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August 01, 2018

A living, loving trust plan.

I want to protect and care for myself and my family while I am alive, and to leave what I have- and what is needed- to whom I want, the way I want, and, in addition, if I can, save legal fees, administrative and court costs, and taxes to the maximum extent legally possible.

Wills and Trusts are both estate planning documents used to pass assets on to beneficiaries at death.  However, there are distinct advantages to using a Trust over a Will.  Fully funded Living Trusts can cost significantly less than Will-planning/ Estate winding-up procedures.

Please see this article on our website and contact me if you’d like some more information. Ideally, please let me know what your concerns are and how I can address and solve them.

July 18, 2018

Contracts in restraint of trade – the law

Contracts in restraint of trade – the law

An agreement in restraint of trade is prima facie enforceable. The onus rests on the party seeking to avoid a restraint clause to prove that it is contrary to public policy.

The approach to restraints of trade is neatly summarised by Malan AJA in Reddy v Siemens Telecommunication, as follows:

·         A court must make a value judgment with two principal policy considerations in mind in determining the reasonableness of a restraint.

o   The first is that the public interest requires that parties should comply with their contractual obligations, a notion expressed by the maxim pacta servanda sunt.

o   The second is that all persons should in the interests of society be productive and be permitted to engage in trade and commerce or their professions.

·         Both considerations reflect not only common-law but also constitutional values. Contractual autonomy is part of freedom informing the constitutional value of dignity, and it is by entering into contracts that an individual takes part in economic life. In this sense freedom to contract is an integral part of the fundamental right referred to in s 22 of the Constitution that guarantees ‘[e]very citizen … the right to choose their trade, occupation or profession freely’ reflecting the closeness of the relationship between the freedom to choose a vocation and the nature of a society based on human dignity as contemplated by the Constitution.

·         In applying these two principal considerations the particular interests must be examined.

o   A restraint would be unenforceable if it prevents a party after termination of his or her employment from partaking in trade or commerce without a corresponding interest of the other party deserving of protection. Such a restraint is not in the public interest.

o   Moreover, a restraint which is reasonable as between the parties may for some other reason be contrary to the public interest. In Basson v Chilwan and others Nienaber JA identified four questions that should be asked when considering the reasonableness of a restraint:

§  Does the one party have an interest that deserves protection after termination of the agreement?

§  If so, is that interest threatened by the other party?

§  In that case, does such interest weigh qualitatively and quantitatively against the interest of the other party not to be economically inactive and unproductive?

§  Is there an aspect of public policy having nothing to do with the relationship between the parties that requires that the restraint be maintained or rejected? Where the interest of the party sought to be restrained weighs more than the interest to be protected the restraint is unreasonable and consequently unenforceable. The enquiry which is undertaken at the time of enforcement covers a wide field and includes the nature, extent and duration of the restraint and factors peculiar to the parties and their respective bargaining powers and interests.

July 09, 2018

Can I list a debtor as a bad payer with the credit bureaus?

A credit granting business client can list a business or individual, who has defaulted on payment in accordance with the National Credit Act (NCA) regulations, directly onto the several Credit Bureau Default Listing databases.

This listing will immediately appear on the person's Consumer Credit Report as adverse information under Default listings. In the case of a business, the Default listing will immediately appear on the business's Business Credit Report under Default listings.
Default listings will negatively influence the person or business's credit rating and will reflect on their credit report for a minimum of two years.
These are the steps to follow:
·         In terms of section 72 of the NCA, a creditor is obliged to give the consumer 20 business days’ notice of its intention to list any default information on a consumer’s credit report. The written notice may be contained in a written notice that is sent via registered post or in an e-mail. The onus would be on the creditor to prove that any such written notice had been duly given to the consumer. It is important to note that the aforesaid applies to “default” (aka adverse information as defined in Regulation 17 – such as a failure to pay) and would not apply to information listed under the consumer’s payment profile as such information is classified as account information which is essentially information that relates to how a consumer pays his or her account on a monthly basis.

