LOS101 2023 Notes

Identify problem, and know how to apply it

If case law similar read that and apply law according to your situation

When reading question, ask - What are we dealing with here

You must make sure you know the process and the reason for a liquidation and distribution
account.
Either requirements or core elements - what does she want - don’t write unnecessary info
Exam prep

- Know formalities of a will

- Know how intestate succession works
- Read and understand RCLSA act - person who does intestate estate devolved in terms of
Intestate Succession Act.

Do not re-write question

NB CASE LAW:

Ex parte Van Rensburg - Repudiating a benefit - MUST accept whole will as is applicable to him/
her. If repudiate any request you don’t like, you do not receive ANY benefit under the will.

How SPOUSE / survivor is now read and understood: These ONLY applicable if deceased
died on or after 27 April 1994.)

Gory v Kolver - same sex marriage - Constitutional Court - reciprocal duties to support.

(Had not yet drawn up document to recoding Gorys half share in the home. Family and Master go
HC - not heir in terms of IS Act. Constitutional court said - YES to heterosexual spouses but not
permanent life partners - BUT they could not legally marry in SA. Therefore discrimination on
grounds of sexual orientation (equality clause)- inconsistent with his rights to equity and dignity -
when they had taken reciprciol duty to support.)

COURT declared that when Sec 1(1) of IS Act read, should be read as though it included “or
partner in permeant same-sex life partnership in which taken reciprocal duties of support.
BUT wouldn’t invalidate any transfer of ownership that had already taken place.

Bhe v Magistrate, Khayelitsha - landmark case - MALE Primogeniture - Constitutional Court -

unconstitutional and and INVALID.

(Change to choice of law rules to persons living under customary law system - how rules applied
going forward.
Declared sec 1(4)(b) IS Act and Sec 23 of Black Administration Act INVALID and unconstitutional
FROM 15 Oct 2004 - IS ACT applied to all intestate estates regardless of cultural affiliation. -
CUSTOMARY law only applied if chosen by freedom of testation (a will)
UNIFIED and unbiased system of administration of estates.
AND that all new deceased estate to be administered under masters supervision.

MALE Primogeniture - legitimacy of male heirs (take into account polygamous African customary
marriages) - partly suspended by provisions of RCLSA - 20 Sep 2010.

Hassam v Jacobs - Polygymous Muslim marriage - right to intestate succession from deceased
husbands estate as a surviving SPOUSE.
 Will Formalities and requirements cases:

Van Wyk v Winter - Requirements for valid will - without requisite - animus testandi (Intention to
make a will - being core requirement) a will created by deceased is invalid ab initio (from the onset
or beginning)

Bekker v Naude - Formalities of a will - this will was INVALID.

Compliance with sec 2(3) - not drafted or executed by testator. Sec 2(3) of Wills Act - where court
can make draft or amendment valid if they are satisfied that it was intended to be their will (that
they drafted or executed it) even if not complying with all formalities .
In this case - the bank drafted it AND they didn’t execute it either. The bank sent to testator but
died before proofing or signing (executing). Court more strict on how that section is interpreted.

Q1 - MCQ - (20 marks) - 10 questions

Q2 - True and False and motivation even if true (10 marks) - substantiate answer

Q3 - Short questions (15 marks)

- de nitions / concepts
- Di erence between 2 things or 2 concepts
- Short questions on validity of will or trust
- Explain / 5 requirements for something eg: valid trust etc
- Know terminology

a. Accrual or the right to accrual - The right Co-heirs or co-legatees have to inherit the
share that their co-heir/co legatee cannot or does not wish to receive

b. Adiation - acceptance of a benefit from estate of testator or deceased, either under testate
or intestate succession. (To accept inheritance as heir under a will/or of estate) - take on
benefits and liabilities of estate. IT is implied.
No formalities - vested personal right to claim. (Exception: writing when obligation is
attached – bene ciary cannot accept a bene t and repudiates the obligation) - therefore
accept it along with the obligation (I leave it to my child but the neighbour can live in the
house - therefore addict to con rm they will follow the obligation/responsibility. Must be
accepted as a whole.

c. Amanuensis - Someone who signs the will on behalf of testator (they can’t)

d. Animus testandi - Intention of testator to make a will

e. Attestation clause - clause at end of will - declared that all parties were present and
signed in one another’s presence. May also record/show - place and date of signature

f. Beneficiary or beneficiaries - person(s) to whom testators estate is transferred. Known as

heirs when receive inheritance ( residue, portion of estate, or entire estate) and legatees
when receive legacy (specific mentioned asset).

