Jan L Jordaan – Page 4 – Jan L Jordaan

What does the Deeds Office do?

February 15, 2017 Jan L Jordaan Comments 0 Comment

The Deeds Office is responsible for the registration, management and maintenance of the property registry of South Africa. If you are planning on buying a house, it can be useful knowing about the Deeds Office. However, you would use the services of a conveyancer when buying or selling a house. Your estate agent should be able to recommend a conveyancing attorney to register your home loan and transfer a property into your name.

What is conveyancing?

Conveyancing 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.

Steps taken by the conveyancer:

The conveyancer lodges your title deed and other documents in the Deeds Office for registration. These documents will be individually captured on the system. If there is a bond, the conveyancer dealing with the bond will lodge the bond documents with the Deeds Office at the same time as the transfer documents. The transfer, bond and cancellation documents must be lodged in the Deeds Office at the same time to ensure simultaneous registration. If different conveyancers are dealing with registering the purchaser’s bond and cancelling the seller’s bond, then they will need to collaborate.
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The Deeds Office examiners go through the documentation that has been submitted, and make sure that it complies with the relevant laws and legislations.
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The examiners then inform the conveyancer that the deeds are ready to be registered.
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Registration takes place with the conveyancer and Registrar of Deeds present. The transfer of the property is then registered in the purchaser’s name. If there is a bond, it is registered at the same time.
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Upon registration, the purchaser becomes the lawful owner of the property. The title deed that reflects this ownership is given to the conveyancer by the deeds office after the registration. Unless a bond has been registered as well, in which case the title deed is given to the bond holder.
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The time taken to register a property at the Deeds Office depends on various factors and a number of parties. On average, registering a property transfer takes six to eight weeks, although unforeseen difficulties can cause the period to be extended.

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)

Owning property without a Will

February 15, 2017 Jan L Jordaan Comments 0 Comment

If you die without a will, an administrator will have to be appointed to administer your estate which will be distributed according to the laws of intestate succession. As such, your assets may not be distributed as you would have wished. It also means that the process will be delayed and that there will be additional expense and frustration which most people would not want to inflict on their loved ones during a time of loss.

Marriage and property

When drafting your will, it’s important to consider the nature of your relationship with your ‘significant other’. If you are married in community of property, you only own half of all assets registered in your name and that of your spouse. Your spouse therefore still remains a one half share owner of any fixed property you may want to bequeath to a third party which could potentially present difficulties.

If you are married in terms of the accrual regime, the calculation to determine which spouse has a claim against the other to equalise the growth of the respective estates only occurs at death. Your spouse may therefore have a substantial claim against your estate necessitating the sale of assets you had not intended to be sold.

Alongside your will, you should also prepare the following in relation to any immovable property you may own:

State where your title deeds are kept and record any outstanding bonds and all insurance
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File up-to-date rates and taxes receipts
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Record details of the leases on any property you have
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State who collects your rent
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State who compiles your yearly accounts
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State where your water, lights and refuse deposit receipts are kept
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If you die without a will

According to the according to Intestate Succession Act, 1987, your estate will be distributed as follows:

Only spouse survives: Entire estate goes to spouse.
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Only descendants survive: Estate is divided between descendants.
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Spouse & descendants survive: The spouse gets R250 000 or a child’s share and the balance is divided equally between the spouse and descendants.
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Both parents survive: Total share is divided equally between both parents.
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One parent: Total Estate goes to the parent.
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One parent & descendants: Half the Estate goes to the parent; balance is divided equally amongst descendants.
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No spouse; No descendants; No parents; but descendants through mother & descendants through father: Estate divided into two parts: half to descendants through mother; half to descendants through father.
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No spouse; No descendants; No parents; No descendants through mother or father: Full Proceeds of the Estate has to be paid into the Guardians Fund in the event of no descendants whatsoever.
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References:

Pitfalls of appointing the surviving spouse as executor/trix:

January 10, 2017 Jan L Jordaan Comments 0 Comment

The appointment of the surviving spouse as executor seems to be the honourable and correct thing to do. This in particular where the deceased died without leaving a valid will, or failed to nominate an executor/trix in the last will and testament.

The fact that the surviving spouse normally doesn’t have to provide the Master with security and that it seems to be the next best thing can often become your worst nightmare.

