Unit 4 - Joint And Mutual Wills

Law for Land Managers 1B

Joint and Mutual Wills

Unit 4 Joint and Mutual Wills Objectives At the end of this unit you should be able to: • • • • • • • • • • • • • •

Define Adiation Define repudiation Define Joint Wills Define Mutual Wills Discuss Massing Discuss Common law massing Discuss Statutory Massing Discuss the Doctrine of Election Define the Right of Accrual Define Joinder Re, Joinder Re at Verbis and Joinder verbis tantum Name the circumstances under which the right of accrual does not operate Discuss vesting of benefits Discuss acceleration of Benefits Define Collation

SECTIONS: 1. Adiation and Repudiation 2. Joint and Mutual Wills 3. Massing 4. The Doctrine of Election 5. The Right of Accrual 6. Vesting of Benefits 7. Acceleration of Benefits 8. Collation

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Law for Land Managers 1B

Section 1

Joint and Mutual Wills

Adiation & Repudiation

All beneficiaries have the right to choose whether to inherit or not. Acceptance to inherit is called Adiation. Refusal to inherit is called Repudiation. A beneficiary has a reasonable time after vesting has taken place to decide whether to inherit or not. Where a beneficiary refuses to inherit he or she has to inform the Master of the High Court in writing. Normally it is accepted that a beneficiary adiated where no repudiation is made in writing. However, where an obligation is imposed on a beneficiary or where the testator disposed of property belonging to the beneficiary, the Master will require an adiation in writing. Wiener v The Master 1976 (2) SA 830 (7) The effect of adation is that the beneficiary acquires a vested personal right to claim delivery or transfer of the inheritance or bequeathed benefit after liquidation of the deceased estate by the administrator of the Estate. Greenbery v Estate Greenberg 1955 (3) SA 36 (A) Repudiation may have the following effects: 1)

The will may provide for someone to substitute the repudiating beneficiary.

2)

The Right of accrual might become applicable where the repudiated benefit accrues to the shares of the other testate heirs.

3)

The repudiated benefit may fall into the remainder estate of the testator’s estate and the bequeathed estate may devolve in terms of the law of intestacy.

A repudiation that was made wrongly can only be reversed by the courts otherwise repudiation is final. Ex Parte Estate Van Rensburg 1965 (3) SA 25 1 (C); Oxanham v Oxanham’s Executor 1945 WLD 57

Section 2 A.

Joint And Mutual Wills

JOINT WILLS

A Joint Will is a separate will of two or more parties in one document. In a joint Will each testator has the right to revoke or alter his/her will without the knowledge or consent of the other testator in the joint will.

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Law for Land Managers 1B

B.

Joint and Mutual Wills

MUTUAL WILLS

Mutual wills are also known as reciprocal wills. A mutual will is a will of two or more parties in one document wherein they benefit one another. Each testator has the right to revoke or alter his/her will. Thus all mutual wills are joint wills however not all joint wills are mutual wills.

Section 3

Massing

Massing takes place when two or more persons makes a joint or mutual will in which they add a part or whole of their respective estates to each others estate and disposes jointly thereof. It is important to ascertain that the testators intended massing to take place as there is a legal presumption against massing, meaning that if any doubt exist in the will about whether the testators intended massing to occur then there will be no massing. D’ Oyly –John v Lousada 1957 (1) SA 368 (N) 373 In order for massing to take effect it is imperative that the first dying testator should have disposed of his or her own estate as well as of the estate of the survivor. Ex Parte Gouws 1952 (3) SA 793 (0) 798 Thus massing only occurs when the survivor has adiated the joint or mutual will and he or she repudiates then massing cannot take place. There are two types of massing: a)

Common Law Massing

b)

Statutory Massing

A.

COMMON LAW MASSING

In the case of common law massing the surviving party or parties need not obtain a limited interest and full ownership of the estate assets can pass over to the survivors. E g: A couple married in community of property mass their joint estate worth N$ 600 000 in a joint will. The farm worth N$ 400 000 is bequeathed to the surviving spouse and the residue of the joint estate to their child. If the surviving spouse adiates, he /she acquires full ownership of the farm and not a limited interest. The child will inherit the N$ 200 00 residue of the estate, free from any limited interest. Unit 4

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Joint and Mutual Wills

Common law as developed by the courts applies to cases which do not fall within the scope of Section 37 (i.e. massing in a will of an only testator). B.

STATUTORY MASSING

Statutory massing takes place where a)

A joint will nominate ultimate beneficiaries in respect of the joint property;

b)

The surviving testator (s) receives a limited right over the massed property and

c)

The surviving testator (s) adiates the benefit.

The following are requirements in order for Section 37 of the Administration of Estates Act, 66 of 1965 to operate: 1.

The survivor must adiate

2.

The survivor should receive a limited interest such as a usufruct or a fideicommissum in respect of the massed property.

3.

There must be a mutual or a joint will,

4.

There must be two or more parties to the joint or mutual will and they need not be married to each other.

5.

The property of each testator must be consolidated and all or part thereof must be dispose off by the mutual will.

6.