g. Bequest - bequeathal (disposable) assets left by deceased. / bequeath = to dispose of

assets by means of will
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h. Child’s portion - calculated by dividing deceased’s estate by number of children who have
survived or pre-deceased (if have descendants of their own) - plus the number of surviving
spouses.

i. Collation or collation bonorum - in certain situations, where have received benefits

(property/money) during testators lifetime - have to collate (bring in/inbring) this benefit or
value - BEFORE they can inherit from estate, to ensure fair distribution of estate among all.

j. Compos mentis - of sound mind

k. Curator - legally appointed person to take care of interests of someone who is unable to
manage their affairs = minor or mentally ill. Curator Ad litem - appointed to assist in court
litigation. Curator bonis = appointed to administer property or an estate (when alive)

l. Descendants - Common law descendants include lineal descendants (in downwards line)
of deceased.
Customary law includes wider circle (RCLSA - 1. Intestate succession - common law, 2.
Person who was, in lifetime, accepted by deceased as own child, 3. Woman involved in
substitute (life partners) marriage or woman to woman marriage.)

m. Donatio mortis causa - donation aimed at death of the donor - that must comply with
formalities laid down for will (donation made - death bed gift or in contemplation of death)

n. Estate massing - 2 or more testators (usually 2 spouses) - mass the whole or parts of their
estates into one consolidated economic unit - for purpose of testamentary disposal - and it
becomes effective of death of FIRST dying spouse.

o. Executor - person charged with administration of the deceased’s estate - who winds up
estate - is distinguished from / different from the curator of an insolvents satire and from a
trustee or administrator of a trust.

p. Fideicommissum - For example, if a father leaves the family house to his firstborn, on
condition that they will bequeath it to their first child.
- when testator directs that a SERIES of beneficiaries will own a whole or part of an estate
or specific assets - pone after the other. First heir is fiduciary - succeeding beneficiary is
fideicommissary - if you want something to stay in the family.

q. Heir - beneficiary who inherits entire estate portion of estate or residue of estate. Bequest
is then known as inheritance.. If entire estate is left to one beneficiary - they will be SOLE
heir.

r. Inter vivos trust - trust created during lifetime of the creator (inter vivos is between the
living)

s. Joint will - where 2 or more testators set out their respective wills in the SAME document.
This is different to MUTUAL will - as parties do not necessarily appoint each other as
beneficiaries. Not always a mutual will. Common among couples married in community of
property.
t. Legacy and legatee - When testator leave specific asset to a beneficiary (like a house or
specified amount of money) - this bequest is a LEGACY. And beneficiary is the legatee - IT
is always SPECIFIC asset or sum of money.

u. Modus - or obligation - qualification assed to a gift or testamentary disposition, requiring

beneficiary to devote the property received or value thereof) in whole or partly to a specific
purpose.

v. Mortis causa trust - a testamentary trust (trust created within context of law of testate
succession. Mortis causa = in contemplation of death - SO testamentary trust created in
contemplation of death.

w. Mutual will - where 2 or more testators draw up a joint will - and confer benefits on each
other in same will. Mutual will is always a JOINT will

x. Rectification - takes place when court adds, deletes or corrects something in a will -
because the testator made a mistake when making the will - and the will does not reflect
their intention correctly. MUST be distinguished from amendment (additional, deletions,
changes done by testator).

y. Residue or residuary estate - what is left over of estate after payment of expenses, debts,
taxes, admin fees/costs, masters fees, maintenance claims and legacies have been paid
out. After everything paid or transferred - includes all bequests that have failed or lapsed.
IF FUNDS not enough to pay creditors and legatees - heirs receive nothing. IF debts
exceed funds available in residue - legacies will be proportionally reduced - AND heirs
receive nothing. LAPSING - the specific gift returns into the residuary estate of the testator
rather than the estate of the deceased beneficiary - unless a substitute legatee/beneficiary
has been named.

z. Revocation - the act by which testator cancels a will or part of a will - so it is no longer
applicable. Only way a will can be undone by a testator.

aa. Repudiation - REJECTION of a benefit - or refusal to inherit from the estate of a testator.
MUST be in writing. And attached to documents when administering the estate.

