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“Let’s choose executors and talk of wills” (Shakespeare)

If you haven’t made your will yet, get it done now. Why is that so important and how should you go about it?

To answer that let’s debunk a few of the more pervasive myths and misconceptions around those questions –

1. “I’m too young to need a will”
   Of course the older you get, the greater your chance of dying from illness or disease. But conversely, the younger you are the higher your risk of sudden violent death. For example our road fatality stats (amongst the highest in the world) show that 80 percent of deaths are in the 19 to 34 year old age group. No matter your age and no matter your health status, you could die today. Or tomorrow. No one (least of all you) knows for sure.
   And so to this related myth …
2. “I’m too busy right now, it can wait”
   The more frantically busy we are (and that’s most of us in today’s world) the more tempting it is to postpone this one. It’s a hassle, you have other priorities, and besides who wants to contemplate their own mortality? But of course “Death knocks at all doors”, often without warning. And the hassle you save yourself today is just more hassle for your grieving loved ones to have to deal with tomorrow.
3. “It’s OK to die without a will”
   No it’s not. A will is the only way to ensure that your loved ones are looked after properly after you are gone. It’s the only way to control how your estate is divided and who divides it for you. Without a will you die “intestate” and the law – not you – determines who gets what. You could be inadvertently condemning your spouse to a life of trying to survive on only a “child’s share” of your estate. You have no say in who will be appointed executor of your estate, or guardian of your children, or trustee of their trust if they are under age or unable to manage their own affairs. Your childrens’ inheritances will sit in the Guardians Fund until they turn 18. If you aren’t formally married but have a life partner, he or she may end up in a bitter dispute with your family over rights of inheritance. There are no advantages to dying intestate, only disadvantages – big ones.
4. “I’m single and have no assets, so a will is pointless”
   Firstly, you will have some assets – a bank account perhaps, or a car, or monies in your employer’s pension fund, or perhaps your estate will have a claim on the Road Accident Fund. Even if you have no spouse/life partner/children to worry about, you will still leave loved ones behind – parents perhaps, or siblings. Whatever the case, someone close to you will have to be involved in winding up your estate and you should leave a will to make the process less stressful for them.
5. “My spouse already holds my Power of Attorney, that’s all he/she needs”
   Powers of attorney lapse on your death and from then on only your executor, after being formally appointed by the Master of the High Court, can deal with your estate. Any powers you may have given your heirs – for example to draw money to live on from your bank account, or to run your business, or to rent out your house – fall away when you die.
6. “It’s easy to draw a will, I can do it myself”
   There is no legal requirement for a professional to draw your will, but before you buy a template will or copy someone else’s, consider these common pitfalls –
   • Your will must comply with legal formalities to be valid. If it doesn’t pass muster for any reason, your heirs will have to make an expensive application to the High Court to have it validated.
   • Unless the terms of your will are crystal clear, you could ignite a bitter family feud over what your wishes really were, and that’s the last thing your grieving loved ones need to be dealing with in their time of distress. Our law reports are filled with cases caused by imprecision, ambiguity and vagueness, and sometimes there is just no substitute for the legal terminology and the “Latin bits” – unless you fully understand them, don’t go there alone.
   • Your marital status, marital regime and ante-nuptial contract (if you have one) need to be taken into account when drawing your will, and there are grey areas here which are best left to a professional.
   • If you have foreign assets, you may need a foreign will as well as a local one, but there’s “no one-size fits all” answer – specialised advice is essential.
   • The structure of your will, and upfront estate/tax planning, will reduce unnecessary cost and delay – another issue beyond the average layperson.
   • A last point – not strictly part of the process of drawing the will but still vitally important – is to leave your heirs with ready access to funds whilst the estate is wound up. All your bank accounts and the like are automatically frozen on death so ensure your heirs have their own bank accounts, nominate them as beneficiaries of life policies etc.
7. “I made a will years ago, that’ll do the job”
   Bad idea. Life events (marriage, divorce, birth, death etc) and a whole host of other factors (like new laws and changes in your financial and business structures) all require review. So diarise to revisit your will regularly, at least once a year.

