When would I need more than one Will?

By Sisteen Geyser – Director, Estates and Trust Department

A South African client who owns property in Namibia and the UK, recently asked me what would happen to his offshore assets if he were to die while resident in South Africa.

Although all the worldwide assets of a South African resident are potentially taxable under the Estate Duty Act, there may be assets that are exempt, e.g. inherited offshore assets, or assets which a person owned before becoming resident in South Africa for the first time.

In addition to tax implications there are practical problems arising from owning property in different countries or jurisdictions:  the rules applicable to the administration of a deceased estate differ.  In South Africa the Administration of Estates Act regulates the process, but different rules apply in other jurisdictions.

The solution to the smooth administration of an estate which includes foreign assets is to have a properly drawn up Will which deals with such assets, so that your Executor can give effect to your wishes for those assets.

The Will must comply with the legal requirements and inheritance rules of the specific country.  It should be in a language appropriate for that country.  An Afrikaans Will which needs to be translated into German before it can be used for your Swiss Estate will be a waste of both time and money.

Please contact our Estate and Trust Department, should you have queries about whether you need to have a Will for more than one jurisdiction, or assistance with the drafting of your Wills.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Dying without a Will, especially whilst owning Immovable Property, is a Recipe for a Family Feud:

By Sisteen Geyser – Director, Estates and Trust Department

It is a common but unfounded belief that the State will take over your assets if you die without a Will.

The Intestate Succession Act, no. 81 of 1987, sets out the rules of how the estate of a person who died without a Will should be divided between his/her family members.  It specifically makes provision for a surviving spouse, by ensuring that the spouse will inherit the first
R250 000 or a child’s share of the Estate, whichever is more.  A child’s share is calculated by dividing the value of the intestate estate by the number of children of the deceased (both surviving the deceased and deceased children who passed away leaving descendants), plus the number of spouses who have survived the deceased.

Problems arise where the deceased held immovable property, as the above rules would have the effect of the surviving spouse and all the children (or grandchildren representing a predeceased child) inheriting immovable property jointly.

Where the deceased is survived by children only, and they in turn have minor children, matters become even more complicated.  There may be problems about who will pay the costs of the administration of the estate and the costs of transferring the immovable property to the heirs, and co-ownership of the property by a number of family members may be impractical and give rise to disputes.

Prevention is better than cure in these circumstances.  To ensure that a surviving spouse or one child inherit the immovable property as sole owner, to avoid complicated and possibly contentious sharing, you should draw up your Will accordingly.

Should you wish to draw up a Will or simply revise your existing Will, please contact our Estate and Trust Department.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Can I amend my Will?

Having a Will is a final statement of how you want your assets to be managed after your death. However, sometimes you may want to change it. You may have had a child, for example, and want to add him/her into your Will. You may have also acquired more assets and would like to reconsider how they get divided among your possible heirs.

What is a Codicil?

When you want to add something to your Will or make a minor change, then you can make use of a Codicil. A Codicil is a minor addition or minor amendment to an existing Will. The legal requirements for a valid Will also apply to a Codicil. A Codicil needs not be signed by the same witnesses who signed the original Will.

What if I want to amend my Will?

  1. All amendments to a Will must comply with the legal requirements as stipulated in the Wills Act. If you want to make material amendments to an existing Will, it is always advisable to draft and sign a new Will.
  2. The original Will and the Codicil are separate documents, signed at different times and not necessarily before the same witnesses.

Must I amend my Will after divorce?

A bequest to your divorced spouse in your Will, which was made prior to your divorce, will not necessarily fall away after divorce.

  1. The Wills Act stipulates that, except where you expressly provide otherwise, a bequest to your divorced spouse shall not take effect if you die within three months of the divorce.
  2. This provision is to allow a divorced person a period of three months to amend his/her Will, after the trauma of a divorce.
  3. Should you however fail to amend your Will within three months after your divorce, your divorced spouse will benefit as indicated in the Will.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

References:

http://www.justice.gov.za/master/m_deseased/deceased_wills.html

 

5 Reasons to do Estate Planning TODAY

Drawing up a Will and doing Estate Planning may sound like hard work, but here are some reasons why you should do this TODAY:

  1. It means that you are providing for your loved ones:

In addition to looking after your health and the health of your family, you also should be planning for their financial wellbeing after your death.  None of us wants to think about dying, but to neglect planning for it can be disastrous for your family.