bb. Per stirpes - a stipulation that, should a beneficiary predecease the testator, the
beneficiary's share of the inheritance will go to their heirs. Line of descendants of common
ancestry. INCLUDES every descendant of deceased (beneficiary) who survives the
deceased. OR a predeceased descendant of deceased - who leaves their own
descendants.

cc. Survivor or surviving spouse - Spouse still alive after death of their spouse. Common law
= spouse refers to someone whom the deceased had a valid civil marriage. In modern SA
law, more categories qualify - Marriage concluded in lines with Marriage Act, Customary law
marriage not falling in ambit of recognition of customary marriages act, , concluded with
Hindu/Muslim law, RCLSA recognise union according to customary law (if purpose was to
 provide children for household, AND any woman married to deceased woman to provide
children for house - woman to woman marriages.

dd. Testamentary capacity - The capacity to make a will. Every person 16 + can make will
UNLESS they were mentally incapable of appreciating the nature and effect of the act. -
DISTINGUISHED between CAPACITY TO ACT

ee. Testate and Intestate succession - Succession takes place in accordance with a valid will
- TESTATE (success ex testament)
OR
Succession in terms on law of intestate succession when there is and absence of a valid
will - successio ab intestate / successio legitima

ff. Usufruct - when ownership bequeathed to one person but right to enjoy / take fruits of -
bequeathed to another. Owner (dominos) and usufructuary.

Succession can also take place in terms of a contract or agreement.

Q4 - A WILL question - testate succession (20 marks)

2 questions
She will give a will
Not draft a will but know how it looks - order of will
De nition

DEFINE Testate Succesion- Legal rules or norms that regulate the devolution of a deceased
person’s estate - Subject to the testator’s wishes as expressed in a will (freedom of testation) -
right to do with (bequest) assets as you want.

Deals with certain requirements and formalities of a valid will

What is a will?
- Unilateral and voluntary expression of one’s intention which is made in legally prescribed
manner and by which a person provides what is to happen to his estate after death
- Will includes a codicil and any other testamentary writing

Codicil = an addition or supplement that explains, modi es, or revokes a will or part of one.
Addendum/supplementary document to an existing will - adds or amends will in a certain way.
Must comply with all the formalities for drafting up a will

Testamentary writings?
Act does not de ne meaning: Court decided it means a document that describes any of the three
necessary elements of a bequest:

- The identity of the property bequeathed

- The extent of the interest bequeathed
- The identity of the bene ciary/s
Also
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 - testamentary writing must comply with same formalities as a will
TRUST
- Inter vivos trust deed should comply with testamentary formalities when testator bequests
bene ts to the trust in his will?
- The deed not regarded as part of the will
- The deed is a contract not a will
- Bequest to trust constitutes a bequest to trustee of trust in his capacity to the bene t of the
trust bene ciaries

Importance of WILL - TO Ensure e ective succession

•Testator’s ability to choose own heirs, bene ciaries and executor
•Provide for disposition of assets and e ective administration of property
•Estate planning tool
•Minor children - provision

Requirements for valid will

Formalities of a WILL - to comply with for validity

Basic Formalities:
1. Animus testandi – intention to make a wil
- free and serious intention - duress, force, mistake, fear make the will is invalid
- without the intention a will is invalid from the beginning

2. Volition – testators expression of own free will element for validity - voluntarily
- document won’t state a testator’s own free will – document does not comply
- Factors that can in uence free will – fraud, coercion, undue in uence
Factors that can in uence freedom and capacity
- Lack of free will – person did not have the intention to make a will
- Lack of capacity – reasons not able to make a will

3. Testamentary capacity

4. Comply with all the formalities of Wills Act

- Who may make a will?

Section 4 WA

“Every person of the age of sixteen year or ore may make a will unless at the time of making
the will he is mentally incapable of appreciating the nature and e ect of his act and the burden
of proof that he was mentally incapable at that time shall rest on the person alleging the
same”

Prerequisite: testamentary capacity – 16 yrs & capable appreciating the nature and
e ect
Requirements: Prescribed age 16 years – unilateral legal act and must form own volition
(free will).

