WHEN LIFE HAPPENS – WHO WILL LOOK AFTER YOUR AFFAIRS?

October 31, 2016 Schnetlers Leave a comment

Curatorship is the power given by authority of law, to one or more persons, to administer the property of an individual who is unable to take care of his/her own estate and affairs. Curatorship is intended to protect the person and the person’s property.

In terms of Rule 57 of the High Court Rules any person may apply to the High Court for an order declaring another person (“the patient”) to be of unsound mind and as such incapable of managing his/her affairs.

This type of High Court application is usually made by a family member of the patient. The Notice of Motion must state the grounds upon which the applicant claims locus standi, in other words, what his/her interest in the matter is and why the court should entertain the application. The court is normally requested to do three things:

To declare the patient of unsound mind and incapable of managing his/her affairs;
To appoint a curator ad litem; and
To appoint a curator bonis and/or curator personae.

Furthermore the applicant must state inter alia the following in the application:

The grounds upon which locus standi is claimed by the applicant;
Why the court has jurisdiction to hear the matter;
Information regarding the patient’s age, sex, full particulars of his/her means and general state of the patient’s physical health;
The nature and duration of the relationship and association between the applicant and the patient;
Facts and circumstances serving to show that the patient is of unsound mind and incapable of managing his/her affairs;
The names, occupations and addresses of the persons suggested as curator ad litem and curator bonis or personae.

After hearing the application the court may appoint a curator ad litem. The curator ad litem is someone who conducts a court case or court proceedings on behalf of another. The most important function of the curator ad litem is to manage the patient’s interests in court and acts on the patient’s behalf as the patient is unable to do so because of mental illness. Upon the appointment the curator ad litem must without delay interview the patient and he/she should explain the nature of the application and the appointment to the patient. The curator then draws up a report. Such report is then submitted to the registrar of the court and the Master of the High Court.

After receipt of the report by the Master, the applicant may place the matter on the court roll and request the court for an order that the patient be declared incapable of managing his/her affairs and that the suggested person be appointed as curators bonis and personae. The curator bonis must manage the estate of the patient in accordance with the court order, subject to certain directions of the Master.

Compiled by: Annerine du Plessis

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)

Schnetler’s internal news

GETTING TO KNOW OUR DIRECTOR, DAVID

October 31, 2016 Schnetlers Leave a comment

I sat down with David Artlett, our firm’s only male attorney, in order to delve a little deeper into who David is and what makes him tick.

In addition to being a conveyancer and Notary, David is one of the directors of Schnetler’s Inc. David boasts more than 4 decades of experience in the area of property law and, more particularly, in conveyancing. It is safe to say that David is somewhat of an authority in this field of law!

Here is what David had to say during our sit-down:

Where did you grow up and attend school, and thereafter university?

I am a Southern Suburbs boy, as for most of my life I lived in our family home in Newlands. I attended SACS for my entire school career, and then proceeded to study law at UCT. At the time, the Law Faculty was in Cape Town and not at the main campus.

What do you enjoy doing when you aren’t at the office?

I am a sports enthusiast – I’m a particularly keen rugby and cricket fan. I played both sports at school and at club level. When I grew too old to participate actively, I took up road running to keep myself fit. From small beginnings, I went on to complete 10 Two Oceans Marathons.

Why did you decide to become an Attorney, and thereafter, a Conveyancer and Notary?

When I left school, I had no idea what career I wished to follow. Courtesy of the tax-pages, I had a ‘gap year’ completing my compulsory military service. During the three months between matriculating and commencing my service, I worked for a Building Society (they are all now banks). As luck would have it, I was put into the legal department and had a lot of contact with the society’s lawyers, and decided that this was the career for me.

How long have you been practising in the legal world for?

I was admitted as an Attorney and Conveyancer at the beginning of 1974 – so that makes it 42 years! A year or two after my admission, I also qualified as a Notary Public.

What about your job do you enjoy the most?

