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30 Nov 2023

Plan Your Estate to Protect Your Family – Two End-of-Year Questions to Ask Yourself

As the popular old song has it “It’s the most wonderful time of the year” – a time of family togetherness and celebration, and a great opportunity to think about whether you really have provided as best you can for your loved ones’ wellbeing after you are gone.

We share two particular questions you should ask yourself right now, with a discussion around how important it is to structure your estate plan so as to address the potential problem areas in question.

“It’s the most wonderful time of the year!” (Songwriters Pola & Wyle)

As the end of another year approaches, with its family celebrations and holidays, take the time to check that your estate plan really does ensure that your loved ones will be looked after when you are no longer here for them.
Here are two questions to ask yourself right now –

  1. “Is it time to review my will?”

    The heart of any estate plan is of course your will (“Last Will and Testament”) and it is essential to review it regularly. Check for the following –

    a. Changes in your financial or personal circumstances. If you have changed your circumstances in any way – perhaps you have a new spouse or life partner, perhaps you have divorced or had another child, perhaps your assets and liabilities are different now – whatever it is, you may well want to change the relevant provisions in your will.

    b. Changes in your family’s circumstances. Similarly, changes in a family member’s personal or financial circumstances could trigger a need for change.

    c. Changes in tax or other laws that might affect your estate. As in everything else in life, constant change is a feature of our legal and tax landscape – your estate plan may need to adapt accordingly.

    To update your will, ask your lawyer whether a “codicil” to your will is enough, or whether it would be better to execute a brand-new will.

  2. “Is there enough “ready cash” in my estate?”

    Something easily overlooked in the estate planning process is the need to provide your loved ones and your executor with “liquid” funds – readily-available cash or other accessible funds.

    Without that, your family is at risk in two respects –

    a. They may struggle to make ends meet while your estate is being wound up. Winding up a deceased estate is a specialised process which can take a long time. Your family needs something to live on in the interim, and although your executor has the power to advance monies to heirs in certain circumstances, first prize will always be to leave your loved ones a source of income outside of that whole process. Remember that your bank accounts and the like will be frozen as soon as the banks learn of your death.

    b. Your family could even face homelessness. That’s not an exaggeration – it’s exactly the prospect confronting a widow after a recent High Court order authorised an executor to sell the deceased’s family home. The problem was that the executor needed to have sufficient funds to pay creditors, the administration costs of the estate, the advertising, the Master’s fees and the executor’s fees – in that case, just over R206,000.

    The only way he could raise enough cash was to sell the house in the estate, because the sole heir (the deceased’s widow) had declined to make the necessary cash contribution to the estate to avoid that. The Court ordered the Master of the High Court to set the manner and conditions for the sale accordingly – the widow will have to move.

    In many estates there will be assets other than the family home that the executor can sell to raise cash, but it will always be best to avoid that – it could be your business for example, or a valuable heirloom.

    So how do you prevent that unhappy scenario?

The answer is simple – find another way to leave your family access to ready cash outside of your estate. Commonly recommended strategies include separate bank accounts controlled by family members, family trusts, life policies and living annuities with family members nominated as beneficiaries, really anything accessible directly to your family members outside the estate. Professional advice specific to your circumstances is a no-brainer here.

30 Nov 2023

Festive Season Sellers: Start Getting Your Compliance Certificates Ready

Property sale levels always surge in the Holiday Season, so it’s a good time to remind sellers (and their buyers) of the various compliance certificates that may be needed before transfer can be registered.

Sellers in particular should prepare as soon as possible to have the necessary inspections and remedial work carried out as any delays on that side can impact badly on the timing of the whole transfer. Read on for our checklist of the five compliance certificates you may need…

“If you don’t like where you are, move. You are not a tree” (Jim Rohn)

It’s that time of year again – summer sunshine, happy holidaymakers in festive mode, and an upsurge in property sales.

Whether seller or buyer, be aware of the various compliance certificates that may be required for your transfer to go through smoothly. These certificates ensure that the property is up to standard in terms of safety, health and building regulations, and can also help prevent any unexpected costs or legal issues from arising later on.

In most cases the responsibility for obtaining these certificates lies with the owner of the property, and failure to do so can result in delays in the transfer process, or even legal action. Also, if remedial work is required, this could take time and delay the whole transfer process. For these reasons, it’s a good idea to obtain the necessary clearance certificates as early as possible (just keep an eye on how long each is valid for).

So, sellers – here’s a checklist for you of the certificates of compliance you might (or might not) need –

  • Electrical: One of the key certificates required for property transfer is the Electrical Compliance Certificate. This confirms that the electrical installations (distribution boards, wiring etc) in the property meet safety standards and other requirements, and that any necessary repairs or upgrades have been carried out. It does not cover actual appliances like stoves, geysers and the like. The certificate must be issued by a registered electrical contractor, and you cannot agree with the buyer to waive this requirement.
  • Electric Fence System: Additional to and separate from the electrical certificate discussed above, this applies if you have an electric fence system installed (or modified) after 1 October 2012. It can be transferred to the buyer. Only a registered electric fence system installer can issue it. Again. It can’t be waived.
  • Gas: A Gas Compliance Certificate is only required if you have gas appliances installed and confirms that the installations meet safety standards and are in good working order. A registered professional must issue it, and again it cannot be waived.
  • Beetle Infestation: Required by banks and perhaps insurers in some (mostly coastal) areas of the country, this certificate confirms that the accessible wood of permanent structures is free of wood destroying insects. You can agree with the buyer on whether or not a certificate is necessary, and if so, who must obtain and pay for it. Usually valid for 3 to 6 months.
  • Water Installation: Currently only required by the City of Cape Town and aimed at preventing illegal water connections and stormwater ingress, this certificate confirms that the water system installations comply with the City’s byelaws. It does not confirm that the whole plumbing system is in order even though it may be referred to as a “plumbing certificate”. Only a qualified and registered plumber can issue it. Again, you cannot agree with the buyer to waive this.

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