During that 20 days period, the consumer can challenge the accuracy of the information proposed to be reported to a credit bureau or to the National Credit Register.
A creditor can list judgment information on a consumer’s credit report without being obliged to give the consumer written notice of its intention to do so.

June 26, 2018

Are you confused by or unhappy with your family trust?

Are you someone:
  •  who has had an estate plan done, but who knows or suspects that somehow it is incomplete or lacking?
  • who has purchased a boiler-plate estate plan from a living trust company rather than engaging the professional services of a specialist?
  • who has not yet begun to plan for themselves and their families but would like to do so?
If you have had an estate planning done, but are uncomfortable with that planning, our firm will enable you to review what you have done. We will show you whether or not it is in your best interests to make additions or changes in your planning, so that you can fine-tune your plan.

If you have not yet accomplished any planning, we will show you - from the very beginning - the right way to effectively and efficiently complete your estate plan.
We will assist you to implement a modern living-trust-centered estate plan, from beginning to end. We will provide you with step-by-step advice, that has helped many clients over our forty-plus years of practice experience.

We endeavour to utilize the best workable estate planning strategies and practicalities. We explain how you can formulate your estate planning goals, and how to work profitably from the beginning all the way through to the successful completion of your estate planning documentation.

We explain what estate planning is, and what you should expect to accomplish. We determine what a living trust-centered estate plan should look like, so you can clearly see a picture of your objectives.

We determine the process of precisely what you should and should not do, to make your estate planning process effective and pleasant. It encompasses professional planning secrets and empowers you.

We also advise how to take best advantage of the planning talents, of your accountant, financial planner and stock broker. We share with you those planning matters that each of your advisers is good at and enjoys accomplishing, and those tasks which he or she is not so good at and would rather delegate.

We will explain to you the legal language of your plan, and how could we actively participate in making sure that your assets would be placed safely into the protection of your living trust. We would assist you in how to determine the funding of your trust and how you and your accountants, financial advisers and stock brokers, should complete various aspects of your trust funding.

We would warn you of hidden planning dangers, while stepping you through the procedures for getting your assets into the protection of your trust. Our documentation makes your trust endure particularly following your disability or death. We share them in the hope that your estate planning efforts will succeed because of proper follow-through.

Our practice endeavours to prompt action. It gives you many options every step of the way and empowers you to make the right choices at the right time, to maximize your and your family’s emotional and financial successes. It is based on the simple philosophy that knowledge should be with action.

June 24, 2018

What happens if a usufructuary dies and she rented out the house during her lifetime?

What rights does the owner have to sell the house? What rights does the tenant enjoy?
Here’s an example of a simple usufruct:

I bequeath to my son, Joe Bloggs, my house at 67 Henry Road, Norwood, Johannesburg, and all the contents therein, subject to a life usufruct therein in favour of my wife, Jane Bloggs.

So, the will enables Jane (the usufructuary) to use the Norwood property (the usufructuary property) belonging to her son, Joe (the bare dominium owner) and to enjoy the fruits (fructus) thereof, for her lifetime.

The usufruct ends on Jane’s death, when the usufructuary property vests in Joe.
These are some of Jane’s and Joe’s rights and obligations:
·         Jane’s estate is obliged to restore the property to Joe on her death in the same condition as that in which she received it, fair wear and tear excepted;
·         Jane was responsible for the maintenance of the property, but not to improve it;
·         Jane could not mortgage the property subject to the usufruct;
·         Unless both Jane and Joe agree, the property subject to a usufruct cannot be sold by the usufructuary or by the bare dominium owner without leave of the court;
·         Unless the will provides otherwise, Jane had to pay rates and taxes;
·         If the property is subject to a mortgage bond, Jane was not responsible for payment of the interest, unless the will has so specified, or there were insufficient funds in the estate to do so;
·         Jane had the right to let the property which is subject to a usufruct and collect the rental (the fruits and profits which may be derived from the property subject to the usufruct), but the lease can only be valid for the period of the usufruct.
Accordingly, on Jane’s death, the lease comes to an end and Joe can sell the property.