Mental capabilities
Mentally capable of appreciating the nature and e ect – compos mentis (sane)

Courts identi ed factors to consider if a testator had TC at time of executing will:

General mental and physical condition
General intelligence, memory, capacity to understand legal implications
General conduct
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Incapability:
Insane, under in uence drugs/alcohol
Mental disorder

Legislators saw need: Give Court power to declare a document to be valid – Section 2(1)
formalities

Section 2(3) added in 1992

“If a court is satis ed that a document or amendment of a document drafted or executed by a

person who has died since the drafting or execution thereof, was intended to be his will or an
amendment to his will, the court shall order the Master to accept that document or that document
as amended for the purposes of the Administration of Estates, as a will, although it does not
comply with all the formalities for the execution or amendment of will referred to in subsection”

Formalities of a will

Formal validity and substantive validity

Formal validity: comply with formalities in Wills act

Substantive validity: contents must be lawful

Formalities in terms of Section 2(1)(a) of the Wills Act:

Will must be signed at end – testator/amanuensis

More than two pages, every page signed
Presence of two or more competent witnesses
Witnesses must attest and sign in presence of testator
Signs with mark / amanuensis – presence of two witnesses and commissioner of oaths

REQUIREMENT OF A WRITTEN DOCUMENT

By stipulation the will must be in writing
Oral will/ video or dvd/ email/sms – not a valid will
Reason: don’t comply with signature / witnesses Prevention of fraud
MEANING OF “SIGN” AND “SIGNATURE” AND THE CONCEPT OF A “MARK”
Sign with initials, signature or a mark
Comply with the act if signed with a mark

WHERE MUST A TESTATOR SIGN

• “end” of will
• Where is the end? A lot of controversy
• Close as reasonably possible to the concluding words – prevent fraud
• Kidwell v The Master – 9cm gap

SIGNATURE BY AN AMANUENSIS

• Amanuensis – someone who signs the will on behalf of the testator

• Presence of testator, two or more witnesses and commissioner of oaths
• Commissioner of oaths: designated o cers – satisfy with formalities

• Competent witness: any person above age of 14 who is not incompetent to give evidence
in a court
• Witness attest to signature – NOT the content
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 • Presence of testator and presence of each other
• Section 4A: witness is a bene ciary – lacks capacity to inherit
• Does not make will invalid – can approach court

MUST A WILL BE DATED OR HAVE AN ATTESTATION CLAUSE

• Final paragraphs which records and provide evidence of date, place and the signatures
• Absence does not invalidate – evidential value

CAN A WILL BE AMENDED?

• Testator is free to alter his will
• Changes can be made by codicil
• Wills Act requires compliance with formalities for an amendment:
• Additions
• Alterations
• Interlineations
• Deletions, cancellations and obliterations

Formalities of amendment :
- Testator can insert additional paragraphs
- Writing additional words between lines
- Altering words or numbers
- Drowning lines through words/numbers/paragraphs to delete them
Rules governing amendment determined on when the will being amended was executed:

Pre-execution amendment: before execution -

no formalities to be lawful because altered wording is in place when executing. BUT persecution
amendment should still be signed by
⁃ Testator and witnesses - as Act provides it will be assumed amendment was made after
execution. Cant always establish when it was made.Reputable presumption - stands as fact
unless proven otherwise - legal presumption.

Post-execution amendment: Section 2(1)(b) – after execution

Non compliance with formalities means ine ective.
⁃ Comply with formalities
⁃ New act of testation
⁃ Testator and witnesses (witnesses not need to be same as with original will) - close to
amendment sign.
⁃ If amanuensis - commissioner of oaths must certify they are satis ed with identity of testator,
amendment made by or at request of testator AND they have functioned in capacity as COO
in certifying. Must sign certi cate but not needed to sign all other pages. To avoid confusion,
do certi cation close to amendment incase of future amendments.

High Court order the Master to accept document which does not comply with formalities
• Only if satis ed that the testator intended defective executed document to be his will
• Referred to power of condonation or rescue provision
• Proof by balance of probabilities: have to comply with requirements
• Executed requirement
• Intention requirement
• Testamentary intention – each case merits

Revocation of WILL:

Revocation: cancels a will or part of a will – no long applicable

• Testator can anytime revoke his will
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 • 2 Exceptions:
- Mutual will establishes estate massing – surviving spouse accepts
- Testamentary provisions in duly registered antenuptial contract

Two essential elements for revocation:

- Intention to revoke
- Legally recognized by Act

Methods for Revocation:

Common Law recognise four methods:
⁃ Destruction of the whole will: intention to revoke
⁃ Destruction of part of will: constitutes amendment – comply with formalities
⁃ Express revocation: Revoke by new will that contains revocation clause - just creating a new
will does not auto revoke old will (need clause)
⁃ Implied revocation: execution of a later con icting will / ademption

Revival of Will:
Previously revoked or lapsed will is given legal force
⁃ Re-execution of a revoked will – complies with formalities: validly executed, incorporated by
reference in new will - referring to old will date and reviving it.
⁃ Intention of the Testator (inetended to revise will)

REVOCATION BY COURT SECTION 2A

⁃ Approach the Court – merits will be considered
⁃ Intention of testator

If Will is more than 3.5 million - pay tax on it and executors fee on that amount which.

