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The basics of creating a Last Will & Testament

The basics of creating a Last Will & Testament

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Who your property is passed on to depends on whether you have a valid will or not. If you do have a valid will, then your property will be divided according to your wishes stated therein. If you die without a will (called “intestate”), then your property will be divided amongst your immediate family according to the laws of intestate succession.

How can I create a Will?

If you are older than 16, you have the right to create a will, to state who you would want your property to go to when you die. In order for your will to be valid, it needs to be compiled in the proper way. According to the law, you have to be mentally competent when you compile your will; this means that you must understand the consequences of creating a will and that you must also be in a reasonable state of mind when you do so.

You must make sure that your will is in writing in order for it to be valid.

Two people older than 14 years must witness the creating of your will (preferably theses witnesses should not be beneficiaries of the will).

You have to initialise every page of the will and then sign the last page. The witnesses must also initialise and sign the will.

You can, and should, approach an Attorney (Jan L Jordaan Inc) to help you draw up your will to avoid creating an invalid will.

You can appoint an executor in your will to divide your property amongst your loved ones. An executor is the person who will make sure that your property is divided according to your wishes, as set out in your will, and he/she will also settle your outstanding debts. If you don’t choose an executor yourself, then the Master of the High court will appoint someone, which is usually a family member.

What are the risks of not having a Will?

If you don’t have a valid will when you die, your property will be divided according to the rules set out by the Intestate Act. In simple terms these rules state that a married person’s property will be divided equally amongst their spouse and children. If you don’t have a spouse or any children, then your property will be divided between other family members.

The beneficiaries of your estate will be determined according to the laws of intestate succession, if you die without a will. This law determines the distribution of your assets to your closest blood relatives, meaning that your assets may be sold or split up against your wishes. Some of your assets could be given to someone in your family that you did not intent to benefit from your estate.

Without a will, you cannot leave a specific item to a specific family member or friend.If you live with someone but are not married to them, the law will not necessarily recognise him/her as a beneficiary of your estate, unless you have left a will naming them as a beneficiary.

References:

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)

Free Will and testament

Free Will and testament

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IN CONJUNCTION WITH THE INITIATIVE OF THE LAW SOCIETY OF SOUTH AFRICA WE OFFER OUR CLIENTS THE OPPORTUNITY TO HAVE THEIR WILL DRAWN UP BY JAN L JORDAAN INC AT NO CHARGE.

As from 1 September until 30 September 2017 we will be offering our services to the public wherein we will be drawing up a WILL AT NO CHARGE.

This initiative is in line with the National Wills Week presented by the Law Society of South Africa.

The aim of the Campaign will be to encourage members of the public to consult with an Attorney to draft a Will, and to receive guidance of the advantages and the necessity of having a will.

Please call Sharon to set up an appointment with one of our Attorneys.

CALL US ON +27 11 748 4500 OR CLICK HERE TO BOOK YOUR APPOINTMENT WITH US TODAY

Acquisition of Immovable property: Transfer Duty or VAT or Exemption?

Acquisition of Immovable property: Transfer Duty or VAT or Exemption?

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A transaction cannot be subject to both VAT and transfer duty.

Transfer Duty:

Transfer Duty is payable within six (6) months from the date of acquisition (the date of acquisition is the date on which the transaction was entered into, that is the date on which the last-contracting party signed the agreement).

If the Transfer Duty is not paid within this period, interest, calculated at 10% per annum, is payable for each completed month after the initial 6 months.

The 6 month rule applies regardless of whether the agreement is subject to any conditions. For example, if a seller accepts an offer to purchase on the 15 August 2017, subject to the purchaser obtaining finance by 15 September 2017, the date of acquisition is 15 August 2017, not the date on which the Purchaser meets the condition. Similarly, an addendum that sets out further terms or amendments to the original agreement does not alter the date of acquisition.

Do not think you can take advantage by cancelling an agreement and then entering into a new agreement in respect of the same property. Such a transaction shall be seen as having been entered into for the purpose of evading or avoiding transfer duty.

Transfer duty is based on the value of the property, not the price. In the case of a property acquired by way of a sale between a willing Purchaser and a willing Seller dealing at arm’s length on the open market, SARS will generally regard the purchase price to be the value of the property. But this principle may not always hold true.

Transfer duty is based on the highest of:

* The purchase price;

* The declared value, which is the value placed on the property by the parties to the transaction where there is no consideration; or

* The fair market value.

