaries of a parent’s will, though they do not legally have a right to inherit. Minor children, however, are their parents’ responsibility, even in death, and even if a child is not named a beneficiary, he or she can, with the aid of their guardian, claim maintenance against a deceased parent’s estate. Such a claim receives a higher priority than those of named beneficiaries.  So, while South African law respects an individual’s freedom of testation some laws can restrain a testator’s exercise of this freedom.

But… what if an individual died without leaving a valid will or any other document containing testamentary provisions? And what if that individual has an adopted child?

Passing away without testamentary provisions

If a person passes away without a will it is said they die intestate, and his or her deceased estate is wound up according to the Intestate Succession Act 81 of 1987. This 5-page Act sets out exactly how a deceased estate is to be wound up in the absence of a will. If a will is present but a portion of the estate is not accounted for in the will, that portion is also wound up according to the Act.

The Act states that if a person “dies intestate, either wholly or in part, and

  • Is survived by a spouse, but not by a descendant, such a spouse shall inherit the intestate estate;
  • Is survived by a descendant, but not by a spouse, such descendant shall inherit the intestate estate.”

It further continues to detail the various possible individuals that could inherit the estate depending on who survives the deceased, from just one’s parents to descendants of one’s deceased mother, for example, who are only related to the deceased through her.

Adoption and the Intestate Succession Act

Once again, the Intestate Succession Act is very clear on what is to be done about and intestate deceased estate when the child is to inherit has been adopted:

“An adopted child shall be deemed

  • to be a descendant of his adoptive parent or parents;
  • not to be a descendant of his natural parents or parents, except in the case of a natural parent who is also the adoptive parent of that child or was, at the time of the adoption, married to the adoptive parent of the child.”

An adopted child thus has the right to inherit as any biological child would from their adoptive parents. They do not have the same right to inherit from their biological parents as they are legally no longer seen as their biological parents’ descendants.

Final thoughts

While the Intestate Succession Act stipulates how to wind up an intestate deceased estate, this situation only highlights why it is important to have a recent and valid will. It is the last expression of one’s wishes and as long as all the details of your will is legally enforceable, it can ensure that your last wishes are adhered to.

While an adopted child is no longer the descendant of his/her biological parents and cannot inherit according the Intestate Succession, they might still want him/her to inherit. If this is the case, they can state so in their will.

It is always a good idea to have your will drawn up by professionals, like AED Attorneys, that can advise you on the inclusion of important clauses and ensure that the will is accepted by the Master of the court so you don’t pass away intestate.

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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Power Of Attorney

What does a power of attorney cover and when does it cease to exist?

If you are temporarily unable to manage some or all of your affairs, you might want to grant a trusted family member, attorney or financial advisor the authority to do so on your behalf. In other words, you wish to grant someone power of attorney (POA). A POA allows the person you nominated (the agent) to perform juristic acts for you (the principal). There are various situations in which you might want to enact a POA, but they are limited and do expire.

Requirements to create a POA

A POA is not quite a contract. It is the legal expression of the principals will that the agent has the capacity to enter into legal agreements and make legally binding decisions for the principal. If the POA is completely valid, third parties are contracted with the principal, and the agent is protected from any liability.

A major requirement for a valid POA is the contractual capacity of the principal. In other words, under South African law, the principal has the capacity to enter the agreements he is authorising an agent to enter into. If the principal the nature and consequences of granting power of attorney, he cannot validly execute such a POA. If you, for example, do not have the capacity to understand the nature and consequences of an offer to purchase a house, you cannot grant another individual power of attorney to sign such a document on your behalf.

There are no formalities for a POA, and it can be given orally or in writing. Best practice, however, is to have a POA in writing and signed by two witnesses. The POA should also state exactly what the agent is and is not authorised to do. If the principal is a company and, more specifically, the director of a company, that individual must be authorised by the board of directors to execute a POA on the company’s behalf.   

What does a power of attorney cover?

A valid POA can cover the acceptance, amendment, and signing of any legally binding document or making important decisions. These can include decisions with regard to your finances, property, tax, entering into contracts, settling claims, renewing licenses, etc. You might want to execute a POA for various reasons including:

  • Emigration and wanting someone in South Africa to finalise your affairs here. A POA can make it easier.
  • You are leaving the country for an extended period of time.
  • You want someone with legal or financial expertise to assist and handle decisions for you.
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Valid Will

The importance of a valid will which is drafted correctly

There are some documents and contracts in your life that will simply be much more important than others. Your will is such a document. It is a document that becomes very important once you’ve passed away and also gives you the best chance to ensure your wishes regarding your estate are respected once you are no longer here. The importance of a will should never be underestimated, nor the requirements that need to be met to ensure that the will is valid and drafted correctly.