This in particular the case where the spouse is the second or third wife and the deceased divorced wife and children are still around, alternatively where her/his own children will compete for inheritance in the intestate succession.

The problem comes when particularly maintenance claims are submitted against the estate of the deceased by the divorced spouse or children.

It leaves the Surviving spouse in the predicament of rejecting these claims, because it is almost always financially beneficial to do so.

This however is where the clash of interest manifests itself and where cool heads and caution is required.

The remedies available are limited and consist of the following:

• Enter into a suitable redistribution agreement if possible. (possible but difficult with minors)

• Negotiate a suitable solution to all parties.

• Resign as executor/trix and appoint an independent individual. This is the most common and used method, but often goes with a lot of emotion and costs.

• Bear in mind the newly appointed executor will almost always need to provide security, and finds himself in a hot seat to make the correct decision without favouring any party to this dilemma.

With the above in mind it is always good practice to foresee where possible, the potential of a clash of interest and to steer clear of this from the offset.

What is the cost of my estate duty?

November 23, 2016 Jan L Jordaan Comments 0 Comment

In terms of the stipulations of section 4 of the Estate Duty Act No 45 of 1955 certain deductions from the value of an estate are allowed in order to determine the final value of the estate which will be subject to estate duty.

The following two rebates are the most well-known:

Section 4(q) – This is the total value of all the benefits bequeathed to the surviving spouse. The value of a usufruct also qualifies as an Article 4(q) rebate; and
Section 4A – This is the value of the rebate applied to all estates, which is currently R3.5 million.

Given the value of the section 4A rebate you can rest assured that your estate will not be accountable for estate duty if the net value (assets minus liabilities) is less than R3.5 million. The amount with which your estate exceeds R3.5 million will, however, be taxable for estate duty at 20%.

The Taxation Laws Amendment Act, 2010, amended the section 4A rebate by allowing the part of the R3.5 million rebate not used by the estate of the first deceased spouse to be carried over to the estate of the surviving spouse. This amendment applies to the estates of individuals passing away after 1 January 2010.

The carried over rebate between spouses can be illustrated with the following example:

Mr A, who is married to Mrs A, passes away. The net value of his estate is R800 000 after the rebate according to Article 4(q) has been calculated.
This amount is bequeathed to his children and therefore not deductible for estate duty.
There is no accountability for estate duty as Mr A’s estate only used R800 000 of the section 4A rebate of R3.5 million.
At Mrs A’s passing the net value of her estate is R8 million. The following rebate is applicable to her estate: Section 4A rebate to the value of R7 million minus the R800 000 deduction already utilised in the estate of Mr A.
Mrs A’s estate will therefore pay estate duty on R1.8 million (R8 million minus R6.2 million).
R1.8 million @ 20% = R360 000.

We have to put the utmost stress on the importance of estate planning and a will which gives you the best benefits regarding the composition of your assets and liabilities should the net value of your estate exceed R3.5 million. This does not mean that the use of trusts becomes obsolete in estate planning due to the larger rebate in the surviving spouse’s estate. There are still valid reasons why the bequeathment of a trust by the first deceased is an excellent option, even though it does not initially effect a saving in estate duty. In case of such a trust the assets can be managed by the trustees to the benefit of the surviving spouse and children. A small effort today for much peace of mind tomorrow!

The living Will

November 23, 2016 Jan L Jordaan Comments 0 Comment

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

The directives respect the patient’s human rights, and in particular his or her right to reject medical treatment.

It encourages full discussion about end-of-life decisions.

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.

It will avoid the situation where the patient’s family and friends have to take the difficult decisions.

Disadvantages of a living will

Drafting this document can be very depressing.

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.

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

The living will should not be incorporated or attached to the last will and testament, which is only acted upon after death.

A living will does not become effective unless the patient becomes incapacitated; until then the patient will be able to choose appropriate treatment.

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.

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.

Is it beneficial to create a Trust?

November 23, 2016 Jan L Jordaan Comments 0 Comment

A Trust can be described as a legal relationship which has been created by the founder, who places assets under the control of Trustees. This either happens during the founder’s lifetime (inter vivos trust) or at the death of the founder (testamentary trust). This article will focus on the advantages and disadvantages of an inter vivos trust.