No transfer duty is payable if a property is acquired for R900 000.00 or less.

VAT:

It is common for developers to market properties by highlighting that buyers will not pay transfer duty. Instead, buyers will pay VAT of 14 percent, although this is included in the selling price.

The Transfer Duty Act exempts from duty the acquisition of any property that falls into the category of goods supplied subject to VAT. The payment of VAT always takes precedence over transfer duty where the supplier is a VAT vendor.

Transfer duty is payable if the seller is a registered VAT vendor, but the property does not form part of the seller’s enterprise. For example, if a VAT vendor sells his or her private residence, transfer duty does apply, because the property is not being supplied as part of the vendor’s business. If the seller is not registered for VAT, but the buyer is and will use the property in the course of his or her VAT enterprise, the Purchaser will pay transfer duty, but will be entitled to claim a notional input tax.

No Transfer Duty or VAT

It is possible for a property purchase to be free of both transfer duty and VAT. In terms of the VAT Act, a transaction may be zero-rated (VAT applied at zero percent) if the following requirements are met:

  • Both the seller and the buyer are registered as VAT vendors;
  • The seller and the purchaser agree in writing that the property is sold as a going concern;
  • The property is used for the purpose of earning an income;
  • The sale of the property includes all the assets required for carrying on the income-earning activity; and
  • The seller and the purchaser agree in writing that the purchase price is inclusive of VAT at the rate of zero percent. 

Further Exemptions: No Transfer Duty or VAT

Property transfers are exempt from transfer duty in the following circumstances;

* Marriage in community of property. If someone who owns a property gets married in community of property, his or her spouse will automatically become the owner of a half-share of the property, without paying any transfer duty.

* Divorce. Transfer duty does not apply if a property is awarded to a spouse in terms of a divorce order. The exemption applies to all marital regimes and to civil unions. However, if the property is not awarded to a spouse in terms of a divorce order and the parties reach an agreement outside of the formal divorce proceedings, the spouse who acquires the property will be liable for transfer duty.

* Inheritance. Heirs and legatees (beneficiaries) are exempt from paying transfer duty on property inherited from a deceased estate, regardless of the nature of their relationship with the deceased and irrespective of whether or not the deceased died intestate (without a valid will).

* Rectifying of registration errors. No duty is payable when an error in the registration of the property is corrected, provided the transfer duty applicable to the acquisition has been paid.

* Transactions declared void by a court. If a transaction is declared void by a court and the property is transferred back to the original owner, there is no transfer duty to pay.

* Transfers to trustees, administrators, beneficiaries and insolvent persons. Although transfer duty is payable on transfer to a trust, it is not payable in certain instances, such as when:

  • The registration of a property is changed because a trust or an insolvent estate appoints a new trustee or administrator.
  • The administrator of a trust transfers a property to someone who is entitled to it in terms of a will or other written instrument. This exemption applies only to testamentary trusts and inter vivos trusts where the beneficiaries are related to the founder of the trust.
  • A trustee transfers property back into the name of a previously insolvent person.

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Do I need an antenuptial contract before marriage?

Do I need an antenuptial contract before marriage?

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An antenuptial contract is an important document that, under South African law, determines whether your marriage will exist in community of property or out of community of property, with or without the accrual system.

An antenuptial contract offers a number of benefits:

  1. Preventing your intended marriage from automatically being in community of property
  2. Offering transparency in your relationship by recording the rights, duties and consequences (legal and proprietary) of your marriage
  3. Preventing unnecessary disputes with your spouse down the line
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What is marriage in community of property

There is one estate between a husband and a wife. Property and debts acquired prior to or during the marriage are shared equally in undivided shares (50%). Both spouses are jointly liable to creditors.

What is an Antenuptial contract?

A contract entered into to regulate whether a marriage will be out of community of property with/without the accrual system. An ante nuptial contract must be signed by the persons entering into a marriage, two witnesses and a notary public, and it must be registered in the Deeds Registries office within the prescribed time period.

The accrual system

In a marriage out of community of property WITHOUT the accrual system, the spouses have their own estates which contain property and debts acquired prior to and during the marriage (“what is mine is mine and what is yours is yours”). Each spouse is separately liable to his/her creditors. Prior to the marriage, an ante nuptial contract must be entered into to indicate that the marriage will be out of community of property.

A marriage out of community of property WITH the accrual system is identical to a “marriage out of community of property” but the accrual system will be applicable. The accrual system is a formula that is used to calculate how much the larger estate must pay the smaller estate once the marriage comes to an end through death or divorce. Only property acquired during the marriage can be considered when calculating the accrual. The accrual system does not automatically apply and must be included in an ante nuptial contract.