Testamentary Capacity
Limitations in the Legislation and Common law
A provision in a Will shall not be executed if:
- it is generally unlawful –discriminating provisions
- against public policy – Casey v The Master – “bloedige handt neemt geen erfenis”
- immoral
- impossible – asset destroyed/not owner
An executor can usually inherit.

Notes
Di erent clauses in a testament / will
What clauses come in a will and requirements for that (and possibly requirements for
amendment)

CLAUSES

1 - Introduction (last will and testament of full names, id, address, marital status) - province
- know where to report - which master o ce
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 2 - Revocation of previous will - why is revocation clause important NB!! If it’s not in Will - will
have problem - the wills then MUST be considered. - codicil must also be part of revocation if
needed or it will be considered

3 - Appointment of executor / power of assumption - who can be appointed - who do you

want to deal with your estate. As a capacity where you can be held liable if something goes
wrong. Nominate a speci c person or rm. Person nominated may not sign will or disquali ed.
( Know who is disquali ed)
Power of assumption - if you nominate speci c person in rm - give assumption someone else
in rm will be able to act in place of.

4 - Exemption clause (from furnishing security - WHY?) VERY NB CLAUSE - the said
executor shall not have to furnish security to the Master of the High Court.
If you don’t have one, then they must nish security to master before issuing appointment letter -
therefore take out bond of security to value of the will (incase executor runs away or steals -
therefore security to the master - then bond used to settle) Without one - can hold up
appointment letter.

5 - Collation clause - WHY: exempting bene ciraies - if you don’t have it or mention they MUST
collate it can read either way
Therefore have to bring in any donations, and gifts - and it forms part of will and assets. And
increases amount.
OR say that not bene ciaries shall be required to collate any gifts, etc during my lifetime
If will is more than 3.5 million - pay tax on it and executors fee on that amount which.

6 - Simultaneous death clause - guardian appointment - minor child

Die within 30 days of each other

7 - Legacies / bequests - what you wish to do with your assets - absolute bequest - no
conditions and straightforward.

Legacy - speci c asset or amount that goes to a speci c person - I bequeath 1 mil to daughter
Willa.
What are rules for legacy - substitutes mentioned.
- Residue - NB I bequeath the residue to …. whatever is left after legacies - who gets that. If you
don’t deal with it, or mention, then intestate law will deal with it.

Rules on legacy
- Admeption Legacy lapse - tacit revocation - testator voluntarily alienates object of legacy in
lifetime - if it was to voluntary - bequest is not revoked. Then asset must be purchased for estate.

- If legatee dies before - they will be substituted (virtue of law) and not fail

- If legate repudiates legacy and no substitute named, legacy will fall into residue of estate

- Legatee incompetent to inherit - murdered testator - and substitution or accrual impossible - fall
to residue

- Bequeathed object destroyed - assumed testator revoked

- Testators seat insolvent - no assets to transfer as all must be paid to creditors of estate.

8 - Substitute heirs - why do we have them?

If you left to bene ciaries who can no longer inherit, if no substitute, it will be dealt with intestate
Who will be substitute
Incase of wife no capable, I leave the residue of my estate in equal shares to my 2 children - if
minors there must be testamentary trust to make sure they are looked after.

9 - Exclusion from joint estate / in community of property

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 Leave something to child - state that it won’t form part of their CoP, accrual or joint estate (now or
in future) - right of accrual is excluded - also not attached to creditor claim from spouse. To
protect bene ciaries.

