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Clauses in wills

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Clauses in wills

  1. 1. Welcome
  2. 2. WILLS
  3. 3. PACTUM SUCCESSORIUM • Will may be revoked at any time during the Testator / Testatrix lifetime. • Any attempt to prevent Testator / Testatrix from exercising this right is invalid. • A Pactum Successorium is any agreement attempting to regulate the order of succession. • The one exception to this rule is an ante nuptial contract. • Pacta successoria in ante nuptial contracts deal with the rights of succession. May only be varied or revoked by both parties.
  4. 4. FREEDOM OF SUCCESSION • In SA law the freedom of succession is almost unfettered. • Obviously the will – Must not be illegal – Must not be against public policy – Must not be too vague or uncertain to be enforced
  5. 5. FREEDOM OF SUCCESSION There are 3 exceptions to the principle of freedom of succession; •Obligation to maintain & educate minor and needy children, •Maintain surviving spouse, •Married ANC with Accrual.
  6. 6. FREEDOM OF SUCCESSION Statutory limitations; • Immovable Property Act. Fideicommissum • The Subdivision of Agricultural Land Act 70. • The Minerals and Petroleum Resources Development Act. • The Pension Funds Act.
  7. 7. SUBSTITUTION • Substitution is when a testator appoints a second beneficiary to take the place of an original beneficiary. • The second beneficiary succeeds the first beneficiary to avoid a bequest from failing. • If the testator does not provide for substitution the bequest could lapse. • The substitute inherits under the same conditions as that would have been applicable to the original beneficiary. • There are two different types of substitution.
  8. 8. DIRECT SUBSTITUTION • With direct substitution the substitute steps into the place of the original beneficiary. In other words, one beneficiary replaces another. • The intention of the testator is that they benefit in the alternative. • There are no limits to the number of direct substitutes. • If the original beneficiary accepts the inheritance, the substitute falls away.
  9. 9. DIRECT SUBSTITUTION • Example of single substitution: I bequeath the residue of my estate to my son John provided that if my son John predeceases me such residue of my estate shall go to my daughter Joan. • Example of several direct substitutions: I bequeath my house to my son John but should my son predecease me my said house shall go to my daughter Joan and failing her to the eldest surviving son of my said son John.
  10. 10. DIRECT SUBSTITUTION • Example of Joint beneficiaries: I bequeath the residue of my estate in equal shares to my son John and my daughter Joan or failing either of them to their issue per stirpes.
  11. 11. DIRECT SUBSTITUTION BY IMPLICATION • Can arise by implication in instances of necessary implication on the occurrence of an event foreseen by the testator. • Example: Testator bequeaths his estate to his spouse and child providing for the eventuality of his child predeceasing his spouse but not visa versa. The implication could then be that the child is then the beneficiary of the estate.
  12. 12. EXAMPLE TO AVOID SUBSTITUTION BY IMPLICATION I bequeath my entire estate in equal shares (joinder verbis tantum)to my wife Joan and my son John or failing him to his issue per stirpes (direct substitution). In the event of John predeceasing my wife without leaving any issue his share shall devolve on my nephew Sean Irvine (direct substitution). In the event of my wife predeceasing my son then her share shall devolve on my son (direct substitution).
  13. 13. DIRECT SUBSTITUTION BY STATUTE • Was governed by section 24 of the General Law Amendment Act 32 of 1952. • This section provides that whenever the terms of a will of a testator (who died after 4/6/1952) entitled a predeceased child of the testator to any benefits under the will if that child had survived the testator, then the descendants of that deceased child shall be entitled per stirpes to that benefit (unless the will indicates otherwise).
  14. 14. DIRECT SUBSTITUTION BY STATUTE • Purpose of section 24 is to reverse the rule where if a testator gives a benefit to his children it is limited to the descendants of the 1st generation. • Section 24 has been repealed by section 1 of Law of Succession Amendment Act 43 of 1992 but its impact remains by the enactment of section 2C(2) of the Wills Act.
  15. 15. SUBSTITUTION – Sect 2C Surviving spouse and descendants of certain persons entitled to benefits in terms of a will •Sect 2C(1):If any descendant of a testator, excl a minor or mentally ill descendant, who, together with the surviving spouse of the testator, is entitled to a benefit in terms of a will renounces his right to receive such benefit, such benefit shall vest in the surviving spouse.
  16. 16. SUBSTITUTION – Sect 2C • Sect 2C(2): If a descendant of the testator, whether as a member of a class or otherwise, would have been entitled to a benefit in terms of the provisions of a will if he had been alive at the time of death of the testator, or had not been disqualified from inheriting, or had not after the testator’s death renounced his right to receive such a benefit, the descendants of that descendant shall, subject to 2C(1), per stirpes (per branch of the heir) be entitled to the benefit, unless the context of the will otherwise indicates.
