Unit 3 - Content Of Wills

Law for Land Managers 1B

Content of Wills

Unit 3 Content of Wills Objectives After studying this unit you should be able to: • • • • • • • • • • • • • • • • • • • •

Define a legacy and an inheritance Distinguish between an heir and a legatee Discuss the circumstances under which a legacy will fail Explain when an inheritance fails Define a bequest subject to a suspensive time clause Define a bequest subject to a resolutive time clause Discuss the two types of conditions Define a Modus Distinguish between a modus and a condition Define direct substitution Define fideicommissary substitution Distinguish between Direct and fideicommissary substitution. Explain how a fideicommissum is created Name the Restrictions on fideicommissa Discuss the court’s powers to remove or modify restrictions on the alienation of immovable property at common law and statutory law Discuss the various forms of fideicommissa Discuss the parties to a fideicommissa Define a usufruct Discuss the differences between a fideicommissum and a usufruct Discuss the similarities between a fideicommissum and a usufruct

SECTIONS: 1. Introduction 2. Legacies and inheritance 3. Differences between an heir and a legatee 4. Failure of legacy and an inheritance 5. Conditional and unconditional bequests 6. Modus 7. Direct Substitution 8. Fideicommissary Substitution 9. The Fideicommissum 10. Various Forms of Fideicommissa

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Content of Wills

11. The Legal Position of the Parties to a Fideicommissum 12. Usufruct

Section 1

Introduction

A testator may dispose of his estate any way he deems fit because he has freedom of testation, however there are limits to this freedom, in that the will must not be impossible to execute and it should not be vague and against public interest. Ex Parte Dessels 1976 (1) SA 851 (D) E.g. A testator may not make a provision in his will to the effect that his son will only inherit once he divorces his wife. There is no obligation on the testator to benefit his wife and children or his parents.

Section 2

Legacies and Inheritance

Legacies When a testator leaves a specific asset to a beneficiary, then this asset is referred to as a legacy. The beneficiary is referred to as a legatee. E.g. A bequests a farm to B, then the farm is the legacy and B is the legatee. An heir, on the other hand, inherits all the assets, or a share of the assets or the residue of the estate. This is known as an inheritance. Heirs only inherit after the legatees have inherited and if there is anything left in the estate then the heirs can inherit and if there is nothing left than the heirs inherit nothing. Eg. A inherits the farm and B inherits the rest of the estate. A is legatee and B is an heir, A gets a legacy and B an inheritance. It is important to note that legatees only receive their legacy after the creditors have been paid and only after the legatees have received the legacy can the heirs receive their inheritance if there is anything left. A legatee is in a better position then an heir as a legatee does not inherit the debts of a testator as the heir does.

Section 3. Differences between an heir and a Legatee Unit 3

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Law for Land Managers 1B

3.1. 3.2. 3.3

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Content of Wills

A legatee inherits first before the heirs inherit The heirs may be forced to account for those benefits that they received from the testator before his death. This is called collation whilst the legatees are never obliged to do so. The right of accrual differs in a minor way in the case of heirs and legatees. A testator may also leave a pre-legacy to a legatee. This is a special bequest which enjoys preference over all other bequests.

E.g. A testator may state that his son must receive N$5000 before any benefit is paid out. This prelegacy then enjoys precedence over ordinary legacies. A legacy may be subjected to a bequests price, which is a stipulated price that the legatee has to pay before he can inherit his legacy. He/she then has a choice whether to accept the legacy or refuse it, as one cannot take a benefit under a will without taking the burden it imposes.

Section 4 A

Failure of a Legacy and an Inheritance

Failure of a Legacy

A legacy will fail in the following circumstances: 4.1.

Where ademption takes place, this is where a testator alienates the object of his legacy through his lifetime. This is said to be a form of tacit revocation of the legacy. It is important to write that the intention of the testator plays a vital role in whether a legacy fails or not E.g. A, the testator, bequests in his will farm Kunubes to B, his son, however 2 years before A dies he sells his farm however neglects to change his will. Then A tacitly revoked the legacy. See: Barrow v The Master 1960 (3) SA 253 (E) 257.

4.2.

Where the legatee dies before the legacy vests in him.

4.3.

If the legatee repudiates the legacy.

4.4.

If the legatee is incompetent of inhering under the will.

4.5.

If the bequeathed thing is destroyed

4.6..

If the testator’s estate is insolvent.

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Law for Land Managers 1B

Content of Wills

See: Ex Parte Estate Lategan 1943 CPD 442 and Ex Parte Engelbrecht v Engelbrecht 1968(1) SA 244 (C); Ex Parte Adams 1964 (2) SA 135 (C) B

Failure of an inheritance

An inheritance fails in the same circumstances as a legacy except in the case of ademption and in the case of Ex Parte Adams (2) SA 135 C.

