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Month: September 2016

HOW DO I REGISTER A TRUST?

HOW DO I REGISTER A TRUST?

a3_aA trust is an agreement between the person who owns the assets and the appointed trustees. A trust can be a good way to preserve your wealth for your family and children. A well-managed trust will make sure that anyone who is a beneficiary of the trust benefits from it. The trustees have the important job to administer the trust and its assets objectively with the best interests of the beneficiaries in mind.

Trusts and their administration fall under the Trust Property Control Act no 57/1988.

What types of trusts are there?

It’s important to note that there are two types of trusts. An inter vivos trust and a testamentary trust. A testamentary trust is one that’s formed from the will of a deceased person. In the case of a testamentary trust the deceased's last will serves as the trust document. An inter vivos trust is created between living persons, and will form the basis of this article. Inter vivos trusts can limit estate duty and preserve your assets and wealth for your descendants. Certain financial institutions assist in setting up a trust and can act as trustees.

Registering an inter vivos trust

To register an inter vivos trust with the Master of the High Court, the following documents must be lodged.

  1. Original trust deed or notarial certified copy thereof.
  2. Proof of payment of R100 fee, for registration of a new Trust.
  3. Completed Acceptance of Trusteeship (J417) and Acceptance of Auditor Application (J405) forms.
  4. Bond of security by the trustees – form J344 (if required by the Master)

* There are no costs involved in amending an existing Trust.

These documents are also required for the Master to issue the trustees with letters of authority for administering the trust. A trustee may not proceed to administer the trust without the written authority of the Master.

If the trust’s assets or majority of its assets are located in a particular area, then the inter vivos trust has to be registered with the Master who has jurisdiction in that area.

De-registering of a trust

The Master can de-register the trust only once it has been terminated. The common law makes provision for the termination of a trust as the Trust Property Control Act makes no such provision. The following circumstances can be grounds for a trust to be terminated:

  1. by statute
  2. fulfilment of the object of the trust
  3. failure of the beneficiary
  4. renunciation or repudiation by the beneficiary
  5. destruction of the trust property
  6. the operation of a resolutive condition

You will still need the original letter of authority, bank statements reflecting a nil balance on the final statement and proof that the beneficiaries have received their benefits.

Administering the trust

Trustees are required to comply with the Trust Property Control Act, which determines how trusts should be administered and the role of the trustees. If trustees fail to comply with the Act they may face criminal prosecution. The trustees have to always act with the best interests of the beneficiaries in mind.

Some legal requirements of trustees include not being able to make secret profits, taking care and being objective when administering trust assets and always acting in good faith.

Reference:

Justice.gov.za. The Department of Justice and Constitutional Development, Administration of Trusts. [online] Available at: http://www.justice.gov.za/master/trust/ [Accessed 19/05/2016].

Sanlam.co.za. Sanlam Trusts. [online] Available at: https://www.sanlam.co.za/personal/financialplanning/willstrustsestates/Pages/trusts/
[Accessed 20/05/2016].

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)

HOW TO AVOID A COURT BATTLE WITH MEDIATION

HOW TO AVOID A COURT BATTLE WITH MEDIATION

a2_aIn the case of a legal dispute where the parties involved do not want to go to court, mediation offers an out-of-court alternative. On the other hand, litigation involves two parties enforcing or defending their legal rights through court. Mediation is done with the assistance of a mediator.

Who is a mediator?

The mediator is someone chosen by the parties and is sometimes a lawyer. However, the mediator doesn’t have to be a lawyer and can also be experts from other professions. The background of the chosen mediator will most likely depend on the type of dispute. In a dispute concerning the construction of a building, an engineer could be chosen to act as a mediator because of their specialised knowledge of construction sites.

All mediators are chosen from a panel of accredited mediators appointed by the Minister of Justice and Correctional Services. They would have also had mediation training, meaning they’re not random professional people from the public. The mediation clerk will help the parties decide which mediator is best for their particular dispute. As mentioned, the type of dispute will play a major role in the type of mediator appointed or suggested.

The job of the mediator is to facilitate discussions between the parties who have a dispute. Among other things the mediator assists them in identifying and solving issues.

What’s the point of mediation?

