Categories
trust

Trust

Trust

“My wife and I are discussing providing for the creation of a testamentary trust in our will to take care of our minor children upon our untimely death. I’m worried though that if we establish a trust, it may be too rigid to deal with the changing circumstances of our children. Can the trust be changed after our death should it be necessary to do so?”

A testamentary trust or trust mortis causa is established in a will and comes into effect upon the death of the testator (founder) of the will. Such trusts are typically used to protect the interests of minors or dependants who are unable to take care of themselves. Some or all of the assets in the estate are upon the death of the testator moved to the trust which is administered by trustees on behalf of the beneficiaries. A testamentary trust often terminates at a pre-determined time or event, for example when the beneficiaries reach a certain age.

As a rule of thumb the terms of a testamentary trust cannot be amended. The Trust Property Control Act 57 of 1988 (“the Act”) does grant our Courts the power to amend a trust deed, where for example a provision brings about consequences which in the opinion of the court, the founder of a trust did not contemplate or foresee and which hampers the achievement of the object of the founder, prejudices the interest of the beneficiaries or is in conflict with the public interest.

Accordingly, in a recent High Court decision, it was found that a variation of the provisions of a testamentary trust (brought about by agreement between the trustee and the beneficiaries) was valid. Despite the fact that a trust is of testamentary origin, it does not prevent the trustees and beneficiaries from agreeing to an amendment. The court further stated that if the testamentary trust also confers on a trustee the power to decide when to terminate the trust, it also implies that the trustee has the power to amend the trust deed.

The provisions of the Act which requires a trustee to, in exercising his powers, act with the care, diligence and skill which can reasonably be expected of a person who manages the affairs of another, still applies, and should a trustee decide to amend the provisions of the trust, the trustee will need to exercise his authority in accordance with the Act.

It is therefore possible that your trust provisions may be varied after your death. We would advise to enlist the help of your estate planner to ensure that your testamentary trust provisions are appropriately wide to provide sufficient scope to the trustees to manage (and if necessary amend) the trust in changing circumstances in a manner that is acceptable to you.

Categories
Bitcoin Uncategorized

Bitcoin

Bitcoin

What happens to my Bitcoins when I die?
08 March 2018
 
“I’ve started buying Bitcoins as a form of investment. I am aware that is a virtual currency and that different rules apply to Bitcoins. But I’m know starting to wonder how I can ensure that I transfer my Bitcoins to my heirs when I die?”

Bitcoin is essentially a digital payment network where Bitcoin currency is stored and transferred. A Bitcoin is a form of digital token that you can send or receive electronically, but is does not come in set amounts like a physical currency does, and can be divided up to 8 decimal places, meaning that the smallest amount you can send is 0.00000001 Bitcoins. The value of a Bitcoin also changes in much the same way that the value of stocks change based on bidding.

Bitcoins are protected by powerful cryptography which makes it a secure way to store your wealth, but it also creates the risk that when you die, it will be out of reach for your heirs.

Bitcoins are stored in a virtual wallet which uses a string of random characters called a “public key”. The public key is visible to anyone as an address for sending and receiving the cryptocurrency. A separate “private key” however allows the owner access to the wallet’s contents. This means that when you die, your heirs may discover your Bitcoin wallet, but will be unable to gain access thereto without the private key.

The easiest way to ensure that your Bitcoins can be transferred to your heirs is to ensure that someone has a copy of the private key by writing it down, storing it on a memory drive or entrusting it with a company or a trusted financial advisor or attorney who can give it to your family after your death.

It is also a good idea to bequeath your Bitcoins formally in your will and identify who has a copy of the private key. Although it won’t form part of the physical assets of your estate to be administered, this will help ensure that there is no uncertainty as to whom you wanted to gain access to your wallet after your death.

I would suggest discussing your Bitcoin portfolio with your estate planner with a view to formally providing therefore in your will.

 
Categories
firearm licence Uncategorized

Lapsed firearm licence

Lapsed firearm licence
 

“I own a firearm which has always been validly licenced. I was out of the country for a few months with work this year and was unable to renew my licence before its expiry in June. On my return I went to the police, but they told me that because my licence was not timeously renewed it was now invalid and that my possession of the firearm is now illegal. Is this the case? Surely I have a valid excuse for not having renewed my licence?”