The survivor must accept the benefit bequeathed to him.

7.

The deposition must take place after the death of the first dying testator.

8.

The survivor relinquishes his/her share in their massed estate.

E.g. Ben and Sara are married in community of property and their joint estate consists of a house. In their mutual will they leave their house to their daughter, Jane, with a usufruct in favour of the surviving spouse. If Sara accepts the usufruct on the death of Ben, massing takes place. Once massing has taken place the surviving testator cannot alter or revoke the mutual will at a later stage. The surviving testator can thus not make an independent will; he/she is bound to dispose of his/her assets in terms of the mutual will.

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Law for Land Managers 1B

Joint and Mutual Wills

If the surviving testator decides to repudiate it has the following effect: 1)

The surviving testator may not receive any benefit under the will from the estate of the first dying testator.

2)

The surviving testator retains his/her own estate and may dispose of it in any way he or she wishes

3)

The mutual will, will now only be applicable to the first dying testator and will only be subjected to the provision that the surviving testator may not receive any benefit from the estate of the first –dying testator.

Massing can also be made conditional and should the survivor testator fail to fulfil the condition he/she will forfeit his/her benefit under the first-dying testator’s will, and the heirs of the first-dying testator inherit his or her property. Holmes Executor v Rawbone 1954 (3) SA 703 (A) 710 The surviving testator is entitled to dispose of property acquired after the death of the first-dying testator in a separate will, unless the parties have in express terms deprived the survivor of this right. Joubert v Ruddock 1968 (1) SA 95 E.

Section 4

The Doctrine of Election

Election takes place when a testator leaves a benefit to a beneficiary and at the same time imposes a burden on him. The benefiary now has to elect whether to benefit or not because he cannot adiate without accepting the provision that are not in his favour. One cannot partly adiate and partly repudiate a will; it is either wholly repudiated or adiated. Van der Merwe v Van der Merwe’s Executrix 1921 TPD at 14 This doctrine only applies if a burden such as a modus or a condition has been placed on the beneficiary by the testator. Massing is only one branch of the doctrine of election, because the survivor has to decide whether to adiate or repudiate. Election must be made within a reasonable time.

Section 5

The Right Of Accrual (Ius Accrescendi)

This is the right of an heir or legatee to inherit those bequeathed benefits which a co-heir or co-legatee refuses to inherit or is incompetent to inherit.

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E.g. I leave my house to John and Mary. If John should predecease the testator, Mary will inherit the house unless a contrary intention is apparent from the will. The house consequently accrues to Mary. To determine whether the testator has in fact intended accrual to take place the law takes into account the following: 1.

JOINDER RE (joinder by the thing)

This occurs where the testator gave the same thing to two or more persons in different bequests in his/her will. E.g. A leaves his farm to B in clause 1 of his will and to C in clause 3 thereof. The Interests of B and C are joined by the thing. Here the indication is that the testator in fact intended accrual to take place. If B cannot take the farm C takes the whole farm and if both of them take the farm they are co-owners of the farm. 2)

JOINDER RE ET VERBIS (joinder by the thing and by the words)

This occurs where a testator in a single bequeaths the same benefit to two or more beneficiaries. E.g. I leave my farm to A and B Labuschagne v Schoeman 1915 CPD 19 E.g. I leave my farm to A and B jointly Hobson v Hobson (1908) 25 SC 590 E.g. I appoint A and B my universal heirs In re Estate Ross 1941 CPD 426,434-436 3)

JOINDER VERBIS TANTUM (joinder by words only)

This occurs where separate benefits are left to different beneficiaries in a single bequest. E.g. I leave ¾ of my farm to A and ¼ to B or I leave half of my farm to A and half to B. The following 3 guidelines also help to determine the testator’s intention: a)

Unit 4

The scheme of the will as a whole

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b)

The presumption against partial intestacy

c)

The nature of the thing bequeathed e.g. where the thing bequeathed is not divisible the presumption is in favour of accrual.

CIRCUMSTANCES UNDER WHICH THE RIGHT OF ACCRUAL DOES NOT OPERATE 1)

Where a beneficiary’s interest has vested accrual cannot operate

2)

Where the interests of the beneficiaries are completely separated by the testator .E.g. I leave my car to A and my house to B.

3)

Where a substitute is named to inherit where the beneficiary does not or cannot inherit.

4)

Where section 2C of the Wills Act applies the right of accrual will be excluded. E.g. I leave my estate to my sons John and Sam. John dies before the testator but leaves a daughter Iris. The beneficiary, John, unable to inherit, is a descendant of the testator and therefore direct substitution is implied in terms of Section 2 C of the Wills Act of 1953, Iris will inherit her father’s share.

Where an heir cannot inherit or repudiates and accrual does not take place the benefit falls back into the estate for the intestate heirs. Where a legatee fails to inherit or repudiates and accrual takes place, the legacy lapses and falls back into the estate for the benefit of the testate heirs. If there are no testate heirs their estate will devolve upon the intestate heirs. E.g. I leave my farm to my brother, B, and I bequeath the residue of my estate to my two sisters M and N.