10 - Attestation clause - not compulsory - better to have it with a date - so you can know which
is last will and testament which will be considered

Place for witnesses and testator to sign

NB : Interpretation of the will

- Make sure what the wishes of the testator was from the language used. Understand wishes.
- Master just looks if will is executable, did comply with will , endorsement to say they accept
this will. The master interprets it literally and does not look at who the bene ciaries are etc.
Checks the content, validity - they don’t have judicial powers to settle a dispute / disputes -
that is for the o ce or the court

- Check the validity of the will and if it has all requirements met
- Check all clauses - are they executable - is there security, an executor , etc - so you know
what to do

- Check bequeaths and is it possible to do what the testator asked you to do

- Can you comply with the clauses - are the bequeathed things still valid or around or existent
- Acting on behalf of executor who will appoint you just do what will and law allows you to do

Q5 - Intestate succession (15 Marks)

5 questions
How to apply rules 1 to rule 8
Stirpes

Person dies without leaving a valid will/partially valid will

General rule: Intestate succession takes place through blood relationships in terms of the
parentela system
(The term parentela refers to a particular parental group and its descendants)
Blood relationship = related to deceased direct line as descendants or ancestor
Collateral line = are those who do not fall under category ancestor or descendants

Basic principle: competent heir and bene ciaries = persons who are alive or conceive and later
born alive
• Only natural persons may inherit
• Extramarital, adulterine and incestuous children – illegitimacy does not a ect capacity to
inherit
• Children born as result of arti cial fertilization
• Children born of surrogacy arrangements
• Adopted children – biological children – descendant of adopted parents
• Unborn children – nasciturus ction

Intestate Succession regulated by the Act – sections determine how the deceased estate
will devolve
De nition of a spouse:

Steps to follow to answer question of how it will be distributed:

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 1. Consider the matrimonial property regime in order to determine the distributable estate
2. Which section of the Intestate Succession Act is Applicable?
3. Why?
4. What does the section stipulate?
5. Apply Section?

Remember - spouse inherits CHILDs portion of estate or 250 000 (whichever is more) - before the
rest is divided amongst others (if there is a surviving spouse) - Childs portion calculated. Estate
amount divided by number of descendants PLUS spouse/s.
EG: 2 children and 1 spouse = Estate amount divided by 3 = Childs portion.

RULE 1 (Section 1(1)(a)

Survived by spouse and no descendants (or spouses)

RULE 2 (Sec 1(1)(b)

No spouse BUT descendants (also consider representation by stirpes) - each stirp inherits (will go
to predeceased’s heirs)

RULE 3 (Sec 1(1)(c)

Spouse AND descendants - also consider stripes

RULE 4 (Sec 1(1)(d)(i)

NO spouse, NO descendants - BOTH parents

RULE 5 (Sec 1(1)(d)(ii)

ONE parent and descendants of other parent

RULE 6 (Sec 1(1)(e)(i)(aa)-(cc)

ONLY by descendants of parents
IF full blood - receive split from both sides. If half blood - only from bio parents side.

RULE 7 (Sec 1(1)(e)(ii)

Descendants of ONE parent only (remember stirpes)

RULE 8 (Sec 1(1)(f)

Further relations - closest relation inherits - like an aunt or 2 aunts.

Disquali ed or repudiate - as if was predeceased and go to next in line (or per stirpes)
BUT if heir is alive and repudiates, surviving spouse will inherit that portion.

Q6 - Trusts (10 marks) - long question

Just answer what is asked - don’t give requirements if asked for core elements only

Formalities
Requirements for valid trust (di erence between this and core elements)
Core elements
Why do we have it and what does it do for you
Can a testamentary trust be amended
No case law
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 Testamentary Trust - where ownership of property of a person, is by virtue a trust, made over or
bequethed to:
1. another person (trustee) in whole or part - to be adminateed according to provisions of the trust -
for the benefit or person/s or for achievement of objective.
OR
2. To beneficiaries - where property under control of another person (trustee) - NOT to be
administered by executor, tutor or curator.

Testamentary Trust = testator bequeaths ownership in property to either a trustee(s) - where they
own and control (administer property) OR or to trust bene ciaries (where trustee just administers
(controls) the property.

Trust is a contract - between trustee and bene ciary. Will is a bequeath

Trust - bene t is for the bene ciaries - trustees only act ion capacity where they administer trust .
Trust is not the will.
Trustee will administer- run the trust for bene t of bene ciaries. TOOL to provide to bene ciaries.

Inter vivos trust (IT number). Trust created AFTER death of somebody

CORE elements of TRUST (as per Assignment Feedback)

When a testator creates a testamentary trust, he or she wants to be certain that the trust assets
and the bene ciary's interests are su ciently protected. !