Section 5

Conditional and unconditional (Absolute) Bequests

An unconditional (absolute) bequest is one where the testator leaves property to the beneficiary without any conditions attached. These absolute bequests may be subject to a time clause. A time clause may be suspensive or terminative. A suspensive time clause is a bequest where the beneficiary will enjoy the benefit only at a certain future time. E.g. I leave my house to my son but he is not to take it before he turns 21. A bequest subject to a resolutive time clause is one in which the beneficiary’s rights are terminated when a certain time arrives. E.g. I leave my house to my wife. When she dies or turns 60 it is to go to the Cancer Association. A time is always certain to arrive but when it will arrive may be uncertain. A conditional bequest is one which depends on a future event which is uncertain, in the sense that it may or may not occur. In order for a condition to be valid it should not be illegal. Grusd v Grusd 1946 AD 465 at 474 ff 

5.1.

A condition is an unknown future event and there are two types conditions:

of

Resolutive Condition This is one where the bequest is made to terminate if a particular uncertain future event takes place e.g. I leave my house to my wife, if she should remarry; my farm is to belong to the Cancer Association. Here it is not certain whether the widow will remarry, but if she does not the house remains hers and if she does she loses the house.

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Law for Land Managers 1B

Content of Wills

A resolutive condition is of no effect if there is no gift over to someone else on fulfillment of the condition. Ruskin v Sapie 1966 (2) SA 306 (W) 5.2.

Suspensive Condition This is one where the beneficiary does not get a vested finally established right to the benefit bequeathed unless and until a particular uncertain future event take place. E.g. I leave my house to my wife if she wins a national tennis game. An inheritance which is subject to a suspensive condition vests in the heir only on the happening of a future, uncertain event. Van der Merwe v Van der Merwe’s Executors 1921 TPD 9 at 14 `19

Section 6

Modus

A testator is free to burden a bequest with a liability and the beneficiary is then expected to do something or to deliver something. E.g. My son inherits my house; however my wife has the right to live therein until her death. It is important to note that the burden is called a modus. In the case of a modal clause, the beneficiary receives his vested right immediately but subject to the accompanying condition. Wessels v DA Wessels en Seuns 1987(3) SA 530 (T) In the case of a conditional bequest, the vesting of rights is postponed until the condition has been compiled with. Difference between a modus and a condition a. A modus has big influence on the vesting of the bequeathed benefit in the heir or legatee concerned, unlike a suspensive condition. b. Unlike in a suspensive condition, where the heir or legatee concerned dies before the performance of a modus, the bequeathed benefit nevertheless devolves upon the heirs of the heir or legatee. The modus will rest on the deceased estate of the heir or legatee concerned. There is a presumption in law that when one is not sure whether a provision in a will is a modus or suspensive condition, it is a modus since a modus is unconditional. Jewish Colonial Trust Ltd V Estate Nathan 1940 AD 163 at 177: Holley V Commissioner for Inland Revenue 1947 (3) SA 119 (A) at 128.

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Section 7

Content of Wills

Direct Substitution

This is where a testator appoints a beneficiary to inherit a benefit and at the same time appoints another beneficiary to take the place of the first mentioned heir or legatee. E.g. I bequeath my farm to John, but if John cannot or will not inherit I bequeath my farm to Susan. Substitution may take place either in the alternative (direct substitution) or one beneficiary after another (fideicommissary substitution).If the testator does not expressly make provision, it may be that Section 2C (1) and 2C (2) of the Wills Act will automatically apply. Section 2C has the effect that if a testator appoints a descendant of his as a beneficiary, and that descendant renounces his benefit, or predeceases the testator, or is disqualified from inheriting, the testator’s surviving spouse or the descendants of the instituted descendants are impliedly directly substituted for such descendants who does not inherit. Section 2C (1): “ If any descendants of a testator, excluding a minor or mentally ill descendants, who, together with the surviving spouse of the testator, is entitled to a benefit in terms of a will renounces his right to receive such a benefit, such benefit shall vest in the surviving spouse.” Section 2C (2) “ If the descendants of the testator, whether as a member of a class or otherwise, would have been entitled to a benefit in terms of the provisions of the will if he had been alive at the time of death of the testator, or had not been disqualified from inheriting, or had not after the testator death renounced his right to receive such a benefit, the descendants of that descendant shall subject to the provisions of subsection (1) per stripes be entitled to the benefit, unless the context of the will otherwise indicates.” This rule is however subject to an exception. Section 2 C (1) provides that if the spouse of the testator together with the descendants are entitled to a benefit and the descendants relinquishes his benefits then the descendant’s share will go to the surviving spouse. If a testator provides in his will that: E.g. “My wife and three children are my heirs” and a child renounced his benefit, the wife will inherit her own share and the share that would have gone to the child who relinquished his benefit. Section 2C (2) becomes operative where the child does not relinquish his right but, is incapable of inheriting for some reason, he will be represented by his descendants.

