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26 Jan 2021

Life Partners – You Still Need a Will and a Cohabitation Agreement!

A recent High Court decision has been widely viewed as an important victory for the rights of unmarried opposite-sex life partners. Until now, if one such partner died intestate (without making a will), the other could not inherit on the same basis as could a married spouse. Nor could the surviving life partner claim maintenance from the deceased estate (whilst a surviving spouse can claim).

The High Court’s pronouncement that the relevant legislation was unconstitutional and invalid in this regard must still be confirmed by the Constitutional Court, but it certainly is a clear indication that our courts want to see our laws amended to protect the rights of such couples.

The life partner who will now inherit

  • An unmarried 57-year-old man died leaving substantial assets. Both the executor of his deceased estate and the Master of the High Court rejected, primarily on the basis of existing law, his surviving (female) partner’s claim to inherit from the estate.
  • She approached the High Court with her claim, and the Court found on the facts that the couple had been “partners in a permanent opposite-sex life partnership, with the same or similar characteristics as a marriage, in which they had undertaken reciprocal duties of support”.
  • The provisions of the Intestate Succession Act and the Maintenance of Surviving Spouses Act were, held the Court, unconstitutional to the extent that they excluded opposite-sex permanent life partners from their provisions.
  • The practical effect is that the surviving partner will inherit as though she was a spouse.

But, if you are in an opposite-sex life partnership –

1. You should still make a will

There’s no guarantee that the Constitutional Court will confirm the declaration of invalidity, but more importantly there are very sound reasons for everyone – married or not – to leave behind a valid and properly-drafted will.

It is quite possibly the most important document you will ever sign. Without a will, you lose your right to choose who inherits what (your spouse for example will get only a “child’s share” on intestacy), you have no say in who will be appointed as the executor of your deceased estate, and you risk exposing your surviving loved ones to the trauma and expense of family dispute and litigation.

In the context of life partners, perhaps you want your surviving partner to inherit everything, or perhaps you don’t. The only way to ensure your desired outcome is to specifically provide for it in your will.

2. You should still have a cohabitation agreement

An enduring myth in our society is that our law recognises the concept of a “common law marriage”. There is no such thing in South African law and whilst there are some limited statutory protections for life partners, if and when you part ways you could well find yourselves embroiled in a prolonged and bitter dispute. Quite possibly one of you will be left destitute after many years of “living as man and wife”.

The quick and easy solution is to enter into a cohabitation agreement, it’s the best way to safeguard both of your rights (personal as well as financial).

This article was published recently by LawDotNews. We credit the original author.

21 Jan 2021

INTEREST RATES REMAIN UNCHANGED

The Governor of the Reserve Bank Lesetja Kganyago has this afternoon announced that the repo rate will remain unchanged. This leaves the prime overdraft lending rate at 7%.

This announcement was expected and will allow our currency to remain stable at around R15 to the USD.

In addition, and more importantly, the bond rates, which are now the lowest rate in 50 years will remain at these levels.

This is good news for the property market!

Kindest regards
Miltons Matsemela Inc.

15 Jan 2021

Can I buy Immovable Property in South Africa using Cryptocurrency, like Bitcoin or Ethereum?

By now, we have all probably heard of cryptocurrencies, the most popular one, being BITCOIN. These currencies are highly volatile, not for the faint-hearted, and some are completely unregulated. People are known to have forgotten their passwords in order to gain access to their coins, and then there is no way to access them. Just last week BITCOIN shot up by 40% in value, only to come crashing down again over the weekend by 21%!

Many people have posted on Facebook that they know of people who have bought property with BITCOIN and this has given rise to an increasing number of inquiries, namely – How exactly is it possible?

Well, let’s just start by saying that we have yet to find any truth to these statements. Maybe it is being done overseas, but we have yet to learn of a transfer of immovable property in SA, where the buyer actually paid the seller, in BITCOIN or any other cryptocurrency – hereafter referred to as “CC”.

From the outset, the truth is that it is legally possible to do this. I can pay you with match sticks if we agree to this or coconuts, or even chewing gum! Doesn’t HAVE to be in Rands, physically! As long as we can attach a Rand VALUE to the property for transfer duty or VAT purposes and Capital Gains Tax, the receiver of our revenue doesn’t give a continental hoot, how you actually pay.

The question we should rather ask is whether we should even begin to entertain this notion, of paying in actual CC.

Paying someone in CC happens by transferring these cyber “coins” from one person’s “wallet” (an application on one’s cell phone or laptop) to another person’s “wallet”. And herein lies the problem. Traditionally, payment of the purchase price of immovable property (in SA), is secured, pending transfer, in one of 3 ways, and on date of transfer, the seller receives his funds: Option one: The buyer pays the funds in ZAR (SA Rands) into the transferring attorney’s trust account to be held in trust (i.e. as security) pending the transfer. Option two: The buyer instructs his bank to ring-fence the funds which are held in an account in a SA financial institution, and then to issue a bank guarantee in favour of the transferring attorney and maybe the current bondholder. Option three: The buyer has sold a property and his transferring attorney issues undertakings to pay funds to the other transferring attorney, once the buyer’s property has transferred. These are the most common ways to secure payment of the purchase price, pending transfer.

And herein lies the fundamental, and most important principle, of property transfers in SA: You want to do everything you can to ensure that when the property transfers, the seller actually gets paid! How does one do this with CC?

Well, the truth is, it is not possible. CC is not held in a bank or by a financial institution like Rands. So firstly, you cannot issue a guarantee against such funds. Secondly, you cannot transfer CC “coins” into an attorney’s trust account. And thirdly, if the buyer is a foreigner and one day wants to sell, if he/she cannot prove that the funds used to buy the property, came into SA via our forex division, then he/she will have some mountains to climb, to repatriate the funds out of SA again into a foreign bank account.

If however your seller really trusts the buyer enough, to believe, that on the day of transfer, the buyer will transfer the coins, (and believes that the buyer will still have coins of sufficient value, after the usual 2 months a transfer takes), then we suppose, it can (theoretically) be done that way. But the problem is, the payment cannot be secured.

With CC, as things stand currently, the answer is thus simple. It is possible but foolish, and ill-advised. The buyer should just sell his coins and put the funds (i.e. SA rands) into the attorney’s trust account, or any SA financial institution which can issue guarantees, and let us conveyancers do our work, the old fashioned way! At least until CCs are regulated like any other currency.

Kind Regards,
Miltons Matsemela Inc.

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