  1. No estate is too small for planning:

Even if you think that you do not own much, you need to plan for somebody to be appointed as Executor of your Estate.  You have to make provision for a Guardian if you have minor children, and plan how inheritances of minors should be managed after your death.

  1. With proper advice, the process is not complicated:

You may think that Estate Planning is complicated and difficult.  Now is the time to discuss with our experts the questions you have.  They can explain the process, and advise on which documents you need to have drawn up.

  1. Estate Planning need not be time-consuming:

Once you have discussed the basics with one of our experts and taken the important decisions, most of the planning process can be done via email or the telephone.  We will then finalize the documents for your signature, and assist you with the formalities.

  1. Spending money now will save money later:

Yes, it will cost money to have an attorney draw up your Will and Estate Plan, but having a properly drawn up Will, which has been executed (signed) correctly, ensures that there will be no complications after your death.  If your Estate Plan is updated regularly to take into account any changes in legislation, you also ensure that no unnecessary taxes are paid after your death.

Should you want to draw up a Will, or update your Will, or simply check that your Estate Plan still meets your needs, you are most welcome to contact our Trust and Estate Planning Department today.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

 

Dealing with marriage and estate planning

It is important to understand the legal implications of the marital property regime, especially when drafting a Last Will and Testament and also when entering into a marriage, as the regime chosen by the estate planner is going to affect his/her assets.The most important forms of marriage are: marriage in community of property, marriage out of community of property (without accrual), and marriage out of community of property (with accrual).

Marriage in community of property

1. There is no prior contractual arrangement, apart from getting married;
2. Spouses do not have two distinct estates;
3. There is a joint estate, with each spouse having a 50% share in each and every asset in the estate (no matter in whose name it is registered);
4. Applies to assets acquired before the marriage and during the marriage;
5. Should one spouse incur debts in his own name it will automatically bind his/her spouse, who will also become liable for the debt;
6. If a sequestration takes place (in the case of insolvency), the joint estate is sequestrated.

Marriage out of community of property without the accrual system

1. An antenuptial contract (ANC) is drawn up by an attorney (who is registered as a notary), before the marriage;
2. Where there is no contract, the marriage is automatically in community of property;
3. The values of each spouse’s estate on going into the marriage are stipulated in the contract;
4. A marriage by ANC means that all property owned by spouses before the date of the marriage will remain the sole property of each spouse;
5. Each spouse controls his/her own estate exclusively without interference from the other spouse, although each has a duty to contribute to the household expenses according to his/her means;
6. To allow for assets acquired by spouses during the marriage to remain the sole property of each spouse, the accrual system must be specifically excluded in the ANC.

Marriage out of community of property with the accrual system

1. The accrual system automatically applies unless expressly excluded in the antenuptial contract;
2. The accrual system addresses the question of the growth of each spouse’s estate after the date of marriage.

Estate planning

Donations between spouses are exempt from donations tax and estate duty.

Marriage in community of property

1. In the event of the death of one spouse, the surviving spouse will have a claim for 50% of the value of the combined estate, thus reducing the actual value of the estate by 50%. The estate is divided after all the debts have been settled in a deceased estate (not including burial costs and estate duty, as these are the sole obligations of the deceased and not the joint estate).
2. When drafting a Last Will and Testament, spouses married in community of property need to be aware that it is only half of any asset that he or she is able to bequeath.
3. Upon the death of one spouse, all banking accounts are frozen (even if they are in the name of one of the spouses), which could affect liquidity.
4. Donations or bequests to someone married in community of property can be made to exclude the community of property; in other words, if the donor stipulates that the donation must not fall into the joint estate, then the donee can build up a separate estate. However, returns on such separate assets will go back to the joint estate.

Marriage out of community of property without the accrual system

Each estate planner (spouse) retains possession of assets owned prior to the marriage.

