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.

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.

The prescription of debt – must I pay a claim older than 3 years?

A client asked: debt collectors have been phoning and texting me to recover a claim that goes back more than three years. Do I have to pay?

In summary, if you know that the debt is older than three years, never admit anything, sign anything or pay anything. In that way, the claim against you will have lapsed and you won’t have to pay anything.

Creditors sell their Debtor’s Book to Debt Collectors, who will then try to collect the debt. Obviously, they will try to collect more than what they paid for the Debtors’ Book. So, when they call or text consumers, they will try to get them to admit that they owe the money and, preferably, get them to make a small payment. The reason for this is that any express or tacit acknowledgement of liability or payment by the debtor, interrupts the running of prescription.

Debt

The Prescription Act 68 of 1969 provides that a debt shall be extinguished by prescription after three years.

Interruption of prescription by acknowledgement of liability

(1) The running of prescription shall be interrupted by an express or tacit acknowledgement of liability by the debtor.

(2) If the running of prescription is interrupted as contemplated in subsection (1), prescription shall commence to run afresh from the day on which the interruption takes place or, if at the time of the interruption or at any time thereafter the parties postpone the due date of the debt, from the date upon which the debt again becomes due.

Judicial interruption of prescription

(1) The running of prescription shall be interrupted by the service on the debtor of any process (any document whereby legal proceedings are commenced) whereby the creditor claims payment of the debt.

(2) Unless the debtor acknowledges liability, the interruption of prescription in terms of subsection (1) shall lapse, and the running of prescription shall not be deemed to have been interrupted, if the creditor does not successfully prosecute his claim under the process in question to final judgment or if he does so prosecute his claim but abandons the judgment or the judgment is set aside.

(3) If the running of prescription is interrupted as contemplated in subsection (1) and the debtor acknowledges liability, and the creditor does not prosecute his claim to final judgment, prescription shall commence to run afresh from the day on which the debtor acknowledges liability or, if at the time when the debtor acknowledges liability or at any time thereafter the parties postpone the due date of the debt, from the day upon which the

debt again becomes due.

(4) If the running of prescription is interrupted as contemplated in subsection (1) and the creditor successfully prosecutes his claim under the process in question to final judgment and the interruption does not lapse in terms of subsection (2), prescription shall commence to run afresh on the day on which the judgment of the court becomes executable.

Contracts under the Consumer Protection Act

A client asked: “I signed a tuition agreement that requires me to give a full term’s notice. Am I bound by this?”

I answered:

As you are a “protected person” - defined in the Consumer Protection Act (CPA) as any individual or any legal entity with a turnover and an asset value of under R2 million - the notice period is not binding, and you need only give 20 business’ days’ notice (section 14 and section 51). However, this is subject to payment of a reasonable penalty  for premature cancellation.

The CPA sets out the following rights and obligations concerning contracts between suppliers and consumers:   

·         The contract must be in plain language (section 22);

·         A consumer may rescind a transaction that came about because of direct marketing, without reason or penalty. The consumer merely needs to give the supplier written notification of his or her intention to rescind the agreement, and this notification must be given within 5 business days of the transaction being concluded or, within 5 business days of the goods being delivered to the consumer. (Section 16);

·         The consumer has the right to an itemised breakdown of his or her financial obligations under the contract and to receive a copy of the contract free of charge (section 5);

·         Suppliers must not offer to supply, supply or enter into an agreement to supply goods or services at an unfair, unjust or unreasonable price or on terms that are unfair, unjust or unreasonable. Suppliers are also prohibited from marketing any goods or services in an unfair or unjust manner (section 48);

·         Consumers must be alerted to any contract term that limits the consumer’s rights. This notice or provision must be in a conspicuous manner and form that is likely to attract the attention of an ordinarily alert consumer (typically highlighted at the top of the contract or initialled by the consumer (section 49); and

·         A contract may not contain clauses that are misleading or deceptive, subjects the consumer to fraudulent conduct, directly or indirectly waives or deprives a consumer of a right entrenched in the CPA, avoids a supplier’s duty in terms of the CPA, sets aside or overrides the effect of any provision contained in the CPA,  authorizes the supplier to do anything that is unlawful in terms of the CPA or limits or exempts a supplier of goods or services from liability for any loss attributable to the supplier’s gross negligence section 51).

Ubuntu and the law

Wikipedia defines Ubuntu as a Nguni Bantu term meaning "humanity". It is often translated as "I am because we are," and "humanity towards others", but is often used in a more philosophical sense to mean "the belief in a universal bond of sharing that connects all humanity".

According to a colleague, Adv Viljoen Meijers, who researched the impact of ubuntu on the modern law, the term first appears in the Child Justice Act, whose objects are to ‘promote the spirit of ubuntu’ by fostering children’s sense of dignity and worth and reinforcing their respect for human rights and the fundamental freedom of others by holding children accountable for their actions and safeguarding the interests of victims and the community.

The Constitutional Court found that the primary application of ubuntu was in the field of political reconciliation. The court stated: ‘ubuntu is a culture which places some emphasis on communality and on the interdependence of the members of a community. It recognises a person’s status as a human being, entitled to unconditional respect, dignity, value and acceptance from the members of a community such person happens to be a part of’. By the same token, ‘the person has a corresponding duty to give the same respect, dignity, value and acceptance to each member of the community’. Ubuntu ‘carries in it the ideas of humaneness, social justice and fairness…’; ‘an instinctive capacity for and enjoyment of love towards our fellow men and women.’

In a Supreme Court of Appeal matter, dealing with a breach of contract, it was argued that the court should import a term into a lease based on ubuntu. The court refused to do so, reiterating the principle of sanctity of contract.

However, the same court, hearing a claim based on delict (in this case, child support), stated that one must have regard to constitutional values, one of such being ubuntu.

The Equality Court (in Afriforum v Malema) found that freedom of expression, particularly was is classified as hate-speech, is limited not only by the law but also by the spirit of ubuntu.

Adv Meijers concludes that ‘ubuntu will clearly shape the contractual and delictual landscape in the future.’