The advantage of a trust is firstly, that inter vivos trusts can be used to minimise estate duty. No estate duty should be payable on assets owned by the Trust as a Trust does not terminate or come to an end, since it has perpetual succession. Estate duty is currently taxed at 20% of the gross estate value. This saving in estate duty can be substantially large, especially for high net worth individuals who are worth millions of rands. Secondly, as the Trust’s assets are not owned by the beneficiaries, the creditors of the beneficiaries do not have a claim regarding the assets of the Trust. This advantage is especially important for people who are exposed to potential liability. Companies as well as individuals are able to transfer assets to Trusts. Lastly, because Trusts have perpetual succession, beneficiaries will be able to continue enjoying the benefit of the Trust assets even if one of the Trustees were to pass away.

The disadvantages are firstly, the costs of setting up a Trust, which can be high. It may cost up to R 20 000 to set up a Trust. If immovable property is transferred to the Trust then transfer duty needs to be paid. The founders of the Trust may also be liable to pay Donations tax, which is taxable at 20% of the value of the assets transferred to the Trust. Transfer duty is taxed according to a sliding scale. Secondly, Trustees could find themselves personally liable for losses suffered by the Trust if it can be proven that they did not act with care, diligence and skill in terms of section 9 of the Trust Property Control Act. It is important to note that “skill” requires more than just acting in good faith. Trustees may be proven to be negligent not only if they invested in risky investments, but also if they invested capital too conservatively, causing the capital not to grow sufficiently. Trustees also need to be aware of the fact that they can still be held liable if only one Trustee has signing power on behalf of the Trust and he/she makes a poor decision that holds all the Trustees liable for his negligence.

The founder of the Trust needs to recognise that the assets in the Trust do not belong to him/her anymore. The assets belong to the Trust. Should this loss of control (from founder to Trust) not occur, the Trust may be seen as an alter ego of the founder, which could result in the assets being included in creditors’ claims as well as having estate duty consequences.

The earnings from the assets in the Trust are taxed at 40%, and interest exemptions do not apply to Trusts. Also, the inclusion rate for Capital Gains tax for an inter vivos trust is 66.6% whereas the inclusion rate for individuals is 33.3%. Lastly, as we can see from the above, a Trust is not for everyone.

It is important to weigh up the advantages and disadvantages before deciding whether to go ahead or not. The best decision would be to speak to a certified financial planner or attorney who can assist you in making the correct decision regarding your personal situation.

Should I draft a will?

September 15, 2016 Jan L Jordaan Comments 0 Comment

A mother who has always wanted her daughter to inherit her diamond engagement ring may never get her wish granted if she dies without leaving a valid written will. The mother’s estate would then be distributed in terms of the Intestate Succession Act No. 81 of 1987.

Know where you want your possessions to go

Taking the time to draft a will can leave you with the peace of mind that your assets will be distributed according to your wishes as far as possible. Your will should reflect exactly how you want your assets to be dealt with after your death and should not be contra bonos mores (against good morals). It should also not amount to “ruling from the grave”.

What makes a valid will?

There are a number of legal requirements that have to be complied with for a will to be valid. If it does not comply with all of these requirements it could be found to be invalid. Your estate would then also be dealt with in terms of the Intestate Succession Act of 1987. It is therefore very importance that you obtain the assistance of a lawyer to help you raft a will.

A will should also regularly be revised and updated to adapt to your changing circumstances, for example after getting married, and when there is a child in the mix. Section 2B of the Wills Act No. 7 of 1953 (as amended by the Law of Succession Act No. 43 of 1992) deals specifically with a change in marital status by way of divorce, and reads as follows:

“If any person dies within three months after his marriage was dissolved by a divorce or annulment by a competent court and that person executed a will before the date of such dissolution, that will shall be implemented in the same manner as it would have been implemented if his previous spouse had died before the date of the dissolution concerned, unless it appears from the will that the testator intended to benefit his previous spouse notwithstanding the dissolution of his marriage.”

An example

A and B get divorced and B dies within three months of the date of the divorce. B’s will was executed before they got divorced. Unless B’s will specifically indicated that A must benefit from B’s estate despite the divorce, B’s estate will then be distributed as if A died before they got divorced. A will therefore not inherit from B’s estate in this scenario. However, should B die more than 3 months after the divorce and B’s will, which benefits A, was not changed, then it will be seen as if B intended A to inherit, despite the divorce.