Renewal of firearm licences is governed by section 24 of the Firearms Control Act 60 of 2000 (“the Act”), which stipulates that the holder of a firearm licence who wishes to renew his licence must apply to the Registrar of Firearms (“the Registrar”) at least 90 days before the expiry date. In a recent High Court judgment, the constitutionality of section 24 and section 28 dealing with the termination of a firearm licence, was questioned.

It was contended in court that these sections caused confusion for firearm owners in respect of their obligations under the Act, in that if a person has not applied for renewal of his firearm licence and the 90 day period has lapsed, there is no way that he could renew or apply to renew his firearm licence and was therefore in unlawful possession of the firearm with no means to rectify the situation. Additionally, although section 28 of the Act provides for amongst others, procedures for the cancellation of a firearm licence and a declaration by the Registrar or a Court that a firearm holder is unfit to possess a licence, the section does not provide any process which ought to be followed by firearm owners whose licences have terminated due to effluxion of time, nor does it provide clarity as to how and where to surrender their firearm, should their licence be invalid due to such expiry.

Likewise, a person who has been declared unfit to possess a firearm is required to be given 30 days’ notice in writing of such declaration and intention to invalidate their firearm licence and is permitted to provide reasons why their licence should not be invalidated. There is no similar provision in the Act for a firearm licence holder whose licence has terminated due to effluxion of time, despite the fact that valid reasons could exist for the failure to renew the licence.

In the absence of proper procedures for the renewal of firearm licences, the court declared sections 24 and 28 unconstitutional and ordered that the Act be amended by Parliament within 18 months to address this aspect. In the interim the Court held that all firearms issued in terms of the Act, which are or were due to be renewed, shall be deemed to be valid. This order is at present suspended pending confirmation by the Constitutional Court on the constitutionality of the particular sections.

Against this background it means that there is a good chance that the expiry of your licence may not be valid and we would recommend that you ask your attorney for assistance with formulating the necessary correspondence to the Registrar explaining your reasons for not having renewed your licence in light of the High Court decision.

George Kleynhans

www.attorneys24.net                       www.ilaw.co.za                         

www.attorneys.web.za               www.attorney.net.za

 

 www.ilaw.africa
Categories
municipality Uncategorized

water meter

water meter
Who must prove that the water meter is not working?
16 November 2017
 
“I’ve really tried to cut down on my water consumption and over the last year it‘s been very low. However, over the past 3 months my municipal water accounts suddenly more than tripled. Knowing this cannot be right I queried my accounts with the municipality. They said the consumption was correct according to my water meter and I must pay or my water would be cut off. The only explanation I have is that the water meter is not working correctly. But whose responsibility is it to verify this?”

Our courts recently had to address a similar set of facts in the case of Euphorbia (Pty) Ltd t/a Gallagher Estates v City of Johannesburg. In this case, the applicant (Gallagher Estates) was sued by the municipality for several million rand which the municipality alleged was owed to it as a result of water and sewage charges due and payable by Gallagher Estates to the municipality. Gallagher Estate’s response was that the charges that the municipality was seeking to recover were based on a faulty water meter and accordingly that these amounts were not lawfully owing.

One of the issues before the court was whether the duty of proving that the consumer was incorrectly billed lies on the consumer or whether proving that the consumer was correctly billed lies on the municipality.

In the case it was found that Gallagher Estates was legally not allowed to remove and test the meter because the legal entitlement was reserved for the municipality. Accordingly, because the applicant was not in the possession of all the information that it needed to prove that the meter was not functioning properly due to the fact that only the municipality was legally entitled to remove and test the meter, it would be unfair in law to burden the applicant with the responsibility of proving that the meter was not functioning as it would be much easier for the municipality to prove that the meter was working than for the consumer to prove that it was not.

From this case it can be deduced that in metering disputes with a municipality it is not the consumer’s responsibility to prove that the charges billed are wrong or based on a non-functioning meter. It is rather the municipality’s responsibility to first prove that the charges are correct and based on a functioning meter. If a consumer disputes the alleged consumption and lodges a query, the burden then rests on the municipality to investigate the issue, and the meter, if necessary to confirm whether the alleged amounts billed are correct.

In your case, we would advise lodging a formal query with the municipality to investigate the meter, and should the municipality not adhere to the request to through your attorney inform the municipality of their responsibility to do so as stipulated in the above case.