  17. 17. SUBSTITUTION – Sect 2C(2) • Unless a beneficiary is alive at the date of death of the testator and adiates ie elects to take his bequest, the bequest to him does not take effect. • In such event the testator may, had he contemplated it, well have wanted to substitute someone else. • Because this point was so frequently overlooked legislature was introduced that where a descendant would have been entitled to a benefit had he been alive at the testators death then his descendants per stirpes will become entitled to the benefit.
  18. 18. SUBSTITUTION – Sect 2C(1) • There is a proviso though to sect 2C(2). • Where there is a bequest to any descendant of the testator and his surviving spouse then a renunciation by the descendant results in his share accruing to the surviving spouse. • There is no reservation that this result is subject to the context indicating otherwise. • If the testator wants to prevent this result he must not join his surviving spouse in the bequest to his descendants.
  19. 19. SUBSTITUTION – Sect 2C • Comparing sect 24 with section 2C(2) – the effects of the new provisions are wider. • Terms of the will should clearly express the intention of the testator to avoid attempting to determine his intention implicitly.
  20. 20. FIDEICOMMISSARY SUBSTITUTION • The intention of the testator is to appoint successive beneficiaries usually subject to the fulfillment of a suspensive condition. • In this instance one beneficiary does not replace the other but rather succeeds the other following fulfillment of the fideicommissary condition.
  21. 21. ACCRUAL- JUS ACCRESCENDI This is the right which joint beneficiaries have of receiving proportionately the benefit (inheritance) of 1 or more co-beneficiaries who would have received the inheritance but who, for some reason, did not. (Reasons could be disqualification, refusing to adiate etc). Where the right of accrual applies, the remaining beneficiaries will receive the same share of the beneficiary who fails, as they do of their own share.
  22. 22. ACCRUAL- JUS ACCRESCENDI • If the interest of the beneficiary has already vested (dies cedit) then the accrual does not operate and the benefit becomes a part of the beneficiaries estate. • The language of the will must be analysed to determine if accrual is the testators intention. • If the testator has provided for substitution then accrual cannot come into operation (ie in the alternative).
  23. 23. • If the testator intends accrual to take place he should make express provision for it in his will. • Remember, sect 2C(2) provides for descendants to succeed to a benefit even if a named beneficiary had predeceased the testator. • This will automatically occur unless the will indicates otherwise.
  24. 24. JOINDER RE TANTUM • This occurs when the testator has bequeathed the same asset to different beneficiaries without an indication of specific shares therein and the bequests do not appear in the same sentence. • In this type of joinder there is a presumption that right of accrual is applicable (unless the language of the will reflects a contrary intention).
  25. 25. JOINDER RE TANTUM • Example: I bequeath my house to my son John. (later in will) ……. I bequeath my house to my son James. The effect of this type of joinder is that if a beneficiary does not inherit then the other will receive the entire bequest ie no substitution.
  26. 26. JOINDER RE ET VERBIS • This occurs when the testator has bequeathed the same benefit to different beneficiaries, also without an indication of specific shares therein, but the bequests are incorporated in the same sentence. • Example: I bequeath my property to my son John and James.
  27. 27. JOINDER RE ET VERBIS • The presumption is also that the testator intended the right of accrual to operate (unless the terms of the will reflect otherwise). ie no substitution. • The effect is the same as the joinder re tantum. • When a bequest is made in favour of 2 or more persons with no direction as to the division, the bequest is to be divided equally amongst them. In effect the wording “in equal shares” is implied which could equate the situation with the next joinder.
  28. 28. JOINDER VERBIS TANTUM • This occurs when the testator has bequeathed the same benefit to different beneficiaries in the same sentence but in defined shares. • Example: I bequeath my property to my sons John and James in equal shares. (or 50:50 etc)
  29. 29. JOINDER VERBIS TANTUM • The presumption is that the testator did not intend the right of accrual to operate (unless the terms of the will reflect otherwise). ie substitution is applicable. • The effect is that if either John or James cannot inherit then the person benefiting will only inherit their share. He will not receive the others portion.
  30. 30. JOINDER VERBIS TANTUM • Difference between a legacy and inheritance: • In the case of a legacy the unclaimed portion will fall into the residue of the estate and in the case of an inheritance the unclaimed portion will devolve upon the laws of intestacy.
  31. 31. Contact Details Johannesburg • First Floor, Block 3, Morning View Office Park, Corner Rivonia & Alon Roads, Morningside, 2196, • Tel : 011 784 0004 • Contact: Gordon Stuart • Email: gordons@sentineltrust.co.za

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