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Law for Land Managers 1B

Section 8

Content of Wills

Fideicommissary Substitution

This occurs where a testator directs that one person inherit his assets on the condition that it must pass to someone else at a certain future date or at the occurrence of a specified event, this process creates a fideicommissum. E.g. “I bequest my farm to Ben and on Ben’s death I bequest my farm to Adrian. The first successor is called the fiduciary and every beneficiary to whom the benefit passes after a certain time or upon the fulfillment of a certain condition is called a fideicommissary. The difference between fideicommissary substitution and direct substitution is that with fideicommissary substitution there is always a succession of beneficiaries whilst with direct substitution either one beneficiary or the other inherits, they do not succeed each other once one of them inherits, the other loses all hope of ever inheriting. There is a presumption against fideicommissary substitution in favour of direct substitution this is so because the fideicommissary substitution creates a burden on the fiduciary as it limits his/her ownership except that of the eventual fideicommissary. If the fideicommissary dies before the fiduciary the fideicommissum expires and the fiduciary becomes the owner, however he/she may not alienate the property unless the court directs otherwise.

Section 9

The Fideicommissum

A Fideicommissum is created when a testator leaves his property to a fiduciary subject to the burden of handing it over in full ownership to a fideicommissary at a certain time or upon the fulfillment of a condition. E.g. “I leave my farm to John and upon his death it must go to Ben.” The first beneficiary is called the fiduciary (John) and the second beneficiary is called the fideicommissary (Ben).There are always at least three people included in a fideicommissum, namely the testator, the fiduciary and the fideicommissary. There can be more than one fideicommissary. 9.1

Restrictions on fideicommissa

Before 1965 a fideicommissum would be created for an unlimited number of generations. Ex Parte Barrand 1929 TPD 276, EC Pade Botha 1956 (4) SA 471 (C); Schoeman V O’Neil 1965 (3) SA 359 (A).

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Content of Wills

However in terms of the provisions of Section 7 of the Immovable Property Act 94 of 1965 this is now limited to two successive generations in the case of immovable property. Fideicommissa over movable property are still effective for as long as the testator wishes. The courts have the power to remove or modify restrictions on the alienation of immovable property both at common law and by statute. 9.1.1 Common law Common law prescribes that a sale or mortgage may be authorized for reasons of necessity and only with the consent of all beneficiaries and only if they are all majors it is sufficient however that if they are minors the High Court as upper guardian of all minor children may consent on their behalf if the sale or mortgage of the property is for their benefit. Ex Parte Marais 1960 (2) SA 197 (G), Ex Parte Paudas 1965 (1) SA 52 (W) 9.1.2

Statutory Law: The Immovable Property Act 94 of 1965

The following sections provide that the court has the statutory power to remove or modify burdens on property, including fideicommissa: 1. Section 2(1) – A beneficiary can apply to court for the removal or modification of the restriction on the ground that such removal or modification will be to the advantage of any beneficiaries. Present or future. Ex Parte Murison 1967(2) SA 617 (O) 2. Section 3 – Where the court finds that the shares of the immovable property are too small for beneficial occupation or beneficial use is prevented by a prohibition against subdivision, or because circumstances have arisen which the testator did not foresee the court may remove or modify any such restriction or give any other appropriate order. Ex Parte Stranack 1974(2) SA 692(D) 3. Section 3(1) (d) – The court may remove or modify a restriction if “it will be in the public interest or in the interests of the persons referred to in Section 2(1).

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Law for Land Managers 1B

Section 10 Various fideicommissa

Content of Wills

forms

of

10.1. Conditional fideicommissa This is where the testator leaves property to one beneficiary subject to the condition that if a particular uncertain future event takes place, the property is to pass to another beneficiary. If the uncertain future event does not take place then the beneficiary will remain the owner and when he dies then the property will remain part of his estate. E.g. “I leave my farm to my wife and should she remarry the farm is to go to my son.” In this case the fiduciary is the owner. 10.2. The si sine liberis decesserit Clause (if someone dies without children) This is where a testator bequests his property to another and stipulates that if the beneficiary dies after the testator without leaving any children (si sine liberis decesserit) the property or estate must pass to a 3rd person. E.g. “I leave my farm to my sister, If she dies without children, the farm must go to my son.” The condition is that the testator’s sister must die without leaving any children before the testator’s son can inherit, if the testator’s sister dies and leaves children than the condition is fulfilled and the son of the testator will not inherit. It is important to establish that where the si sine liberis decesserit clause is concerned, it does not matter whether the children mentioned in the clause are descendants of the testator or not. See: Ex Parte Van Tonder 1978(3) SA 369 (E); Du Plessis v Strauss 1988 (2) SA 105 (A) 10.3. The Fideicommissum Residui This is where the testator bequeaths property to a beneficiary, subject to the condition that as much of it as may be left at the time of the beneficiary’s death is to devolve upon another person. E.g.” I leave my entire estate to my wife and what is left of it upon her death must go to our children.” Here the wife is the fiduciary and the children the fideicommissaries.