What a valid will can and can’t do once you have passed away

In its most basic form, a will indicates how you wish your estate to be administered once you have passed away – who inherits what. If you have a valid will, it cannot be ignored. However, there are laws in South Africa that also have to be followed and a will can only be administered in conjunction with these laws. These are The Administration of Estates Act 1965, The Wills Act South Africa 1953, and The Intestate Succession Act 1987 (only applicable if you do not leave a will behind or your will is invalid).

What it can do:

In your will, you can nominate the individual that you wish to administer your estate. This individual, the executor, will be responsible for ensuring that the will is honoured, and the estate distributed legally and according to the will to the extent that it is legal and possible. If you nominate an individual in your will, it is best to also discuss this with them as they have the right to not accept executorship.

Your will can further clear up any doubts about who is to inherit which assets and/or monies. The flip side of this is that you can, of course, do your best to ensure that your assets do not end up with people you don’t want to have them. If you have a prized collection of rare books, for example, you can stipulate that these should be inherited by your bibliophile grandchild and not another relative that you fear will only sell them. In South Africa, no individual has the right to inherit from a deceased estate and if, for example, you name one family member as a beneficiary and not another, there is very little they can do about it. There are exceptions to this, however, that we will get to when we discuss what your will cannot do.

If you still have minor children, your will can also serve as the final indication of who you name as their guardian. If this is not stipulated, the court will decide. When a valid will is in place, it will be easier and faster for your heirs to access their inheritance. In your will, you can also give gifts and charitable donations that will help to offset the estate tax that will have to be paid.

What your will cannot do

Your will cannot enforce conditional gifts that are illegal, immoral or against public policy or unreasonable to enforce, solve your estate’s insolvency, or exempt you from certain financial responsibilities.

If you name a beneficiary and you want a condition to be placed on that inheritance, it has to be reasonable. Let’s say you sponsor your grandchild’s tertiary education but only if they leave their current partner whom you disapprove of – this is not an enforceable condition. An enforceable condition could be that he/she maintains a certain average throughout their studies.

If your estate is insolvent, your death will not change this situation. Your will might be written without considering the estate’s insolvency, but the insolvent estate’s debts with its creditors have to be settled first. Only once this is done can whatever is left of the estate be distributed among the beneficiaries.

In addition to debt responsibilities that need to be seen to, other financial responsibilities also take precedence. A minor child, for example, can claim maintenance from a deceased estate as a parent’s support of their children is only terminated by the child’s death, not the parents’. If an individual did not make provision for their child’s maintenance in their will, the child’s claim against the estate will legally rank higher than any named beneficiary. Similarly, a spouse can also claim maintenance if he/she is unable to meet their maintenance needs by themselves, but only if the marriage was dissolved by the death of the spouse.

What makes a will valid?

The contents of a will mean next to nothing if the will itself is not valid and a will is only valid if:

  • The testator is 16 or older and mentally capable of appreciating the nature and effect of his/her act.
  • The will must be in writing – typed or handwritten. The person that wrote the will cannot be a named beneficiary.
  • Every page of the will is signed by the testator and competent witnesses.
  • The testator and witnesses must sign in each other’s presence.
  • A witness cannot be a named beneficiary or nominated executor
  • If the testator cannot sign due to a disability, they can nominate someone to sign on his/her behalf or make a mark (a cross or thumbprint). This manner of signing needs to be certified by a magistrate, justice of the peace, commissioner of oaths, or notary public that will also sign each page of the will.

If these requirements are not met, a will can successfully be contested because there was a failure to comply with the formalities or the testator did not have a testamentary (mental) capacity. A will can also be contested on the ground of forgery or undue influence.

When you want to draft a will or review your current will, it is best to have it done by professionals that have extensive knowledge of all the laws and requirements that have been touched on here. At AED Attorneys, we can assist you with drafting a will that will make it as easy as possible for your executor to administer it and your loved ones to inherit.

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.

Inheritance

Minors inheritance vs Minors Maintenance

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.

admin vs curator

What is the Difference Between a Curator and an Administrator?

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

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

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

What is a Curator Bonis?

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

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

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

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

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

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

What is an Administrator?

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

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

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

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

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

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

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

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

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

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

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

attorneys

Assisted Decision-Making – Dementia, Incapacity and Power of Attorney

Life is about making decisions. We make decisions all the time regarding where we live, work, how we take care of ourselves, where our children go to school, etc. Making our own decisions and exercising our choice is one way to express our individuality and exert control over our lives. Naturally, contractual affairs also form part of our daily decision-making process.

