Why the POPI Act matters
The right to privacy is enshrined in Section 14 of South Africa’s Constitution and we understand it to be a vital human right. It states: “Everyone has the right to privacy, which includes the right not to have – (a) their person or home searched; (b) their property searched; (c) their possessions seized; (d) the privacy of their communications infringed.” It’s the last part of the abovementioned list that is becoming a growing concern. All around the world more and more focus is being placed on protecting private information as countries and governments are setting new laws to ensure the safety of their citizen’s information online. In an age where information is growing at an exponential rate, no digital exchange of information can be left unprotected. For this reason, the Protection of Personal Information (POPI) Act comes into full effect from the 1st of July 2021. Non-compliance could carry hefty fines, but as with most regulatory pieces of legislation, compliance is more than just a box to tick. Let’s consider why personal information should be protected: It builds confidentiality Protection of data is very much a protection of the information that people hold as important. By capturing, storing, and processing personal information, you are essentially guaranteeing the confidentiality of your transactions with the other party. Confidentiality is built upon when you can guarantee that none other than you yourself are able to access and process the information you store. Having a secure database stored with good encryption on your servers is a good way to keep to the promise of security you give to your customers/clients. It ensures the integrity of information In a similar vein, data protection ensures that data remains accurate and integrous. Your customers/clients need to be sure that all their data is current and accurate, and that no manipulation of the data can take place. Furthermore, to ensure the integrity of information, the data needs to be frequently backed up while remaining synchronous (i.e. whenever a change is made that change must reflect in the backup in as little time as possible). Safeguards can also be put in place to ensure that no data is duplicated or stolen. It leads to trust With regard to information storage and access, trust is built when your data subjects know that their data will always be available when and where they need it. Readily available data and the ability to request changes to the data with little to no delay are ways to build trust and assure data subjects that you are handling their data ethically. At the end of the day, how you handle information is a question of ethics. What the POPI Act brings is a sense of relief in a modern age that there will be repercussions for the mismanagement of data and that there is greater regulation of data management. Soon the everyday consumer will have a lot more protection against unwanted marketing and unethical data practices — practices that have been allowed to go on for too long. For those who are still lagging behind, the time is ticking and failure to become fully POPI Act compliant could hold serious consequences. Make sure to get your matters in order before 1 July 2021. This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
Do annuities form part of the estate during a divorce?
In the case of CM v EM it was held in the Supreme Court of Appeal of South Africa (“SCA”), case number 10861/2018, that: “The value of the Respondent’s right to future annuity payments in respect of Personal Portfolio Living Annuities (“the living annuities”) from Glacier Financial Solutions (Pty) Ltd, a member of the Sanlam Group, is an asset in his estate for purposes of calculating the accrual of his estate”. Prior to the judgement, a party to a divorce held no claim in regard to the other party’s living annuities. The court, in reaching its decision, referred to the case of De Kock v Jackson and another 1999 (4) SA 346, where it was concluded that there was no logical or legal reason why both the cash component and the accrued right to the pension should not form part of the community of property existing between the parties prior to the divorce. The court’s reasoning behind the decision was that the Respondent in this matter had a clear right to the investment returns yielded by his capital reinvestment with Sanlam, in the form of future annuity income which he draws from the agreement. The court, therefore, found that such annuity income is an asset which can be calculated for purposes of determining the accrual. The brief background to the matter was the following: The parties married in December 1999, out of community of property and subject to the accrual system as defined in the Matrimonial Property Act 88 of 1984. In July 2008, the Respondent used a portion of his pension benefit, which arose from his employment, to purchase a Personal Living Portfolio Living Annuity from Glacier Financial Solutions. In March 2017, he used the remainder of the proceeds of his pension benefit to make another purchase with Glacier. In all future divorce proceedings, in the absence of an agreement between the parties, an expert will have to be appointed to determine the value of a party’s right to receive future payments in respect of the living annuities. The SCA has not provided a guideline as to how the calculation should be done and this could lead to further litigation, as currently, an annuitant may elect to drawdown at any rate between 2.5 or 17.5 per cent per annum. Should there not be a history of contested percentages drawdown over a period of time, I am of the opinion that an average percentage of plus-minus 8 per cent will be used to determine the value of future payments. Reference List: CM v EM (1086/2018) [2020] ZASCA 48. This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
Sectional titles: What is the role of the body corporate?