I think that the word ‘practice’ is very appropriate, because that is what we are doing. You never stop learning and coming across something new or different in this game. If you think you know it all, just wait and see what tomorrow brings.

Is there any other profession that you think would have been interesting to pursue?

I could have been an Accountant as I have the required analytical mind; but what I really dream about, is being the Sports Correspondent for a major newspaper. Imagine being present at, and watching all those major cup-finals – and being paid for it! As I said, dream on.

What area of the law is your favourite and the most interesting to you?

I must say conveyancing, as most of my work is in that field. As I mentioned previously, you can never say you know it all. Something new will always pop up and keep you on your toes. That’s what keeps me going.

One thing that can be gathered from my interview with David is that if you are looking to sell a property, Schnetler’s is definitely the firm that you want to handle your transfer!

Next month I will be sitting down with Annerine du Plessis, another attorney at Schnetler’s. Be sure to read our November newsletter to find out a little about one of our adept litigators!

Compiled by: Laura Ames

Marriage

DEALING WITH MARRIAGE AND ESTATE PLANNING

September 19, 2016 Schnetlers Leave a comment

It is important to understand the legal implications of the marital property regime, especially when drafting a Last Will and Testament and also when entering into a marriage, as the regime chosen by the estate planner is going to affect his/her assets.

The most important forms of marriage are: marriage in community of property, marriage out of community of property (without accrual), and marriage out of community of property (with accrual).

Marriage in community of property

1. There is no prior contractual arrangement, apart from getting married;
2. Spouses do not have two distinct estates;
3. There is a joint estate, with each spouse having a 50% share in each and every asset in the estate (no matter in whose name it is registered);
4. Applies to assets acquired before the marriage and during the marriage;
5. Should one spouse incur debts in his own name it will automatically bind his/her spouse, who will also become liable for the debt;
6. If a sequestration takes place (in the case of insolvency), the joint estate is sequestrated.

Marriage out of community of property without the accrual system

1. An antenuptial contract (ANC) is drawn up by an attorney (who is registered as a notary), before the marriage;

2. Where there is no contract, the marriage is automatically in community of property;

3. The values of each spouse’s estate on going into the marriage are stipulated in the contract;

4. A marriage by ANC means that all property owned by spouses before the date of the marriage will remain the sole property of each spouse;

5. Each spouse controls his/her own estate exclusively without interference from the other spouse, although each has a duty to contribute to the household expenses according to his/her means;

6. To allow for assets acquired by spouses during the marriage to remain the sole property of each spouse, the accrual system must be specifically excluded in the ANC.

Marriage out of community of property with the accrual system

1. The accrual system automatically applies unless expressly excluded in the antenuptial contract;
2. The accrual system addresses the question of the growth of each spouse’s estate after the date of marriage.

ESTATE PLANNING

Donations between spouses are exempt from donations tax and estate duty.

Marriage in community of property

1. In the event of the death of one spouse, the surviving spouse will have a claim for 50% of the value of the combined estate, thus reducing the actual value of the estate by 50%. 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).

2. When drafting a Last Will and Testament, spouses married in community of property need to be aware that it is only half of any asset that he or she is able to bequeath.

3. Upon the death of one spouse, all banking accounts are frozen (even if they are in the name of one of the spouses), which could affect liquidity.

4. Donations or bequests to someone married in community of property can be made to exclude the community of property; in other words, if the donor stipulates that the donation must not fall into the joint estate, then the donee can build up a separate estate. However, returns on such separate assets will go back to the joint estate.

Marriage out of community of property without the accrual system

Each estate planner (spouse) retains possession of assets owned prior to the marriage.

Marriage out of community of property with the accrual system

A donation from one spouse to the other spouse is excluded from the calculation of each spouse’s accrual; in other words, the recipient does not include it in his growth and the donor’s accrual is automatically reduced by the donation amount.