Conclusion

After marriage, the terms of the antenuptial contract become irrevocable unless they are amended by an order of the Supreme Court or, in some cases, by a notarial contract which must be registered in a deeds registry.

Reference:

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)

How is a deceased’s estate administered?

How is a deceased’s estate administered?

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The administering of a deceased estate is regulated by the Administration of Estates Act No 66 of 1965 (as amended) and divided according to a valid will or the Intestate Succession Act No 81 of 1987 (as amended) or a combination of both acts.

Various other acts and regulations may, however, also be applicable, like those applicable to income tax (with due allowance for VAT and CGT), Estate duty and Donations tax, and support of surviving spouse.

After a death

When someone dies, his/her estate must be reported to the Master of the High Court as soon as possible, and certain report documents, together with the original will, where applicable, should be delivered to the Master.

In the case of estates with a gross value of less than R250 000 the Master may dispense with an official appointment of an Executor to execute the required administering process. In all other cases, an Executor will be appointed by the Master, who will issue an Executor’s letter to the appointed Executor.

The Executor

As soon as the Executor’s letter has been issued the formal administering of the estate, which the Executor has to follow, will commence. One of the Executor’s first tasks would be to announce to the creditors, acquire details regarding estate assets and have it valued if necessary, and recover certain assets. Known and filed liabilities should be investigated and attention must be paid to income tax.

The Executor is now compelled to submit a liquidation and distribution account (statement of assets and liabilities) to the Master of the High Court within six months after being issued with the Executor’s letter, or ask for a formal postponement. This estate account will indicate all assets and liabilities, distribution of heirs and details of assets outside the estate which are directly payable to beneficiaries.

The Master will check the estate account and then issue a questionnaire to the Executor. As soon as the Master has granted approval the Executor may proceed to announce the account as being open for inspection for 21 days at the Master and the nearest Magistrate’s Office.

Should any written challenges be submitted, it should be dealt with according to the regulations in the Administration of Estates Act. Should there be no challenges, or when the Executor has disposed of all challenges, the Executor may proceed to make payments to heirs and carry over any other assets to the beneficiaries.

Administering obstacles

In most cases the administering process should not be complicated, therefore it would be possible to finalise within a fair period of time (approximately six to nine months). There are, however, many obstacles which may slow down this process and even bring the administering process to a virtual standstill. Some of the most well-known and general obstacles are poor service from government and private institutions, invalid and unpractical wills, shortage of cash, quarrels and disputes among family members and beneficiaries, lack of information, disorder in the tax and other affairs of the deceased, lawsuits before and after death, and legal post-mortems in case of an unnatural death, which may sometimes be required before policies can be paid out.

Conclusion

The administering of an estate is a specialised environment which should be left to capable people with knowledge of the Administration of Estates Act and years of experience. Ignorance regarding the run of events as well as errors of judgement may eventually cost you dearly if you don’t make use of the available expertise.

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)

What should a conveyancer do?

What should a conveyancer do?

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Conveyancing (or conveyance) is the legal term for the process whereby a person, company, close corporation or trust becomes the registered and legal owner of immovable property and ensures that this ownership cannot be challenged. It also covers the process of the registration of mortgages.

Conveyancing in South Africa can only be carried out by an admitted conveyancer, i.e. a lawyer who has passed the National Conveyancing Examination.

After an agreement of sale has been made, a conveyancer is appointed (normally by the seller, although the buyer will pay the fees) and instructions are sent to him/her by the Estate Agent or the Seller. These include the names of both the buyer and the seller, a copy of the agreement of sale, and the passport numbers and marital status of the buyer and seller.

The conveyancer should:

  1. protect the interest of all the parties at all times, and these interests should outweigh all other considerations except of course issues of legality;
  2. inform the parties of the conveyancing procedure and keep both the Seller and purchaser informed of the progress of the transaction;
  3. advise the seller on the cancellation of his bond, any penalties, notice periods and other administrative charges which may affect the settlement figure;
  4. do everything in his power to register the transaction on or as close as possible to the date agreed to in the offer to purchase;
  5. advise the parties on their obligations in terms of the offer to purchase, so as to ensure that the transfer is not delayed;
  6. meet with both the Seller and Purchaser to explain, as well as sign the necessary documentation in order to conclude the transaction;
  7. prepare the deeds for lodgement with care, so as to minimise the risk of rejection of the documentation by the Deeds Office;
  8. inform the parties of the transfer on the day of registration;
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The process of selling and transferring your valued property can have many pitfalls if the correct advice is not received. This is why it is imperative to be cautious and maintain a serious regard for your own interests when choosing the right attorney to take responsibility for the transfer of ownership.