Marriage out of community of property with the accrual system

A donation from one spouse to the other spouse is excluded from the calculation of each spouse’s accrual; in other words, the recipient does not include it in his growth and the donor’s accrual is automatically reduced by the donation amount.

Divorce

In the event of divorce, the marriage will be dissolved by court decree, which will address such aspects as child maintenance, access, guardianship and custody, spousal maintenance, the division of assets, division of pension interests and so on.

Cohabitation and definition of “spouse”

Cohabitation is defined as a stable, monogamous relationship where a couple who do not wish to or cannot get married, live together as spouses. The Taxation Laws Amendment Act has extended the definition of “spouses” to include “a same sex or heterosexual union which the Commissioner is satisfied is intended to be permanent”.

Many pieces of legislation, including the Pension Funds Amendment Act and the Taxation Laws Amendment Act, now define spouse to include a partner in a cohabitative relationship, the effects of which are that cohabitees will benefit from the Section 4(q) estate duty deduction in the Estate Duty Act, and the donations tax exemptions of the Income Tax Act.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

The Living Will

Most people are familiar with a will or testament and understand the importance of having this legal declaration drafted, by which the testator nominates an executor to manage his or her estate and provide for the distribution of his or her property to beneficiaries when he or she dies.

But how many people have considered drafting a living will?

A living will does not deal with assets, heirs and beneficiaries, but with the philosophy of death and dying, and should be considered carefully and drafted by a professional.

A living will is a legal document expressing a person’s wishes regarding life-prolonging medical treatment when that person can no longer voice his or her wishes. It is also referred to as an advance medical directive.

A typical clause in a living will would read as follows:

If the time comes when I can no longer take part in decisions for my own future, let this declaration stand as my directive.

If I suffer from physical illness or impairment expected to cause me severe distress, rendering me incapable of rational existence, from which there is no reasonable prospect of recovery, I withhold my consent to be kept alive by artificial means and do not give my consent to any form of tube-feeding when I am dying; and I request that I receive whatever quantity of drugs and intravenous fluids as may be required to keep me comfortable and free from pain even if the moment of death is hastened. I withhold my consent to any attempt at resuscitation, should my heart and breathing stop and my prognosis is hopeless.

The living will tells the doctor and family that the patient does not consent to being kept alive artificially. It speaks for the patient at a time when the patient may be unable to communicate.

South African law and most religions accepts the validity of the living will, but none of the main religions accept euthanasia.

Euthanasia is against the law. Sean Davison, the respected UWC professor who helped his 85-year-old terminally ill mother, Patricia Ferguson, die in New Zealand by preparing a lethal dose of morphine, was arrested in New Zealand in September 2010 on an attempted murder charge.

It is important to have a properly drafted, legal living will to avoid far reaching and traumatic consequences for the loved ones that stay behind.

Many lawyers who practice in the area of estate planning include a living will and a health care power of attorney in their package of estate planning documents.

The advantages of a living will

  1. The directives respect the patient’s human rights, and in particular his or her right to reject medical treatment.
  2. It encourages full discussion about end-of-life decisions.
  3. It also means that the medical staff and caregivers are aware of the patient’s wishes, and knowing what the patient wants means that doctors are more likely to give appropriate treatment.
  4. It will avoid the situation where the patient’s family and friends have to take the difficult decisions.

Disadvantages of a living will

  1. Drafting this document can be very depressing.
  2. The person may still be healthy and not in a position to actually imagine that he or she could ever be in the position where they would voluntarily give up living.
  3. When the time comes to act on the living will the patient might have changed his or her mind and it is then often difficult to amend the document.

Important points to consider

  1. The living will should not be incorporated or attached to the last will and testament, which is only acted upon after death.
  2. A living will does not become effective unless the patient becomes incapacitated; until then the patient will be able to choose appropriate treatment.
  3. A certificate by the patient’s doctor and another independent doctor certifying that the patient is either suffering from a terminal illness or permanently unconscious, is required before the living will becomes effective. In the case of a heart attack, the living will does not take effect. A living will is only executed when ultimate recovery is hopeless.
  4. You have to notify your doctor and family of your living will and preferably have copies of the document available for the doctor, hospital and family.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)