DIVORCE

In the event of divorce, the marriage will be dissolved by court decree, which will address such aspects as child maintenance, access, guardianship and custody, spousal maintenance, the division of assets, division of pension interests and so on.

COHABITATION AND DEFINITION OF “SPOUSE”

Cohabitation is defined as a stable, monogamous relationship where a couple who do not wish to or cannot get married, live together as spouses. The Taxation Laws Amendment Act has extended the definition of “spouses” to include “a same sex or heterosexual union which the Commissioner is satisfied is intended to be permanent”.

Many pieces of legislation, including the Pension Funds Amendment Act and the Taxation Laws Amendment Act, now define spouse to include a partner in a cohabitative relationship, the effects of which are that cohabitees will benefit from the Section 4(q) estate duty deduction in the Estate Duty Act, and the donations tax exemptions of the Income Tax Act.

Schnetler’s internal news

AN INTERVIEW WITH OUR BELOVED DIRECTOR, BELINDA

September 19, 2016 Schnetlers Leave a comment

For this month’s newsletter article I decided to corner one of our firm’s directors during her busy schedule, to ask her a couple of questions.

Belinda Scholtz is not only a director at Schnetler’s Incorporated, but is also a conveyancing expert and notary. Here is what Belinda had to say during our interview.

Belinda, tell our readers a bit more about yourself – where did you grow up?

I grew up in Sea Point and attended Kings Road Junior & Ellerslie Girls High Schools. I have a passion for the sea, swimming, beaches, walking on the promenade and am a member of the Royal Cape Yacht Club. I enjoy going to the ballet and theatre and am an avid reader. I love to travel and have been to exotic places like China, Hong Kong, Egypt, Morocco, Europe and Vietnam is my next destination. I love animals and have been to Namibia and to the Kruger National Park. I also do ceramics in my spare time.

Why did you decide to become a lawyer?

While in matric my first choice was to be an air hostess as the thought of travel appealed to me. However, my guidance teacher persuaded me not to become a “glorified waitress”. I worked as a conveyancing secretary for 10 years before deciding to study law part-time through Unisa. I decided to become a lawyer as I found law fascinating and very interesting.

Except for being a Director at Schnetler’s, you are also a very busy lady doing Conveyancing. What about Conveyancing do you enjoy most?

Purchasing a property is usually the largest investment that a person will make during their lifetime and I enjoy assisting both buyers and sellers in an endeavour to make the process as smooth and stress-free as possible. I endeavour to provide an excellent service to our clients.

What would you say is the biggest challenge in your working environment?

The sourcing of new clients and working in a very competitive milieu.

If you could choose all over again, would you change anything about your chosen career path?

I would have loved to become a chef. I am currently doing a cooking course at Giggling Gourmet and thoroughly enjoying it.

What advice do you have for young attorneys?

To be dedicated in their chosen field within the law and to be passionate about their job

Look out for my next article when I will be conducting an interview with our male director, Dave Artlett – one of the few thorns amongst the roses at our firm! Until next time.

Compiled by: Annerine du Plessis

Tax, Uncategorized, Wills and Esates

INHERITANCES AND TAX

September 19, 2016 Schnetlers Leave a comment

IS TAX IMPOSED ON SUMS OF MONEY WHICH HAVE BEEN INHERITED?

Any asset which is attained by an heir to a deceased estate is termed as a ‘capital receipt’ and is not included in the heir’s gross income. Thus, tax is not payable by an heir who receives an inheritance from a deceased estate. Further, an heir to a deceased estate is not liable for payment of Capital Gains Tax (CGT). Any CGT which would be due by the estate is payable before the inheritance is transferred to the beneficiaries. As mentioned above, an asset does not give rise to a capital gain at the time of its inheritance – any capital gain or loss is only worked out once the asset is ultimately sold or disposed of in any other manner.

WHAT IS ESTATE DUTY?

During a person’s lifetime, all one’s income is taxable, that is, up until one’s date of death. After a person’s death, a new taxable entity is formed, which is called an “estate”. Every death must be reported to SARS, even if the estate is not liable for the payment of ‘Estate Duty’.