Categories
land act no compensation

Expropiation of land

The ANC national conference decided its National Executive Committee (NEC) would start the process towards a constitutional amendment of Section 25, or the Constitution’s property clause, to make possible land redistribution without compensation. There is a carefully phrased and potentially crucial rider: a sustainability test to ensure such redistribution does not negatively impact on the agriculture, food security or other sectors such as financial services, which hold around 70% of commercial farmers’ debt.

This will be a painfull loss to the unfortunate owners of land.

I have empathy with the majority decision, however I had the personal experience of the most painful loss in my life being the loss of the farm Campfornis in the district of Zoutpansberg without compensation.

George Kleynhans

076 741 6666

Categories
politics resigns Zuma

Zuma resigns

ZUMA RESIGNS

I know the difference between beeeg shiiit and sweet cake of corruption and it looks like more shiiit is on its way.

Zuma will not disappoint when his proaction of protection fails, in my opinion, president Zuma can take the only way out, to compromise and resign while he can.

Let me know when it happens

George Kleynhans

LAWYA INC

076 741 6666

lawya@me.com

Categories
liquidation

Liquidation

Liquidation or business rescue – what is the difference?
09 August 2017
 

“My family company has been operating successfully for nearly 20 years. Over time I’ve also managed to get a few investors into the business. The last year however has been tough and we are struggling to make ends meet. I feel its decision time about the future of the business, but was wondering whether liquidation is the best route or must I rather look at business rescue? What is the difference between these two options?”

In difficult economic times, many companies are having to come to terms with making tough financial decisions. Filing for liquidation, has in the past been a route considered by many companies. The  Companies Act 71 of 2008 (“Companies Act”), introduced another intervention mechanism, namely business rescue, as an option to be considered by a company that is in financial distress.

In terms of the Companies Act, a company will be considered to be in financial distress, if the company is not in a position to reasonably pay all of its debts as they become due and payable within the immediately ensuing six months or it appears reasonably likely that the company will become insolvent in the immediately ensuing six months. Once it has been established that a company is in financial distress, it must then be considered whether to file for liquidation or undergo business rescue.

To make this decision, the objective of each option must be considered as well as the process to be followed by a company.

With liquidation the objective is to dispose of the assets of the company and apply the proceeds thereof to pay the creditors of the company in terms of a legal order of preference. The purpose of business rescue on the other hand is to rehabilitate the financially distressed company and to rescue it by means of a plan that will help the company to turn its financial distressed position around and trade on a solvent basis again. Liquidation and business rescue proceedings can be launched either voluntarily or by way of an application to court by creditors and affected parties.

To initiate the voluntary liquidation process a company must decide on a date for the institution of liquidation proceedings. As from this date the company will not be allowed to incur any further debt but can continue trading. Any income then derived will go into the insolvent estate, and may not be used by the company. Once the date has been selected the shareholders of the company must resolve, by special resolution, to place the company under liquidation and an accompanying court application has to be submitted to the High Court. The court will first issue a provisional liquidation order before issuing the final order and notice must be given to all creditors before the final liquidation order is granted. Once the provisional liquidation order is granted no creditor may institute any legal action against the company and any legal action instituted will be suspended. The Master of the High court will appoint a liquidator who will determine the assets of the company, hold meetings with creditors, collect outstanding debt, sell assets, pay creditors and finalise the estate, after which the matter will be closed.

To initiate business rescue proceedings voluntarily the board of the company may resolve to place the company under business rescue if the company is financially distressed and there appears to be a reasonable prospect of rescuing the company. The resolution may not be adopted by the board if liquidation proceedings have been initiated by or against the company and will have no force or effect until it has been filed with the Companies and Intellectual Property Commission (“CIPC”). The company must notify all its creditors and appoint a business rescue practitioner (“BRP”) within five days after the resolution has been adopted and filed with CIPC. During business rescue proceedings no legal action including enforcement action may be instituted against the company, except with written consent thereto by the BRP or with leave of a court. The BRP is responsible for assessing the affairs of the company, holding meetings with creditors, other affected persons and management of the company and compiling a business rescue plan which needs to be voted on and accepted by all affected persons. The business rescue plan must indicate amongst others the probable dividends creditors would have received if the company was placed under liquidation and must prove that under business rescue the company is able to generate a better monetary return for its creditors than in the event of liquidation. The plan must further set out the advantages of business rescue over liquidation. Once the business rescue plan is adopted it binds the company, creditors and holders of any securities against the company.