When it comes to sectional title schemes, there is still widespread misunderstanding of even the basics, starting with the body corporate and how it is established, as well as what its functions and powers are. This misunderstanding often gives rise to many problems and disputes in sectional title schemes which could quite easily have been avoided. What is a sectional title? A Sectional Title Development Scheme, usually referred to as a “scheme”, provides for separate ownership of a property, by individuals. These schemes fall under the control of the Sectional Titles Act, which came into effect on 1 June 1988. When you buy a property that’s part of a scheme, you own the inside of the property i.e. the space contained by the inner walls, ceilings & floors of the unit. You are entitled to paint or decorate or undertake alterations as desired, providing such alterations do not infringe on municipal by-laws. What is the body corporate? The Body Corporate is the collective name given to all the owners of units in a scheme. Units usually refers to the townhouses or flats in a development. The body corporate comes into existence as soon as the developer of the scheme transfers a unit to a new owner. This means that all registered owners of units in a scheme are members of the Body Corporate. The Body Corporate controls and runs the Scheme. Day-to-day administration of the Scheme is vested in trustees who are appointed by the Body Corporate. Major decisions regarding the Scheme are made by the Body Corporate, usually at the annual general meeting (AGM), or at a special general meeting (SGM). At these meetings, matters, which affect the Scheme, are discussed, budgets are approved, rules can be changed and trustees are appointed. Each member of a Body Corporate is entitled to vote at these meetings, providing that the member is not in arrears with levy payments or in serious breach of the rules. The Body Corporate exists to manage and administer the land and buildings in the scheme. This means, that the Body Corporate is required to enforce the legislation and rules in the Sectional Titles Act, the Management Rules and the Conduct Rules of the scheme. Amongst their other duties, the Trustees manage the Body Corporate’s funds, enforce the rules and resolve conflict to the best of their ability. References: http://www.angor.co.za/news/understanding-sectional-title-terminology-body-corporate/ http://www.sectionaltitlecentre.co.za/faqs.aspx http://www.bizcommunity.com/Article/196/568/161017.html This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
Planning your Estate as Newlyweds
For newlyweds, one of the most important tasks to attend to is estate planning. The estate planning will depend on what the couple wants and what form of marriage they are in. It is therefore important to keep the following in mind when planning the years ahead together. Marriage in community of property There is a joint estate, with each spouse having a 50 percent share in each and every asset in the estate (no matter in whose name it is registered); In the event of the death of one spouse, the surviving spouse will have a claim for 50 percent of the value of the combined estate. The estate is divided after all the debts have been settled in a deceased estate. When drafting a Last Will and Testament, spouses married in community of property need to be aware that it is only half of any asset that he or she is able to bequeath. Upon the death of one spouse, all banking accounts are frozen (even if they are in the name of one of the spouses), which could affect liquidity. Marriage out of community of property without the accrual system Each estate planner (spouse) retains possession of assets owned prior to the marriage. Each spouse’s estate is completely separated, even in the event of death. If you want your spouse to inherit something, you would need to outline this in your Will. Marriage out of community of property with the accrual system This is identical to a “marriage out of community of property” but the accrual system will be applicable. The accrual system is a formula that is used to calculate how much the larger estate must pay the smaller estate once the marriage comes to an end through death or divorce. This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. (E&OE) .col-sm-10.col-sm-offset-1.col-md-8.col-md-offset-2.text-center { margin-top: 25px; color: #f3f3f3;} h6 { display: none !important; } .col-sm-8 { width: 100%; } .bg–secondary {background-image: url(https://vzri.co.za/wp-content/uploads/2018/10/firm4.jpg); background-repeat: no-repeat; background-size: cover;} h2 { color: #f3f3f3;}
Antenuptial contracts: With or without the accrual system?