The estate of a deceased individual is subject to an amount of 20% Estate Duty. This percentage is only imposed once a deduction of R3.5 million against the net value of the estate has been taken into account. To illustrate this, see the worked example below:

Net value of estate: R4 million
Estate duty only dutiable on the amount exceeding: R3.5 million
Amount exceeding R3.5 million: R500 000.00
20% of R500 000.00: R100 000.00

Thus, the executor of the estate will be responsible for paying the amount of R100 000.00 to South African Revenue Service (SARS) in Estate Duty.

Estate Duty is due to SARS within one year of date of death, or 30 days from date of assessment if assessment is issued within one year of date of death. Currently, interest is charged at 6% p.a. on late payments.

Compiled by: Laura Ames

Wills & Testaments, Wills and Esates

YOUR WILL – AN IMPORTANT DOCUMENT

September 19, 2016 Schnetlers Leave a comment

Life is unpredictable, therefore we advise our clients to lose no time in drawing up their will and planning their estate. Below are important reasons why this should be one of your top priorities.

Q: Why should I have a will?

A: A will enables you to name your heirs. Should you die without a will (intestate) your assets will be divided according to the Intestate Succession Act. That may advantage people whom you did not wish to name as heirs.

Q: Who is allowed to sign your will as witness?

A: Your will must be signed in the presence of two witnesses, who also sign in each other’s presence. Only persons older than 14 years are qualified to sign as witnesses.

Q: What is the cost of Executor’s fees?

A:The maximum remuneration payable to an Executor is determined by law and is currently fixed at 3.5% of the total gross estate value. Executor’s fees should, however, be negotiated with the person who has been appointed as Executor of your will.

Q: How often should I revise my will?

A: It is recommended that wills be revised at least every 2 years. It is also important to review your will after events like marriage, birth, divorce or the purchase of property.

Credit law

CAN I REINSTATE A CREDIT AGREEMENT?

August 29, 2016 Schnetlers Leave a comment

If you default on a credit agreement and action is taken against you by the credit provider, you still have time, according to the National Credit Act (NCA)[1], to reinstate the credit agreement until the goods have been sold in execution. This is also the case of Firstrand Bank Limited v Nomsa Nkata[2]

Redemption

Prior to the NCA coming into force, the position regarding the right of a consumer to re-instate a credit agreement was determined by the principle of redemption in common law. According to this principle, a consumer would be able to reinstate the credit agreement by paying the credit provider the full amount of the debt, together with ‘default charges’ and reasonable costs of enforcing the agreement. According to the NCA, ownership and possession of an item or premises can be redeemed by paying only the amount overdue at that date, together with charges and costs.

The issue, however, is at which point it becomes too late to pay the amount overdue in the execution process. This issue was addressed in the case of FirstRand Bank Limited v Nomsa Nkata.[3] Section 129(3) and (4) of the NCA states:

“(3) Subject to subsection (4), a consumer may –

(a) at any time before the credit provider has cancelled the agreement reinstate a credit agreement that is in default by paying to the credit provider all amounts that are overdue, together with the credit provider’s permitted default charges and reasonable costs of enforcing the agreement up to the time of reinstatement; and –

(b) after complying with paragraph (a), may resume possession of any property that had been repossessed by the credit provider pursuant to an attachment order.

(4) A consumer may not re-instate a credit agreement after–

(a) The sale of any property pursuant to –

(i) an attachment order; or

(ii) surrender of property in terms of section 127;

(b) The execution of any other court order enforcing that agreement; or

The Court’s judgement

The Supreme Court of Appeal found in the FirstRand Bank Limited case that in terms of both the common law as well as the NCA, “the Rubicon has been, and remains the sale in execution.” This means that at any point up until the time of the sale in execution, the consumer can put a halt to the execution proceedings and reinstate the agreement by paying the amount overdue, together with charges and costs.