In closing, don’t confuse this sort of “will”, which only applies after you die, with a “Living Will” (or its close cousin an “Advance Directive”), both of which only apply before you die.

We’ll discuss whether you need a Living Will or Advance Directive in next month’s news.

In several newsflashes since last year, we reported on developments surrounding the thorny issue of arrear rates accounts, and who is liable for these, after transfer of immovable property, where the local authority fails to include this in its rates clearance schedule.

By way of brief reminder, when we apply for rates clearance figures from council to effect transfer, the law states that council may only actually recover arrears going back as far as two years, and that (at least theoretically), anything older than two years remains a “charge upon the land”. This then exposed the new owner to disconnection or even legal action, to recover that said arrears, by way of publicly auctioning off the land. The new owner would then be saddled with trying to save the property from auction by paying the arrears and then trying to recover this from the former owner.

This ended up in a High Court in Gauteng several months ago, where the court ruled that this was unconstitutional and it was then referred to the Con Court for final decision.

We are pleased to share with you, that the Con Court has now confirmed that this law is indeed unconstitutional. This therefore means in simple terms, that once council issues a rates clearance certificate, council can no longer recover any arrears older than two years, as a “charge upon the land”. Council will now have to recover this from the previous owner, and will not be allowed to use the property as security for the debt.

The decision is a victory for property owners, and for the banks, as the rights of the municipalities were previously interpreted to be preferrent to the holders of mortgage bonds registered after transfer. The decision will however place an additional burden on municipalities where their accounts are in disarray, and where they are unable to produce accurate figures of amounts owing at the time of transfer before issuing a rates clearance certificate. These municipalities will now most certainly have to write off a larger portion of this historical debt.

“A verbal contract isn’t worth the paper it’s written on” (Samuel Goldwyn)

A recent High Court judgment is yet another reminder of how essential it is to comply with all necessary formalities when entering into any sort of agreement, particularly when dealing with the sale of property.

A fight over eviction and a property transfer attack

1. A property was transferred to a buyer in terms of a sale agreement in 2015.
2. The occupants of the property refused to vacate, and when the new owner applied for their eviction, they alleged that in 2007 they had verbally agreed with the original owners that, upon finalisation of several specified issues, they would enter into a formal agreement of sale to purchase the property.
3. They therefore asked not only for the eviction application to be dismissed, but also for the 2015 sale and transfer to the new owner to be set aside in order to transfer the property to their own nominated family trust.

What the Court said

• Any such verbal contract would, held the Court, be an “agreement to agree” which in our law certainly can be valid and binding, but generally only if it complies with all the formal and other requirements for validity applying to the “main” contract that they have agreed to enter into.
• The occupants’ problem was that a verbal agreement for the sale of immovable property cannot be valid, because this is one of the few classes of agreement which our law requires to be (a) in writing and (b) signed by both seller and buyer “or by their agents acting on their written authority”.
• The occupants were accordingly given 15 days to leave the property, and the original sale and transfer remain in place.

Three things to bear in mind

1. Remember that in our law you will usually be bound by what you agree to verbally; property sales are one of only a few specific exceptions to that principle.
   • But as a general rule verbal contracts are best avoided. They are a recipe for misunderstanding and dispute because people tend to hear only what they want to hear, and to then convince themselves that their memory is better than yours. Worse, a dishonest opponent will have more wriggle room to get out of your agreement. Rather have everything recorded in black and white, and signed.
2. Also tread carefully around “agree to agree” scenarios. Our case law is full of costly disputes over “letter of intent” and “let’s agree now to enter into a full contract later” cases.
3. In particular, if you are about to embark on any form of property transaction, the lesson is, as always, to seek legal help before you agree to anything. There’s usually a lot at stake when property’s involved, and many pitfalls for the unwary.