If you don’t have an ANC, you are automatically married in community of property. This means that there is one estate between a husband and a wife. Everything is shared equally between spouses, which includes debts. However, with an antenuptial contract, the estates of each spouse remain separate. The difference comes with the addition of the accrual system. What is an antenuptial contract? An ANC determines whether a marriage will be out of community of property with/without the accrual system. It must be signed by the persons entering into a marriage, two witnesses and a notary public, and it must be registered in the Deeds Registries office within the prescribed time period. What is the accrual system? The accrual system is a formula that is used to calculate how much the spouse with the larger estate must pay the smaller estate if the marriage comes to an end through death or divorce. Only property acquired during the marriage can be considered when calculating the accrual. If there is no accrual system, then the spouses have their own estates which contain property and debts acquired prior to and during the marriage – nothing is shared. The underlying philosophy of the accrual system is that each spouse is entitled to take out the asset value that he or she brought into the marriage, and then they share what they have built up together. The accrual system only applies if the marriage ends – either by divorce or death. You cannot claim your share of the joint estate while you’re still married. Whether or not you decide to include the accrual system in your antenuptial contract depends on the couple. Some may see the relevance while others do not. It’s important that both of you consult the lawyer who’s drawing up the ANC because both spouses need to be fully aware of the consequences. It’s also important to see someone who’s neutral, and who can mediate what goes into your ANC, because emotions can cloud your judgment, and it can be a stressful negotiation if one spouse has a lot of assets and the other doesn’t, for example. This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE) References: http://www.biznews.com/thought-leaders/2014/11/09/nine-things-need-know-antenuptial-contracts/ https://www.legalwise.co.za/help-yourself/quicklaw-guides/marriages/ .col-sm-10.col-sm-offset-1.col-md-8.col-md-offset-2.text-center { margin-top: 25px; color: #f3f3f3;} h6 { display: none !important; } .col-sm-8 { width: 100%; } .bg–secondary {background-image: url(https://vzri.co.za/wp-content/uploads/2018/10/firm4.jpg); background-repeat: no-repeat; background-size: cover;} h2 { color: #f3f3f3;}
Antenuptial contracts: Can I get one after marriage?
Couples who are interested in an antenuptial contract often make the decision to get one before they are married. That is the ideal scenario. However, some couples may have already gotten married in community of property, and later decide to change to another form of marriage contract. Can it be done? The Matrimonial Property Act allows a husband and wife to apply jointly to court for leave to change the matrimonial property system which applies to their marriage. According to South African law, the parties who wish to become married out of community of property must enter into an antenuptial contract prior to the marriage ceremony being concluded. If they fail to do so then they are automatically married in community of property. Of course, many people are unaware of this provision and should be able to satisfy the court that it should change their matrimonial property system if it was their express intention that they intended to be married out of community of property. What are the requirements? In order for the parties to change their matrimonial property system, the act mentions the following requirements: There must be sound reasonsfor the proposed change. The Act requires that notice of the parties’ intention to change their matrimonial property regime must be given to the Registrar of Deeds, must be published in the Government Gazette and two local newspapers at least two weeks prior to the date on which the application will be heard and must be given by certified post to all the known creditors of the spouses. The court must be satisfied that no other person will be prejudicedby the proposed change. The court must be satisfied that the rights of creditors of the parties must be preserved in the proposed contract so the application must contain sufficient information about the parties’ assets and liabilities to enable the court to ascertain whether or not there are sound reasons for the proposed change and whether or not any particular person will be prejudiced by the change. What is the downside? The downside is that the application is expensive because you and your spouse have to apply to the High Court on notice to the Registrar of Deeds and all known creditors, to be granted leave to sign a Notarial Contract having the effect of a postnuptial contract. You must also have solid grounds for wanting to switch to an antenuptial contract. Therefore, it’s not something you can do on a whim. This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE) References: The Matrimonial Property Act 88 OF 1984 .col-sm-10.col-sm-offset-1.col-md-8.col-md-offset-2.text-center { margin-top: 25px; color: #f3f3f3;} h6 { display: none !important; } .col-sm-8 { width: 100%; } .bg–secondary {background-image: url(https://vzri.co.za/wp-content/uploads/2018/10/firm4.jpg); background-repeat: no-repeat; background-size: cover;} h2 { color: #f3f3f3;}
The Basics of Estate Duty
When a person dies, they leave behind an estate which includes everything they own. Estate Duty is payable on the estate of every person who dies and whose nett estate is in excess of R3,5 million. It is charged at the rate of 20%. Currently, SARS is responsible for collecting the Estate Duty of a deceased person. How does an estate get reported to SARS? Even if Estate Duty does not apply to you, it is still necessary to inform SARS that the person is deceased. It is recommended that you consult with a legal expert when going through such as process. Copies of the following documents must be sent to SARS: Death certificate or death notice. Identity document of the deceased. Letters of Executorship (J238) (if applicable). Letter of Authority (J170) (in cases where the estate is less than R250 000). Certified copy of the executor’s identity document. Power of attorney (if applicable). The name, address and contact details of the executor or agent. The last Will and Testament of the deceased. An inventory of the deceased’s assets. The liquidation and distribution accounts (if available). These documents may be sent to the relevant Centralised Processing Centres that is closest to the Master of the High Court where the estate is being administered. How does Estate Duty work in relation to an inheritance? All income received or accrued before the deceased’s death is taxable in the hands of the deceased up until the date of death, and will be administered by the executor or administrator acting as the deceased’s representative taxpayer. After the date of death of a person, a new taxable entity comes into existence – the “estate”. The assets of the deceased will be held by the estate until the liquidation and distribution account has lain for inspection and become final under section 35(12) of the Administration of Estates Act after which the assets will be either handed over to the heirs or delivered to the trustee of a trust estate. This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE) References: http://www.sars.gov.za/TaxTypes/EstateDuty/Pages/default.aspx http://www.sars.gov.za/ClientSegments/Individuals/Tax-Stages/Pages/Tax-and-Inheritance.aspx .col-sm-10.col-sm-offset-1.col-md-8.col-md-offset-2.text-center { margin-top: 25px; color: #f3f3f3;} h6 { display: none !important; } .col-sm-8 { width: 100%; } .bg–secondary {background-image: url(https://vzri.co.za/wp-content/uploads/2018/10/firm4.jpg); background-repeat: no-repeat; background-size: cover;} h2 { color: #f3f3f3;}
How does inheritance work?