The reasons…

The reason that the above provision was placed in the NCA was to make provision for the fact that many consumers borrow money over an extended period in order to finance the acquisition of large purchases such as a home or a motor vehicle. It was also noted in the above judgment that less affluent citizens may make use of extended credit to purchase household items and appliances. Therefore, the NCA assists consumers in providing them with the option of paying the overdue amount rather than having to pay the entire amount of the debt.

Conclusion

The Court established in the FirstRand Bank Limited case that Section 129(4) (b) can only be used before the sale has taken place and not thereafter. Once the sale has taken place the credit agreement cannot be re-instated between the consumer and the credit provider.

Should you find yourself in the temporary position of not being able to pay the monthly instalments of your credit agreement but are able to pay those instalments at a later stage, and not wanting to cancel the credit agreement, then it is imperative that you pay the money which is overdue to the Credit Provider prior to any sale in execution as you will not be able to reinstate the agreement thereafter.

References:

National Credit Act, 34 of 2005

Firstrand Bank Limited v Nomsa Nkata, (213/14) [2015] ZASCA 44 (26 March 2015)

[1] 34 of 2005

[2] (213/14) [2015] ZASCA 44(26 March 2015)

[3] (213/14) [2015] ZASCA 44(26 March 2015)

Property

WHO IS LIABLE FOR THE DAMAGES IN A CAR ACCIDENT?

August 29, 2016 Schnetlers Leave a comment

What will happen to my vehicle after I have been involved in a motor vehicle accident and who will be responsible for the damages? Over and above the emotional and economical tension it causes a person and his/her family, there will always be legal principles that apply.

What does the law say?

The most prominent legal field that will apply when a person is involved in a motor vehicle accident is the law of delict. The law of delict will play an important role in determining who will be liable for the damages, if any. If the damages were caused due to the intentional or negligent conduct or omission of somebody else (the third party), the third party would be liable for the damages the car owner suffered. The third party is, however, not without a few defences, but that falls outside the scope of this article.

Litigation

An important legal doctrine to be observed in litigation is the doctrine of subrogation as it applies in the law of indemnity insurance. It is an accepted principle of indemnity insurance law that when an insurer fully indemnifies an insured party in the case of loss caused by a third party, the insurer has a claim against the third party in the name of the insured. The policy behind this doctrine is to prevent the insured party from receiving double compensation from both the insurer and the third party.

Insurance claims

From a procedural point of view, the insurer obtains the right to institute legal proceedings against the third party in the name of the insured party if the insured party still has an unsatisfied claim against the third party. This principle allows the insurer to become dominus litis (master in the proceeding), but only in name and on behalf of the insured party. The insurer becomes entitled to conduct the proceedings in the name of the insured party, provided that the insurer has fully indemnified the insured party and has also indemnified the insured party against the risk of legal costs which may arise from the proceedings. The insurer has no independent claim against the third party, but simply enforces the claim of the insured party for the insurer’s own benefit.

Conclusion

In summary, the car owner will be able to hold the third party liable irrespective if he/she has insurance or not. If the car owner has insurance they will be able to claim the damages from the insurance. If he/she does, the insurance will be able to recover the loss in the name of the insurer from the third party. The relationship between the insured and the insurance is a contractual relationship and if any party fails to perform in accordance with the agreement, that party will be liable for breach of contract.

Charity

SCHNETLER’S MAKING A DIFFERENCE ON MANDELA DAY

August 29, 2016 Schnetlers Leave a comment

Mandela Day is an annual international day in honour of Nelson Mandela. This day is celebrated each year on 18 July, Mandela’s birthday. The day was officially declared as “Mandela Day” by the United Nations in 2009.

Mandela Day is a day which is dedicated in tribute of the legacy of Nelson Mandela and his values by means of volunteering and community service. Mandela Day is a global call to action that drives the idea that each individual has the power to transform the world and the ability to make a change.