Our capacity to enter into legal contracts is closely tied to our mental state. For a transaction to be regarded as valid, the law requires that the relevant person can understand the nature and consequences of that transaction. We take it for granted that adults can make decisions about their welfare or financial matters. Unfortunately, some people are not in a sufficient mental state to make legal decisions, whether due to old age, dementia, disease, a stroke or similar.

However, in establishing and protecting their appropriate autonomy, the individual must be protected against abuse and exploitation. In South Africa, the law deals with this by using Curatorship, which has been criticised by some quarters for the many frustrations it causes.

An individual can appoint another person to act on his or her behalf through a Power of Attorney. However, should the person who granted the Power of Attorney become incapacitated, this power terminates – which is highly illogical. Obviously, this is a significant issue for caregivers, as it is common for ageing parents to appoint someone reliable as their Power of Attorney. In light of this the SA Law Reform Commission is currently investigating assisted decision-making, but this still has a way to go before anything concrete transpires.

Under the above-mentioned circumstances where the Power of Attorney falls away in the case of incapacity, it is essential to note that, if the agent acting on behalf of an individual does not cease to act on their behalf, then they are in fact acting without authority and risk personal liability.

In terms of Rule 57 of the High Court’s Uniformed Rules, in situations where an individual loses the ability to manage their affairs, the High Court can appoint a Curator Bonis to handle that individual’s financial matters. The Curator Bonis administers the estate of the individual according to the Court’s powers and functions, and they are ultimately accountable to the Master of the High Court. A Curator Bonis is allowed remuneration for their services. Accordingly, they are entitled to a maximum annual fee of 6% on the gross income generated from the assets and a once-off payment of 2% of the capital on the date the curatorship ends.

The appointment of a Curator Bonis is relatively expensive as it involves a High Court application with costs in the region of R60 000 to R80 000. The process itself is also rather arduous as well as taxing on the Curator. The Curator is required to submit annual accounts detailing all income received, expenditure incurred and provide all vouchers and receipts for transactions made for or on behalf of the incapacitated person. Unfortunately, as previously mentioned, many frustrations surround this appointment in terms of it being both costly and the innumerable delays caused by red tape.

A cheaper alternative involves the appointment of an Administrator by the Master of the High Court in terms of The Mental Health Care Act, 17 of 2002. This Administrator may only deal with the individual’s property and not their personal affairs. Also, it is only feasible in the case of mental illness or intellectual disability – and only for smaller estates with assets valued up to R200,000, with an annual income of up to R24,000. The diagnosis of a mental illness or significant intellectual disability will have to be confirmed by medical certificates or reports from a certified mental health care practitioner.

Since no High Court application is required for an Administrator’s appointment, the procedure is far less costly than a Curator Bonis appointment. This is because the applicant does not need to work through an Attorney, and the application fees charged by the Master in processing the application amount to no more than R2500. Administrators, like Curators, are governed by the Administration of Estates Act and are also entitled to their fee of 6% on income from assets and of 2% of the value of the capital when the administration is terminated.

In summary, the powers granted to a Curator Bonis or Administrator are primarily to administer the estate of the person who is incapable of managing their affairs and generally include the following:

  • To receive, take care of, control and administer all the assets.
  • To carry on/or discontinue, subject to any law which may be applicable any trade, business or undertaking.
  • To acquire, whether by purchase or otherwise, any property, movable or immovable, for the benefit of the estate.
  • To apply any money for the maintenance, support or towards the benefit of the person; to invest or re-invest any funds etc.

Once the individual dies, the curatorship or administration terminates, and the management of the personal and financial affairs are then handed over to the Executor of the deceased’s estate.

An alternative to the above is to consider setting up a trust to manage the individual’s financial aspects – obviously this needs to be performed while that individual still has legal capacity. However, trusts involve certain costs and taxes, as well as other implications. A recommendation was made to the SA Law Reform Commission in 2004 to consider an enduring or conditional Power of Attorney. However, nothing further has resulted.

In general, majors are presumed mentally and legally competent to manage their affairs until proven otherwise. When a person becomes incapable of managing their affairs, especially the administration of his or her estate, it is imperative that someone is legally appointed to assist that person who has become incapable, as a general or special power of attorney will not be valid. In terms of South Africa’s current legal system, no person may manage another person’s affairs without the required authority to do so.

AED Attorneys has the knowledge and experience to navigate these difficult situations. After making an appointment with them, they skilfully guide their clients through the various options available and explore the most suitable one for each individual’s unique requirements.

AED Attorneys understand that every situation is unique. 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.

signing a will

Is Your Will Up To Date?

When last did you update your Will? Do you even have a properly drafted Will? As we head into the festive season and another new year, this may well be an ideal opportunity to reflect on setting your personal affairs in order, including your Will.