The point of mediation is to settle disputes peacefully. It has few technicalities and promotes reconciliation between two opposing parties who may have had a misunderstanding or simply a bad experience. Litigation is more time-consuming and usually leaves someone at a disadvantage. Litigation is often sort out in hospital disputes in circumstances where a patient feels they’ve been neglected or mistreated by a doctor. Instead, mediation can offer both the parties a beneficial outcome and help avoid an ugly court case. An unhappy patient may approach the hospital where they were treated and come to an agreement where the hospital can help the patient find better treatment or assist them in one of their immediate needs. The patient would then not sue the hospital, meaning the hospital wouldn’t lose money or their reputation.

What are the advantages of mediation?

The mediation process has several advantages. The most obvious one is that the parties involved in a dispute don’t have to go to court and can settle the issues much more efficiently and inexpensively. However, some people may decide to ignore mediation for litigation, which is far more expensive and prolonged. Mediation offers the added benefit of providing a “win-win” situation for both parties through negotiation and compromise.

So who is right and who is wrong?

A mediator does not declare who is right and who is wrong in a dispute nor do they give the parties a final solution by judging them. It is the responsibility of the opposing parties to find their own solution with the help of the mediator.

The mediator will draw from his/her professional experience in the particular matter and use that to advise the parties involved in a dispute. That’s why a mediator is chosen with experience in the field over which the parties are fighting about. If the parties have come to an agreement the mediator will help draft a settlement agreement, which is enforceable in law as a contract.

Reference

Justice.gov.za. Department of Justice and Constitutional Development, Civil Law. [online] Available at: http://www.justice.gov.za/mediation/mediation/ [Accessed 18/05/2016].

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)

RENOVATING YOUR HOUSE

RENOVATING YOUR HOUSE

a1_a_2Gerald and Francis have been living in their dream home for the past 10 years.  In the last few months they noticed that the bathroom and kitchen are starting to look a bit dated and they would love some ekstra space for the children.

With great excitement they decided to update the bathroom and kitchen and close the stoep area to be used as a family room.

They were very surprised when friends reminded them that they should submit building plans for the stoep before the building work commence.  Surely building plans are not necessary, after all, the foundation, as well as two walls, are already in place?

It is important to remember that there are both national regulations, as well as municipality by laws to be taken into consideration.

The City of Cape Town for example require approved building plans for any structure, regardless if it is of a temporary or permanent nature, including alterations or extensions to an existing structure, except for buildings which is less than 5m2, a wire fence or open-side fabric shelter for a car, boat or caravan.  The plans must be drawn by an architect, technologist or draughtsperson who is registered with the South African Council for the Architectural Profession.

Furthermore, the City of Cape Town require building work to commence within 1 year from approval of the building plans and upon completion of the building work, a request should be submitted for the issuing of an occupancy certificate.

Before any building work commence, it is very important to contact your local authority and to establish what their requirements are regarding building plans, the submission thereof, as well as among other things their requirements regarding room dimensions, heights, natural lighting and ventilation, as well as the time frame in which building work should be completed, the inspections to be done and the occupation certificate to be issued.  Also, should your property be located in a Heritage area or be defined as a Heritage building, different guidelines will apply to keep in line with the architectural style and history of the area.

It may seem inviting to proceed with building work without approved plans, who will find out?  A building inspector can order you to stop with any further building until the plans are approved.  Failure to adhere thereto, may lead to a fine or even a court order to demolish the unapproved structure.

When planning an extension to an existing house, keep in mind that your property’s Title Deed may also have restrictive conditions limiting the distance to the boundaries of the erf where you are allowed to build, for example “No building or structure or any portion thereof except boundary walls and fences, shall … be erected nearer than 6,30 metres to the street line …, nor within 3,15 metres of the rear or 1,57 metres of the lateral boundary …”

Also, keep in mind, when you sell your property in future, the purchasers are likely to request copies of the approved building plans as a condition of the sale.  Should the plans not be up to date, it will be your responsibility to provide updated approved plans.  It is possible that an “illegal” / unapproved structure, which could be the very thing that attracted potential buyers in the first place, have to be demolished for the plans to be approved.  It is never advisable to make any changes to your property without consulting experts in the field as well as your local authority.

Renovating your property can be a very exciting project, ensure that you do your homework and know what is required from you.

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)