A person who was previously married and who remarries, should ensure that the necessary changes are made to his/her will. If not, this could have profound consequences for the “new” spouse, especially if the will still benefits the spouse from the previous marriage.

When there are minor children in the picture, it is advisable to make adequate provision for their living costs and education in your will. This can be done by creating a testamentary trust of which the minor children can be beneficiaries.

Conclusion

Thinking and talking about one’s passing is not a pleasant subject. Having a valid, clear and unambiguous will can prevent unpleasant family feuds caused by them having to make decisions about the distribution of your estate. It is certainly worth the time and effort to have a valid written will in place.

References:

Drafting of Wills 2013 – LEAD

Intestate Succession Act 81/1987

Wills Act 7/1953

National Wills Month

September 15, 2016 Jan L Jordaan Comments 0 Comment

Taking the time to draft a will can leave you with the peace of mind that your assets will be distributed according to your wishes as far as possible.

Your will should reflect exactly how you want your assets to be dealt with after your death.

The National Wills Week (in Jan L Jordaan Inc’s case “Wills month”) is a joint initiative of the Law Society of South Africa and its six constituent members, the Black Lawyers Association, the Cape Law Society, the KwaZulu-Natal Law Society, the Law Society of the Free State, the Law Society of the Northern Provinces and the National Association of Democratic Lawyers.

During September 2016 Jan L Jordaan Inc. will attend your will at no charge.

There are a number of legal requirements that have to be complied with for a will to be valid. If it does not comply with all of these requirements it could be found to be invalid. Your estate would then be dealt with in terms of the Intestate Succession Act of 1987. It is therefore of the utmost importance that you obtain the assistance of one of the Attorneys at Jan L Jordaan Inc. with the necessary specialised skill and knowledge to assist you with the drafting of your will.

Please contact our office on 011 748 4500 to set up an appointment with one of our Attorneys.

A will should also regularly be revised and updated to adapt to your changing circumstances.

Thinking and talking about one’s passing is not a pleasant subject.

Having a valid, clear and unambiguous will can prevent unpleasant family feuds caused by them having to make decisions about the distribution of your estate.

It is certainly worth the time and effort to have a valid written will in place.

What you need to know about estate planning

September 15, 2016 Jan L Jordaan Comments 0 Comment

The main aim of planning your estate is to ensure that as much of the accumulated wealth is utilised for your own benefit and for the benefit of your dependents on your death.

What is estate planning?

“Estate planning” has been defined as the process of creating and managing a programme that is designed to:

Preserve, increase and protect your assets during your lifetime;

Ensure the most effective and beneficial distribution thereof to succeeding generations.

It is a common misconception that it revolves solely around the making of a Last Will and Testament, or the structuring of affairs so as to reduce estate duty. Each person’s estate is unique and should be structured according to his/her own unique set of circumstances, goals and objectives.

What is liquidity?

The lack of liquidity on the date of death may cause for the deceased’s family members and dependents to suffer hardship, as certain assets might be sold by the executor to generate the cash needed.

Liquidity means that there should be enough cash funds to provide for:

Paying estate duty;

Settling estate liabilities and administration costs;

Providing for other taxation liabilities that may arise at death, such as capital gains tax.

Technically the estate is frozen until such time as the Master of the High Court has issued Letters of Executorship.

Having no will…

If you die without executing a valid Last Will and Testament, your estate will be dealt with as an intestate estate, and the laws relating to intestate succession will apply. The Intestate Succession Act determines that the surviving spouse will inherit the greater of R250 000 or a child’s share. A child’s share is determined by dividing the total value of the estate by the number of the children and the surviving spouse. If the spouses were married in community of property, one half of the estate goes to the surviving spouse as a consequence of the marriage, and the other half devolves according to the rules of intestate succession. If there is no surviving spouse or dependents, the estate is divided between the parents and/or siblings. In the absence of parents or siblings, the estate is divided between the nearest blood relatives.

The executor remuneration

Executor’s remuneration is subject to VAT where the executor is registered as a vendor.

Where the value of the estate exceeds R3.5 million, estate duty will become payable on the balance in excess of R3.5 million, with the exception of the property bequeathed to a surviving spouse, which is exempt from estate duty and/or capital gains tax.