Business rescue compared to liquidation provides for the company’s debt to be managed and contracts restructured and reorganized in order for the company to continue to trade on a solvent basis rather than selling off all of the company’s assets and the company being shut down as in the case of liquidation. If it does happen that business rescue is unsuccessful, the BRP may apply to court to have the company liquidated. The business rescue process is therefore a last lifeline to try and turn a company around before it has to close its doors when liquidated.

In your case, your views on the potential to rescue the company and the degree of financial distress the company is in, will determine which of these proceedings are the most appropriate route (if any) to be followed. Consider enlisting the help of a legal practitioner to help discuss in more detail the pro’s and con’s of these legal options for your company.

 
Categories
eviction

lawful evictions

lawful evictions
Housing is a vital and primary need for each person. As most of us acquire accommodation by lease or through home loans or even through state housing provided by municipalities, it is important to know your rights and what the correct procedure is for lawful evictions.

With the exclusion of farm land, lawful evictions from residential premises, buildings or structures thereon, which includes any hut, shack, tent or similar structure or any other form of temporary or permanent dwelling or shelter, is governed by the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998, commonly known as the PIE Act.

Who has a right to evict?

The right to evict under the PIE Act is given to a registered owner of premises or to a person in control of the residential premises in question. Persons in control of residential premises include:

A lawful tenant
The executor administrating the estate which includes the premises
Any other agent acting on the lawful instructions of the owner
Who can be evicted?

People who can be evicted include the following people who remain in occupation of the premises:

Defaulting tenants whose lease agreements are terminated
Defaulting mortgagors whose bonds were cancelled and property sold in execution
Unlawful occupiers and squatters
Any other person who does not have the express consent of the owner or person in lawful control of the premises
What are the special considerations?

When dealing with eviction applications our courts are obliged to give special consideration to the elderly, children, people with disabilities and also households headed by women. All facts and circumstances of such persons must be highlighted to the court for the evaluation of such special considerations.

Lawful eviction procedure:

Step 1 – Eviction notice/demand

An eviction notice or demand serves to warn the occupant of the intended eviction and it usually provides the occupant 30 days to vacate the premises. It also affords parties the opportunity to negotiate settlement terms or terms and timeframes for vacating the premises. This letter may be served by the Sheriff of the Court, by hand at the premises or by registered post.

Step 2 – Court application for eviction

A court application by way of a notice of motion with a supporting affidavit, must be served by the Sheriff on the occupant and on the relevant municipality. This will set out the court appearance date and the dates when the occupant must file their opposing court papers if they intend to oppose the eviction application. The occupant must receive the court application papers at least 14 days before the court date.

Step 3 – Appearance in court for hearing of eviction application

A Court is obliged to consider all relevant facts relating to the eviction application at the appointed dated for hearing the application. Legal representatives of the parties will be afforded an opportunity to present oral and written legal arguments on behalf of each respective party. The Court will then through a Court Order, if the application is succesful, provide the occupant sufficient time to vacate which is ordinarily up to 1 month with a provision that should the occupant fail to vacate in that period, the Sheriff is authorized to remove the occupant and all belongings from the premises at the costs of the occupant.

Step 4 – Forced eviction of occupant by Sheriff

The Sheriff will first serve a copy of the Eviction Court Order on the occupants. The Sheriff will then usually be authorized to forcefully remove the occupants after the vacation date appointed by the court has lapsed. The Sheriff may also be authorized to obtain the assistance of the police where necessary and he may also be authorized to remove the belongings of the occupants including to demolish any erected structures. The Sheriff may take up to 3 weeks to execute the eviction Court Order after making necessary arrangements to evict the occupants.

Conclusion

Lawful evictions can take between 2 to 3 months to be concluded and they can become technical and even costly. A landlord, owner or a person in control who wishes to evict, and a tenant or occupant against whom eviction processes are being commenced, are in both instances advised to seek legal advice from an attorney specialising in evictions to ensure that the eviction process is lawful and carried out correctly. Following the correct lawful eviction procedure minimizes frustration, costs and potential further rental losses and avoids the need for conduct like changing locks, disconnecting utilities and even intimidating conduct, which in itself can result in legal action being taken by unlawful occupants against owners or landlords.

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consumer complaints

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