Protection is needed in the event of, for example, insolvency of the trustee, death and divorce
of a trustee, or a trustee acting in breach of trust, causing damage to the trust bene ciaries. !

In essence, the core elements of a trust are the following:

1. The duciary position of the trustee!: A breach of his or her duciary position will amount
to a breach of trust !which can result in a trustee being held personally liable!.

2. Separate estates!: The trustee (in the event of the ownership trust) holds separate
personal and trust estates!. The trustee's private creditors and the trust bene ciaries
therefore have claims against di erent estates!.

3. The principle of real subrogation!: This means that the proceeds of trust assets (if sold or
substitute assets (if something else is bought with the proceeds) will also be subject to the
trust!. Since South African law restricts this principle to lawful replacement of assets, the
unlawful replacement of assets has to be dealt with in accordance with other private law
remedies such as the doctrine of notice or principles of enrichment!.

4. Trusteeship as an o ce!: The trust possesses a public element in the sense that the
Master of the High Court supervises the administration of trusts!.

These elements, together with the possibility of the bewind trust! and the provision of
security in terms of section 6 of the Trust Property Control Act!, results in su cient
protection for the bene ciary.
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 Requirements / essentialia for creation of TRUST

• Creator must have intention

• Intention must be expressed in binding obligation - founder relinquish control
• Trust document must comply with formalities of will
• Trust property must be determined
• Trust object must be clear
• Trust object must be lawful
• Registered at Master – issue Authority Letter

SUFFICIENT PROTECTION FOR THE BENEFICIARY

• Juristic personality of a trust – lack of legal personality
• Testamentary Trust – legal institution

Parties of a trust

FOUNDER
Relinquish control
Alter Ego Trust

TRUSTEES
Appointment and authorization – Acceptance and Master
Letter of Authority – Section 6 TPCA
Duties and Powers of a trustee
Fiduciary position - duty to bene ciaries
Personal liability
Termination

BENEFICIARIES
Income and Capital
Contingent v Vested right
Rights of Bene ciaries

Amendments of Trusts
• Section 13 TPCA deals amendment of trust (Trust Property Control Act)
• General rule: Trustees and bene ciaries are not permitted to vary the provision – unless
trust deed permits
• Testator’s freedom of testation
• Trustees unilaterally amend provision – limited to administrative changes – NOT changes to
devolution of trust property or change the rights of bene ciaries

Termination Of Trust

⁃ Realisation of trust objective - eg: only valid till a certain thing has occurred or date was
speci ed (eg: until children are a certain age)
⁃ Destruction of the trust assets
⁃ Failure of the trust for some reason
⁃ Acceleration of rights to capital bene ciaries
⁃ Court order - Section 13
⁃ Sequestration of trust
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 Q7 - Administration of estates (10 marks) - long question
NOT draft liquidation / distribution accounts
BUT know process and reason for liquidation and distribution accounts and know headings

The nalisation of the liquidation and distribution account is surely one of the most important
steps in the estate administration process. This document must be drawn up by the executor and
provides a complete overview of the administration of the estate and shows exactly how each
asset and liability will be handled.

Redistribution agreement: Bene ciaries can draft an agreement between themselves to say they
want to switch their inheritance

THE MASTER'S OFFICE supervises the administration of deceased estates to ensure an orderly
winding up of the nancial a airs of the deceased, and the protection of the nancial interests of
the heirs

Process once person has died: - Master gives 6 months for L&D to be sent for approval after
executorship was issued- but long process

3 Phases:

Phase 1 :

1. Taking the instruction from family to assist- check validity (from client and check if will is valid)
2. Report the will / estate
3. Obtain all information from family - ID’s income tax numbers, docs show policies, shares, etc.
(File ready for one you leave behind where everything is, where you can nd documents)
4. Fill and submit the documents
- death notice J294
- certi ed copies all all certi cates and id’s,
- original wills
- next of kin a davit J192 (intestate)
- inventory J243 - he will compare this to liquidation and distribution account - original will go to
the master and it will be les
- list of creditors
- No will = nomination of masters representative,
- a davit that will not reported at another o ce,
- acceptance of directions J155

5. Depending on Testate / intestate - is there a will or not and how you will deal with it
6. Section 18(3) - appointment - if estate less than 250k - appoint someone not an executor to
administer estate - referred to as section 18(3) appointment) - sect 18(3) of Administration of
Estates Act = Value of estate does not exceed amount determined by Minister by notice in
Gazette - Master may dispense with appointment of executor and give directions as to manner in
which any seat shall be liquidated and distributed.