When someone dies they normally have what is called a ‘will’. The people who benefit from this ‘will’ are known as the heirs. Upon someone death, the heirs receive an ‘inheritance’. The person who administers the will of the deceased is called an ‘executor’. What legislation affects inheritances? South Africa’s inheritance laws apply to every person who owns property in South Africa. The three main statutes governing inheritances in South Africa are: The Administration of Estates Act, which regulates the disposal of the deceased’s estates in South Africa; The Wills Act, which affects all testators with property in South Africa; The Intestate Succession Act, which governs the devolution of estates for all deceased persons who have property in the Republic and who die without a will. All property located in South Africa is subject to these laws, and there are no separate laws for foreigners. Immoveable property is not treated any differently to other types of moveable assets for inheritance purposes. Inheritance issues of foreigners and South African citizens are primarily dealt with by the Master of the High Court; however, if a dispute arises, then the case can be heard in any High Court of South Africa. Foreigners who acquire immovable property in South Africa through purchase or inheritance must register their transfer of ownership by registering a deed of transfer with the Registrar of Deeds in whose area the property is situated. The process of registering a deed of transfer is carried out by a conveyancer, or specialised lawyer, who acts upon a power of attorney granted by the owner of the property. Tax and inheritance In South Africa, there is no tax payable by the heirs who get an inheritance. Capital Gains Tax (CGT) is also not payable by the recipient of an inheritance. Estate Duty and CGT, where applicable, are usually payable by the estate. If it is a foreign estate, it will be subject to the taxes of its country of origin. What about donations or gifts? Donations and gifts are treated differently to inheritance. For individuals, donations are subject to a Donations Tax of 20%, with an annual exemption of up to R100,000 of the value of all donations made during the tax year. Non-residents are not subject to Donations Tax. However, in cases where the resident donor transfers his property to a non-resident (donee), and the resident donor fails to pay the Donations Tax, the non-resident (donee) and the resident (donor) will be jointly and severally liable for the tax. Donations between spouses are exempt from Donations Tax, as are donations made to certain public benefit organisations. This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE) Reference The South African Revenue Service (SARS) .col-sm-10.col-sm-offset-1.col-md-8.col-md-offset-2.text-center { margin-top: 25px; color: #f3f3f3;} h6 { display: none !important; } .col-sm-8 { width: 100%; } .bg–secondary {background-image: url(https://vzri.co.za/wp-content/uploads/2018/10/firm4.jpg); background-repeat: no-repeat; background-size: cover;} h2 { color: #f3f3f3;}
Title deeds when buying or selling property
If you’re planning to buy a new property, you’ll need to get the title deed transferred into your name to prove that you’re the owner of the property. You’ll need the assistance of a lawyer specialising in property transfers (also known as a conveyancer) to help you transfer the title deed into your name. You’ll only become the owner of the property when the Registrar of Deeds signs the transfer. After it’s been signed, a copy of the title deed is kept at the Deeds Office closest to you. How long does it take? A search may take 30 to 60 minutes. In some of the larger offices, the copy of a deed is posted or it must be collected after a certain period of time. To obtain a copy of a deed or document from a deeds registry, you must: Go to any deeds office (deeds registries may not give out information acting on a letter or a telephone call). Go to the information desk, where an official will help you complete a prescribed form and explain the procedure. Request a data typist to do a search on the property, pay the required fee at the cashier’s office and take the receipt back to the official at the information desk. The receipt number will be allocated to your copy of title. Fortunately, a conveyancer will help you with the process so that you don’t have to worry about all the paperwork yourself. You should contact your legal advisor to find out more. This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE) Reference: Western Cape Government, Title Deeds: Proof of Property Ownership, https://www.westerncape.gov.za The Department of Rural Development and Land Reform, http://www.dla.gov.za/ .col-sm-10.col-sm-offset-1.col-md-8.col-md-offset-2.text-center { margin-top: 25px; color: #f3f3f3;} h6 { display: none !important; } .col-sm-8 { width: 100%; } .bg–secondary {background-image: url(https://vzri.co.za/wp-content/uploads/2018/10/firm4.jpg); background-repeat: no-repeat; background-size: cover;} h2 { color: #f3f3f3;}