The Mandela Day campaign message is:

“Nelson Mandela has fought for social justice for 67 years. We’re asking you to start with 67 minutes.”

For 67 years, Nelson Mandela devoted his life to the service of humankind – as a Human Rights Attorney, a prisoner of conscience, an international peacemaker and as the first democratically elected president of a free South Africa.

Schnetler’s partook in Mandela Day as a firm. We believe that in order for South Africa to be a better country for every citizen, it starts with us, with the people of South Africa. Every citizen of South Africa needs to come together in order to fight for a better future for all.

We therefore chose to dedicate our 67 minutes to volunteering at an animal shelter, Fallen Angels, situated in Melkbosstrand. We when arrived, we presented our donation to the organisation, which included cat and dog food, food bowls, blankets and pillows and newspapers to line the enclosures. Thereafter we were offered a brief history of the shelter and it came to be in existence, followed by a tour of the grounds, as we listened to the sad stories of many of the dogs homed there. Some of the tales of these animals were terrible to hear, and we all wondered out loud how human beings could treat a living and innocent being in the manner that some of these animals have been treated in their pasts.

We were each permitted to choose a dog and a lead, and thereafter proceeded to take our dog on a short walk on the open land surrounding the enclosures.

We are so glad to have offered our time and attention to some of the many sweet and loving dogs at the shelter, by giving them some extra love and care.

Compiled by: Laura Ames

Marriage

FANTASTIC START TO WOMEN’S MONTH!

August 29, 2016 Schnetlers Leave a comment

High Court victory for women in polygamous marriages.

At the beginning of August a section of the law dealing with the recognition of customary marriages has been ruled by the Limpopo High Court as being unconstitutional.

Joseph Netshituka was in a civil law marriage with Joyce Netshituka and in customary marriages with three other women. All of the three customary marriages were entered into before 1998, which means that according to the Recognition of Customary Marriages Act 120 of 1998 (“the Act”), polygamous customary marriages entered into prior to 1998 are not considered to be that of in community of property. Therefore, land that Joseph acquired in Limpopo in 1991 was only in his and Joyce’s names as they were married in community of property according to civil law. This particular piece of land was sold in 1999, but Joseph re-acquired it in 2002.

The children of three of Joseph’s customary wives, who passed away, argued in the Limpopo High Court that it was unconstitutional to not recognise the customary marriages as being in community of property because they were entered into prior to 1998. Their parents were married before the legislation where their mothers had no right to their husband’s property. This therefore left the children in the cold, as only their siblings whose mother was married in terms of civil law, were allowed to inherit.

Acting Judge A Lamminga referred to these as “old” polygamous customary marriages and further said that wives who entered into these “old” marriages had no claim to their husband’s assets, including property, which were acquired during the marriage. It was argued in Court that women who are affected by the now invalid provisions are mostly poor, older and live in the rural areas of our country. Neither these women, nor their children may inherit anything after the death of their husbands. Acting Judge Lamminga further remarked that women who entered into the “old” marriages were still being excluded from benefiting from their husband’s property – this left the women and their children particularly vulnerable. The Judge said that this discriminating provision should not be allowed to remain on South Africa’s statute books.

The High Court heard the argument of the children and agreed with them that Section 7(1) of the Act “discriminates unjustifiably against women in polygamous customary marriages on the basis of gender, race and ethnic or social origin and is thus inconsistent with the constitution and must be declared invalid”. The Judge furthermore held that “until such time that legislation is passed to govern the proprietary consequences of customary polygamous marriages that occurred before the Act was passed, the wives who are parties to such marriages shall have joint and equal rights of management and control over and in the marital property of their husbands.” In conclusion Judge Lamminga added: “The recognition of the equal worth and capacity of all partners in customary marriages is well overdue and it should not be delayed any further.”

This ruling is a massive legal victory for women who are in polygamous customary marriages and is definitely an exciting start to Women’s Month!

Compiled by: Annerine du Plessis