The mortality rate is known to increase every year around the Festive Season and New Year, the majority of which can mainly be attributed to road accidents. COVID-19 also continues to have an impact on the death rate, which is rising yet again.

What Happens If You Die Without A Will?

If you don’t have a valid Will when you die, then your assets will be divided up between your spouse, any children you may have left behind, any siblings or your parents – depending on who is left behind and their relationship to you. Should you have none of these, then you run the risk of your property being distributed to your extended family and possibly people whom you would prefer did not receive anything.

It can also delay the appointment of an Executor, causing other unnecessary costs and delays along the way, which may increase the levels of conflict within your immediate family.

Who Can Create A Will?

Anyone who is 16 years or older and of sound mind may create a Will. It is, however, a legal requirement that the signing of a Will is witnessed by two people older than 14 and that the Will is in writing, with every page initialled and signed on the last page, by both the benefactor of the Will and the witnesses present. The Will allows you to appoint your choice of an Executor, as well as to divide up your assets.

What Are The Responsibilities Of An Executor Of An Estate?

During your life, you will assemble assets in the form of property, motor vehicles, etc. All these assets contribute to what is known as your “Estate”. On your death, these assets need to be overseen and distributed to the relevant beneficiaries. An Executor is a person who will administer this process and ensure that the details of your Will are carried out according to your instructions. It should take, on average, 7 to 18 months to finalise your estate – but there can be exceptions.

The Executor will meet with your family, shortly after your death, to gather all the documentation and information required to oversee the dispersal of your assets. They will also be required:

  • To report the deceased estate to the local Master of the High Court.
  • To provide notice of your passing to any debtors and/or creditors.
  • To close your existing accounts.
  • To determine the total value of your estate after all the debts have been paid.
  • To distribute the remaining assets to your beneficiaries.

It is important to note that Executors charge a fee to administer the Deceased Estate and these fees are currently 3.5% of the gross value of the Deceased Estate. Depending on who the Executor is, may depend on how negotiable this percentage is.

What If There Is No Cash, Or Your Estate Is In Debt Without Any Assets?

If there is no cash in your estate, but perhaps a few assets such as a house and a car, then the Executor may request the beneficiaries of your Will to pay any shortfall, or request their permission to sell the assets to obtain cash in your estate.

If your estate is in debt when you die and you have no assets, your family will need to report this to the Master. The Master will then issue a letter confirming that your estate was reported and that there are no assets. This letter will be sent to any companies to which you owed money at the time of your death.

Where Should You Keep Your Will?

You need to ensure that the original signed Will is kept safe by someone you trust or by your bank or Attorney. You may have more than one signed copy of the original Will to ensure that it is never lost. However, an original signed copy must be obtainable after your death. Photocopied signatures will invalidate your Will.

Why You Should Use An Attorney To Draft Your Will.

Although you are not legally required to use an attorney to draft your Will, you should obtain their professional services. A Will is a very specialised document, and you need to ensure that it complies with all the relevant rules and regulations, to be accepted as a valid Will.

When Should You Update Your Current Will?

It may be time to review your current Will in the event of any births, deaths, new businesses or any other legal events that took place in your family, since you last drafted your Will, as these events may have an impact on your assets or beneficiaries. It may also be worthwhile having an Attorney review your latest Will to check that it is still valid.

Furthermore, if your estate is a very complex one, it is best to nominate an Attorney firm, such as AED Attorneys. They will also provide you with the necessary legal guidance and other helpful tips to ensure that all bases have been covered.

AED Attorneys is in good standing with all Master’s offices and has a dedicated Consultant who attends to this work.

Furthermore, AED Attorneys has built a professional network of experienced service-providers to assist with the many services that a Deceased Estate may require, such as auctioneers, appraisers, bookkeepers, etc. This has provided AED’s clients with peace of mind during what is a very challenging time in their lives.

The AED team is known for their compassion, understanding and desire to go the extra mile for all their clients. In her own words, Annie Davids, Founder of AED Attorneys, says, “I aim to provide a service that connects with clients, most of whom need sympathy and understanding or a wise voice to explain the finer points of family-related legal processes in South Africa.”

For a trustworthy firm that values long-standing client relationships, contact AED Attorneys to assist you in drafting your Will or in updating your existing Will.

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.

Appointing A Guardian In Your Will

The Importance Of Appointing A Guardian In Your Will

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

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

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

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

How Children Are Protected Under The South African Constitution

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

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

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

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

Who Can Be Appointed As A Guardian?

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

Appointing A Family Member As A Guardian

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

Alternative Guardians

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

Nominating Guardians In Your Will

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

AED Attorneys For A Well-Structured Will

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

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

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

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

The_Living_Will-

 The Living Will  

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

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

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

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

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

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

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

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

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

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

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