When looking for a conveyancer one must examine the following pre-requisites:

  1. Is the conveyancer known?
  2. Is the conveyancing firm well established?
  3. Does the conveyancer have experience? Is the firm of appointed attorneys outsourcing the transaction to a conveyancing firm unknown to the seller? Not all firms have conveyancers.
  4. Does the conveyancer have experience in what you require to be done?
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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)

Co-owning property with someone else: The ups and downs

Co-owning property with someone else: The ups and downs

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What is co-ownership?

Co-ownership is when one or more people jointly own the same property. In essence, it is when they legally share ownership without dividing the property into physical portions for their exclusive use. It is thus commonly referred to as co-ownership in undivided shares.

It is possible to agree that owners acquire the property in different shares; for instance, one person owns 70 percent and the other 30 percent of the single property. The different shares can be recorded and registered in the title deeds by the Deeds Office.

The benefits

On paper, it’s a great idea. For starters, the bond repayments and costs of maintaining the home are halved. However, there can be problems and although not every friendship or relationship is destined to disintegrate, there does often come a time when one of the parties involved wants to sell up and move on to bigger and better things.

The risks

If ownership is given to one or more purchasers, without stipulating in what shares they acquire the property, it is legally presumed that they acquired the property in equal shares.

The risks, the benefits and the obligations that flow from the property are shared in proportion to each person’s share of ownership in the property. For instance, one of the co-owners fails to contribute his share of the finances as initially agreed, resulting in creditors such as the bank or Body Corporate taking action to recover the shortfall.

Having an agreement

If two people own property together in undivided shares it is advisable to enter into an agreement which will regulate their rights and obligations if they should decide to go their own separate ways.

The practical difficulties that flow from the rights and duties of co-ownership are captured by the expression communio est mater rixarum or “co-ownership is the mother of disputes”. It is therefore important that, when the agreement the co-owners entered into does not help them solve disputes, certain remedies are available to them.

The agreement should address the following issues:

  1. In what proportion will the property be shared?
  2. Who has the sole right to occupy the property?
  3. Who will contribute what initial payments to acquire the property.
  4. Who will contribute what amounts to the ongoing future costs and finances.
  5. How the profits or losses will be split, should the property or a share be sold?
  6. The sale of one party’s share must be restricted or regulated.
  7. The right to draw funds out of the access bond must be regulated.
  8. A breakdown of the relationship between the parties.
  9. Death or incapacity of one of the parties.
  10. Dispute resolution options before issuing summons.
  11. Termination of the agreement.
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References:

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)

How can a person get married in South Africa?

How can a person get married in South Africa?

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A person can get married in terms of a civil marriage, customary marriage, civil union or religious marriage. A religious marriage is not recognised as a valid marriage, but the spouses in a religious marriage can be protected by law in certain instances.

What are the general requirements for a valid marriage?

  • Both persons to the marriage must give consent to get married and must be older than 18 years of age.
  • A person younger than 18 years of age, needs the permission of his/her parent/s or guardian/s to get married. No person younger than 18 years of age can enter into a civil union.
  • The marriage must be lawful, for example:
    • persons who are closely related (such as brother or sister, or parent and child) may not get married; or
    • a person may not have more than one marriage at a time, except for customary marriages.
    • Certain formalities must be adhered to, such as that the marriage must be concluded by a marriage officer and in the presence of two witnesses.
    • A marriage must be registered at the Department of Home Affairs.
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The difference between marriage in and out of community of property

  • MARRIAGE IN COMMUNITY OF PROPERTY:

there is one estate between a husband and a wife. Property and debts acquired prior to or during the marriage are shared equally in undivided shares (50%). Both spouses are jointly liable to creditors.

  • MARRIAGE OUT OF COMMUNITY OF PROPERTY WITHOUT THE ACCRUAL SYSTEM:

the spouses have their own estates which contain property and debts acquired prior to and during the marriage (“what is mine is mine and what is yours is yours”). Each spouse is separately liable to his/her creditors. Prior to the marriage, an ante nuptial contract must be entered into to indicate that the marriage will be out of community of property.