Anything above 250k is an estate.

Less than 250k makes it as cheap as possible to distribute without entire process.No executors
fee payable - and faster. No liquidation and distribution needs to be drafted.

Phase 2:

1. Received appointment - Once receive executors letter - have authority to do what you have to
2. Open bank account (executor to open account and sole control)
3. Advertise for creditors - any circulated paper and GRN gazette
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4. Letters to all creditors - to pull up accounts, send bank details to get payments into.
5. Determining value of estate - what needs to be paid to who
6. Sell property if needed (to know what is available for distribution
7. Redistribution account
8. Draft liquidation (newspaper and GRN gazette) and distribution account (have to give proof it
was in the paper)

NB: Liquidation account: state what deceased had - what are all assets and expenses
(liabilities)

- List all immovable property- and say who is going to inherit it in terms of clause in will what of
the Will, or in terms of section 1(1B) of intestate succession act.
- List Moveable assets
- And any claims in favour of the deceased estate - accounts, shares, loans owed to
deceased - Anything that helps grow value of estate.
- Each exhibit - voucher , receipt, quittance must be numbered
- Then can work out amount executor can collect as fees - law says can collect 3.5% of
estate plus vat if registered. No consultation fee. Only paid once estate is nalised.
- List all expenses - Masters fee, SARS, advertisements, funeral or hospital bills or outstanding
accounts, loans, bonds, etc. (No money = report insolvent estate - or assets and no cash - will
have to sell OR bene ciaries must pay cash short fall)
- Exempted up to 3.5 million on estate duty - duty on anything above 3.5million (tax)

Then Distribution account - this is what is left and this is how it will be distributed to the
heirs. Balance available. If testate - according to stipulations of will. Redistribution agreement
must be attached to distribution account.
To say what is going to the heirs

Phase 3:
Last Phase

1. L&D account (approved by bene ciaries and then sent to Master for approval
Once approved:
2. Advertisement of L&D (local paper and GRN Gazette) - lay in masters o ce of local court for
anyone to look at it to see if you did include their claims etc. (Time period has lapsed that it
was available)
3. Pay creditors, bene ciaries, transfer - take 3.5% executor fee.
4. Close bank account at zero
5. Proof to master - letter to say you’ve done what you needed to do
6. Discharge sent by Master - then you are no longer held liable for anything on that estate.

Headings and layout of L&D Account - regulation 5 of Administration of Estates Act

1. Heading - number of account - full details of deceased and date of death. Marital status and
details of serving spouse and masters reference number

2. Liquidation account

3. Recapitulation statement - re ect cash portion of estate - cash de cit must be met by right
method of liquidation. Cash surplus - divided among residuary heirs.
4. Distribution account
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 5. Income and expenditure account - incurred after death of testator.- deductions, fees, etc.
Balance distributed among heirs.

6. Fiduciary assets account - deicommissum during lifetime - rights re ected here and describe
duciary asset - income /expenditure shown - balance distributed. Account within and account.

7. Estate duty addendum - Calculation terming estate duty payable., Terms of Estate duty Act.

8 Certi cate - Statement by executor that account is true and proper account of the
administration of the estate.

———————

Other notes from lecturer:

Not required to discuss case law or judgments

BUT if you have to discuss court case- give the case, give the facts short and simple, legal
question, answer - what is applicable - not whole story

Maybe just what’s essential and what was the judgement

KNOW intestate law chapter very well

Requirements for valid trust

Testamentary capacity - what is the mental capacity

Chapter 6 - What is revocation, can a will be revived (what is revival) - why is there revocation -
leave out case law

Chapter 7 - Capacity to inherit - know who can inherit - who has capacity to inherit - and who
may not inherit and when someone is disquali ed from inheriting. Casey v the Master

Chapter 8 - freedom of testation - not case law - what is the chapter about

Chapter 9 - Know de nition of what is a bequeath, modus and estate mass … what it is and
when to apply it

Chp 10 - Substitution, usufruct and accrual - de nition and when you can apply it (not NB)

Chp 12 - what is collation - no discussion just know

Interpretation of wills - go though but leave out case law

Chp 14 - no question on it, but read through

Last chapter - administration of estate - know process, know what headings or what is in both a
liquidation and distribution account. No need to draft the account.
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