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Content of Wills

However, it should be noted that where the fiduciary has an implied power of alienation and the fideicommissary devolution only applies to what remains upon the death of the fiduciary. Novella 108, a statute of Justinian dating from the 6th century AD, states that the fiduciary may only alienate ¾ of the property and the other ¼ must be left for the fideicommissaries, however it should be noted that the intention of the testator takes precedence over the Novella 108. This form of fideicommissum is mostly found in joint wills of husband and wife, the survivor is the fiduciary and the children the fideicommissaries after residue. The fiduciary may not dispose of any part of the fideicommissary property by will. Ex Parte Berrange 1938 WLD 38 If the fiduciary provides security for the eventual payment of the compulsory quarter, he may alienate the whole fideicommissary property. (Firebrace v The Master 1960(2) SA 368 (E); Estate Smith Estate Follett 1942 AD 364) Coll v Murray 1917 NPD 222 The fideicommissum residue therefore constitutes an exception to the general rule that the fiduciary may not alienate the fideicommissary property.

Section 11 11.1

The Legal Position of the Parties

The Fiduciary

The fiduciary may not alienate or mortgage the fideicommissary property except where he obtains the cooperation of all the fideicommissaries where they are all majors. However a fiduciary may alienate his fiduciary interest. The effect would be that ownership will pass to the buyer however the original terminative condition will still be effective. Thus the buyer would lose all his rights to the property on the death of the original fiduciary. See: Ex Parte Wessels 1949 (2) SA 99 (O) 104. The fideicommissary property does not form part of the joint estate where the fiduciary is married in community of property however the interest therefrom does. See: Barnett v Rudman 1934 AD 203 Ex Parte Pierce 1950 (3) SA 628 (O) 631-632 Where the testator survives the fiduciary the fideicommissary acquires a vested right in the property on the death of the testator. See: Ex Parte Die Standard Bank 1974 (2) SA 310 (T)

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Law for Land Managers 1B

11.2

Content of Wills

The Fideicommissary

This is the person who inherits after the fiduciary, he/she need not be alive at the time of the testator’s death, however he/she should be alive or at least conceived at the time the fideicommissary property is to be transferred to him/her. Where the fideicommissary dies before the fideicommissary property can be transferred to him/her then the fideicommissum falls away and the heirs of the fideicommissary has no claim as the property then becomes the property of the fiduciary who then has full ownership of the fideicommissary property.

Section 12. Usufructs A Usufruct is created when a testator gives a right to the income of a specified asset to a person (e.g. Surviving spouse) and the right of ownership (bare dominium) to someone else, (e.g. The children). The person who acquires the right to use the thing is called the usufructuary and the person who acquires ownership is called the dominus or remainder man. E.g. “I leave my farm to my son X however my wife is to have the lifelong usufruct of the farm.” Thus the son is entitled to the ownership of the farm however he may not enjoy it until the testator’s wife dies. If the son predeceased the testators wife then the heirs of the son has the right of ownership. Thus the son’s right is unconditional although he does not have the right of enjoyment. The surviving spouse, on the other hand, has a limited real right on the death of the testator, and may enjoy the fruits of the farm until her death. A

Difference between fideicommissum and Usufruct

1.

Fideicommissum Ownership of the property always vests in the fiduciary and passes to the fideicommissary when the time for the passing of ownership arrives or when a condition is fulfilled or else it remains with the following or forms part of the estate .

2.

Usufruct The usufructuary never has ownership, he or she only has a limited real right. If the usufruct becomes owner then the usufruct expires by merger.

B

Similarities between fideicommissum and usufruct

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Law for Land Managers 1B

Content of Wills

The first holders in both the fideicommisum and usufruct (i.e. the fiduciary and usufructuary respectively) has the use and enjoyment of the property and its fruits and the second holders (the fideicommissary and remainder man) gains full ownership on the death of the first holder.

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Content of Wills

REVISION QUESTIONS 1. Differentiate between a legacy and an inheritance? 2. Define an heir 3. Define a legatee 4. When does a legacy fail? 5. When does an inheritance fail? 6. Define and discuss Conditions in the law of succession 7. Define the concept Modus 8. Distinguish between a modus and a condition 9. What is Direct Substitution? 10. What is Fideicommissary Substitution? 11. How is a fideicommissum created? 12. What are the restrictions on fideicommissa? 13. Name the various forms of fideicommissa 14. Distinguish between a usufruct and fideicommissa

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