  • MARRIAGE OUT OF COMMUNITY OF PROPERTY WITH THE ACCRUAL SYSTEM:

this is identical to a “marriage out of community of property” but the accrual system will be applicable. The accrual system is a formula that is used to calculate how much the larger estate must pay the smaller estate once the marriage comes to an end through death or divorce. Only property acquired during the marriage can be considered when calculating the accrual. The accrual system does not automatically apply and must be included in an ante nuptial contract.

References:

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)

What is a Title Deed?

What is a Title Deed?

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If you are planning to buy a new property, you will need to get the title deed transferred into your name to prove that you are the owner of the property. You will need the assistance of a lawyer specialising in property transfers (also known as a conveyancer) to help you transfer the title deed into your name.

You will only become the owner of the property when the Registrar of Deeds signs the transfer. After it has been signed, a copy of the title deed is kept at the Deeds Office closest to you.

A Title Deed is documentary proof of ownership in terms of the Deeds Registries Act 47 of 1937. Each property has its own separate Title Deed. It is an important document containing all the details pertaining to a particular property.

These details are:

  • The name of the existing owner as well as the previous owners.
  • A detailed property description which includes size.
  • The purchase price of the property paid by the existing owner.
  • Conditions applicable to the zoning, use and sale of the land.
  • All real rights registered in respect of the property.
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The owner will normally have the Title Deed or a copy thereof in his possession. Before signing an offer to purchase carefully scrutinize the Title Deed.

What is The Deeds Office and The Deeds Registry?

There are numerous Deeds Offices throughout South Africa. Each Deeds Office holds a Deeds Registry, containing filed Title Deeds of all the properties in its particular jurisdiction. All the Deeds Registries are linked to a computer network. Your estate agent can, via a computer-linked facility from his office, examine any Title Deed (registered from 1980) in the country’s combined Deeds Registry.

What’s the Difference Between a Property Deed and a Title?

Title is the legal way of saying you own a right to something. For real estate purposes, title refers to ownership of the property, meaning that you have the rights to use that property. It may be a partial interest in the property or it may be the full. However, because you have title, you can access the land and potentially modify it as you see fit. Title also means that you can transfer that interest or portion that you own to others. However, you can never legally transfer more than you own. Deeds, on the other hand, are actually the legal documents that transfer title from one person to another. Sometimes the Deed is referred to as the vehicle of the property interest transfer.

References:

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 CONSUMER PROTECTION ACT AND YOUR RIGHTS

THE CONSUMER PROTECTION ACT AND YOUR RIGHTS

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The South African Consumer Protection Act, No. 68 of 2008 was signed on 24 April 2009 and the purpose of the Act is to protect the interests of all consumers, ensure accessible, transparent and efficient redress for consumers who are subjected to abuse or exploitation in the marketplace and also to give effect to internationally recognised consumer rights. The Consumer Protection Act define a consumer as any person to whom goods and services are marketed, who is a user of the supplier’s goods, enters into a transaction with the supplier or service provider of any services and products.

If you have a complaint and the supplier won’t resolve it for you, you can complain to your provincial Consumer Affairs Office or the National Consumer Commission as well as other bodies.

The Consumer Protection Act:

  1. ensures that you are treated as an equal and protects you against discrimination in economic transactions.
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  2. protects your privacy and ensures fair practice when goods or services are marketed to you.
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  3. means you have the right to choose the agreements you enter into and continue with.
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  4. gives you the right to the disclosure of information so that you can make informed choices.
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  5. protects you against fraud and other dishonest practices.
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  6. makes sure that you don’t have to agree to unfair conditions in the small print.
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  7. allows you to return things which don’t work properly.
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  8. protects you against goods and services that can harm you.
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  9. makes suppliers compensate you if they have caused you a loss.
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  10. ensures that you are educated on consumer issues and the results of your choices.
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  11. makes it possible for you to form groups to promote your interests.
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The Consumer Protection Act can help consumers in dealings which involve advertising, marketing, promoting, selling, supplying and delivering or repairing of goods and services in South Africa.

You are a consumer if you have made a deal with a supplier, for example, when you pay for goods or services, or if goods or services are marketed to you.

Goods include things, but also information and data and the licence to use it. Services include receiving advice or training you pay for, transport of people or goods, transactions at restaurants and hotels, entertainment and access to electronic communication. Employment relationships, credit agreements, deals between two private consumers and goods or services supplied to government do not fall under the Consumer Protection Act.

References:

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)