Land

Section 3 of the Subdivision of Agricultural Land Act prevents the subdivision of agricultural land, and such land being registered in undivided shares in more than one person’s name is subject to Ministerial approval.

Minor children

A minor child is a person under the age of 18 years of age. Any funds bequeathed to a minor child will be held by the Guardian’s Fund, which falls under the administration of the Master of the High Court. These funds are not freely accessible, and are usually invested at below market interest rates. It is thus advisable to provide for minors by means of a trust.

Member’s interest

The Close Corporations Act provides that, subject to the association agreement, where an heir is to inherit a member’s interest (in terms of the deceased’s Will), the consent of the remaining members (if any) must be obtained. If no consent is given within 28 days after it was requested by the executor, then the executor is forced to sell the member's interest.

Estate duty

Section 3(3)(d) of Estate Duty Act determines that where an asset is transferred to a trust during an estate planner’s lifetime, yet the estate planner, as trustee of the trust retains such power as would allow him to dispose of the trust asset(s) unilaterally for his own or his beneficiaries' benefit during his lifetime, then such asset(s) may be deemed to be property of the estate planner and included in his estate for estate duty purposes.

In community of property

Where the parties are married in community of property, the surviving spouse will have a claim for 50 percent of the value of the combined estate, thus reducing the actual value of the estate by 50 percent. 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). Only half of any assets can be bequeathed.

Life insurance

The proceeds from life insurance policies can be used to:

Generate income to maintain dependents while the estate is dealt with;

Pay estate expenses: funeral, income tax, estate administration, estate duty.

All proceeds of South African “domestic” policies taken out on the estate planner’s life, where there is no beneficiary nominated on the policy, will fall into his estate on his death.

Where a beneficiary is nominated on the policy, the proceeds will be deemed property for estate duty purposes, even though they are paid directly to the beneficiary (subject to partial exemptions based on policy premiums).

Policies which are exempted from inclusion for estate duty purposes are buy and sell, key man policies, and those policies ceded to a spouse or child in terms of an antenuptial contract.

JAN L JORDAAN INC. IS PARTICIPATING IN NATIONAL WILLS WEEK, AN INITIATIVE OF THE LAW SOCIETY OF SOUTH AFRICA.

August 30, 2016 Jan L Jordaan Comments 0 Comment

Taking the time to draft a will can leave you with the peace of mind that your assets will be distributed according to your wishes as far as possible.

Your will should reflect exactly how you want your assets to be dealt with after your death.

There are a number of legal requirements that have to be complied with for a will to be valid.

Inter alia:

The Testator/trix (the person making the will) must be 16 years and older.

A witness must be 14 years and older.

The Testator/trix must sign the will in the presence of two or more witnesses that are present at the same time.

The Testator/trix has to sign every page of the will.

If the Testator/trix sign the will by making a mark, a commissioner of oaths has to certify that he has satisfied himself as to the identity of the testator/trix and that the will so signed is the will of the Testator/trix and each page of the will is also signed.

If the will does not comply with all of these requirements it could be found to be invalid and your estate would then be dealt with in terms of the Intestate Succession Act of 1987.

Taking the time to draft a will can leave you with the peace of mind that your assets will be distributed according to your wishes as far as possible.

It is therefore of the utmost importance that you obtain the assistance of one of the Attorneys at Jan L Jordaan Inc. with the necessary specialised skill and knowledge to assist you with the drafting of your will.

DURING SEPTEMBER 2016 JAN L JORDAAN INC. WILL ATTEND TO YOUR WILL AT NO CHARGE.

The National Wills Week (in Jan L Jordaan Inc.’s case “Wills month”) is a joint initiative of the Law Society of South Africa and its six constituent members, the Black Lawyers Association, the Cape Law Society, the KwaZulu-Natal Law Society, the Law Society of the Free State, the Law Society of the Northern Provinces and the National Association of Democratic Lawyers.

Please contact our office on 011 748 4500 to set up an appointment with one of our Attorneys.

Thinking and talking about one’s passing is not a pleasant subject.

Having a valid, clear and unambiguous will can prevent unpleasant family feuds caused by them having to make decisions about the distribution of your estate.

It is certainly worth the time and effort to have a valid written will in place.

A will should also regularly be revised and updated to adapt to your changing circumstances