Managing disputes over a deceased relative’s estate
Managing disputes over a deceased relative’s estate If someone leaves a sizeable estate behind, it may cause conflict among the possible heirs. The help of an attorney, when settling an estate after a death, can avoid unnecessary troubles. The Administration of Estates Act, 1965, determines what must happen with an estate after a person’s death. There are certain steps that should be taken to ensure the process is legal. However, if the estate is worth a lot of money or the deceased has children, then it is a good idea to seek the assistance of an attorney, as family disputes and debts of the deceased can be confusing. In order to do this an executor will be appointed to act on behalf of the estate. Finding the will of a deceased relative If the deceased person left a will the first thing to do is find it. If they did not tell you beforehand where their will was, you can try calling the probate court in their district or the office of the Master of the High Court to check if they have a copy of the will. Other places to call would be the deceased’s life insurance company, bank or lawyer. Otherwise, the deceased might have left a copy of it somewhere secure in their home. Who is the executor? An executor is the person appointed to handle the process of settling the estate. The executor will either be mentioned in the will of the deceased or appointed by the Master of the High Court. The Master will ultimately decide who will take the role of executor. If the chosen executor doesn’t know how to handle the estate or is unfamiliar with the legal procedure, he or she can go to a lawyer for help. Once the executor has been chosen, the Master will give them “Letters of Executorship”, which will give only them the authority to handle the estate. What does the executor need to do? The executor has several responsibilities such as arranging the valuation of the estate’s property and assets. They will also be responsible for contacting and dealing with all the beneficiaries. Some other responsibilities of the executor include: Arranging provisional payments for the family’s immediate needs. Opening a bank account for the estate and depositing the estates money in it. Paying all the necessary estate duties. It’s important that any person who wants to act on behalf of the deceased person’s estate have the Letters of Executorship. If not, their actions would be considered illegal. This also applies to the spouse of the deceased person. This eliminates the possibility of several different family members trying to influence the estate’s dealings. The executor will also decide how the assets will be divided between the heirs and if any or all assets need to be sold. If a will is in place the executor will base his/her decisions on it. Eventually, the executor will prepare a liquidation and distribution account. This would include what they intend to do with all the assets left after expenses. This account would be delivered to the Master, who will check to see if the executor’s actions reflect the will of the deceased and that all legal requirements have been fulfilled. Important things to keep in mind? The Master of the High Court should be notified of the deceased person’s estate not later than 14 days after the death. According to the Department of Justice, the death of anyone who owned property in South Africa must be reported to the Master, whether or not they died in the country. All estates that exceed R50 000 should be reported to the Master of the High Court directly because magistrate’s offices have limited jurisdiction. If reported to the magistrate’s office, estates will usually be referred to the Master. References The Department of Justice and Constitutional Development. 2012. “Reporting the estate of the deceased”. Accessed from: http://www.justice.gov.za/services/report-estate.html/ on 11/05/2016. Administration of Estates Act 66 of 1965. Accessed from: http://www.justice.gov.za/ on 11/05/2016. This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE). .col-sm-10.col-sm-offset-1.col-md-8.col-md-offset-2.text-center { margin-top: 25px; color: #f3f3f3;} h6 { display: none !important; } .col-sm-8 { width: 100%; } .bg–secondary {background-image: url(https://vzri.co.za/wp-content/uploads/2018/10/firm4.jpg); background-repeat: no-repeat; background-size: cover;} h2 { color: #f3f3f3;}