Section 6

Vesting of Benefits

Vesting The word vesting has two different meanings. Firstly, it is stated that a right vests in a person, i.e. that such person is a holder of the right. Secondly, it can be used to draw a distinction between a right that is certain and that is conditional. Where a person has a vested right, such right cannot be taken away from him, however a conditional right can be taken away as it has not vested. See Jewish Colonial Trust Ltd v Estate Nathan 1940 AD 163

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Joint and Mutual Wills

There is a presumption in law that vesting takes place on a testator’s death, this is so if it is not apparent from the will of the testator as to when vesting should take place. Estate Cato v Cato 1915 AD 290 at 306 Thus on the death of the testator the heir gets a vested right to claim delivery or transfer of the bequeathed property from the executor. This right can only be claimed once the estate is finalized. It should however be noted that although one has a vested right it does not necessarily mean that you have actual ownership over the property.

Dies Cedit and Dies Venit Dies Cedit is the time when a beneficiary gets a vested right to claim delivery of the bequeathed benefit unconditionally. In short, dies cedit is when the beneficiary acquires a vested right. This takes place immediately after the death of the testator even though this right cannot be claimed unless the estate is finalized. This means that the beneficiary has a right to the benefit however should he, die after the right has vested and has not yet been claimed, it will form part of his estate and his beneficiaries would be able to claim this right. Dies Venit is the time when the beneficiary’s right to claim delivery of the bequeathed property becomes enforceable. In short, dies venit is the time the beneficiary may enjoy his/her property or the day delivery of the property takes place. It is presumed that a testator intended both dies cedit and dies venit to take place immediately after his death, however in practice this is not always possible as the estate first has to be finalized before the beneficiary can obtain the right to enjoy his/her property. Both dies venit and dies cedit can be delayed, thus , if dies cedit is delayed, there is no way that dies venit can take place as one must have dies cedit in order to get dies venit. A testator may stipulate in his will when dies cedit and dies venit can take place and may postpone both or either. Thus a testator may postpone dies venit as follows: E.g. I bequeath my entire estate to A but she can only receive the inheritance when she turns 30. Here it evident that dies cedit will take place after the death of the testator however dies venit has been postponed until the beneficiary reaches the age of 30. When the beneficiary turns 30 she will be entitled to use and enjoy the inheritance.

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Joint and Mutual Wills

The same situation is created in the case of usufructs. E.g. A leaves a benefit to B subject to B right of usufruct of the bequeathed benefit during his / her lifetime. Dies cedit is the moment of the testators’ death so B acquires a vested right however dies venit will only arrive when C, the usufructuary passes away in order for B to acquire full ownership of the bequeathed benefit. Thus for the usufructuary C, both dies venit and dies cedit arrives at the death of the testator. The testator may make a benefit conditional subject to the fulfilment of the suspensive condition. E.g. I bequeath my estate to B if he wins the national lottery. Here both dies cedit and dies venit are suspended and both will only arrive once the condition is fulfilled. Should the suspensive condition never be fulfilled the particular bequest falls away and accrues to other heirs in accordance with the right of accrual or may devolve in terms of the laws of Intestate Succession. Trust and Vesting Dies cedit and dies venit may be postponed by the testator by making use of a trust. E.g. where a testator orders that his trustees keep his property in trust to support his widow out of the income from it and divide the capital amongst his surviving children after his death. The children will acquire a vested right only once their mother passes away. Thus dies cedit and dies venit will only take place then. Greenberg v Estate Greenberg 1955 (3) SA 361(A) A trust has the effect of postponing dies venit and dies cedit only takes effect once the testator dies.

Section 7

Acceleration of Benefits

An acceleration of benefits takes place where an intermediate beneficiary (such as a fiduciary) repudiates his /her benefit without the testator having made provision for this. E.g. “I leave my house to my son, subject to a lifelong usufruct in favour of my wife” Should the wife repudiate the benefit the question arises as to whether the house must go immediately to the son, who is the ultimate beneficiary or whether the

Unit 4

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Joint and Mutual Wills

will must literally be interpreted and the son only be allowed to get full ownership of the house once his mother is dead. The courts have adopted two views to this question. In the case of Emanuel v Estate Rice 1968 (3) SA 502(W) and Louw v FW KPA Albrecht Trust 1998 (3) SA 1048 CC, the court directed that the bequeathed benefit go to the ultimate beneficiaries immediately. However in the case of Ex Parte Albertus 1944 TPD 187 the court refused that the bequeathed benefit go to the ultimate beneficiaries immediately. The first view is the most prevailing view at the moment; however one should always keep in mind the construction of the particular will. Where a testator leaves a will and the provisions of the will fail the estate will devolve in terms of the laws of intestate succession, vesting thus has to be determine. Does it take place when the provisions of the will fail or does it take place when the intestate heirs are identified? The courts in the case of Harris v Assumed Administrator, Estate MacGregor 1987 (3) SA 563 (A) decided that vesting takes place at the date of the ultimate failure of the will.

Section 8

Collation

Collation takes place where the executor of an estate, under certain circumstances, take benefits given to certain heirs by the deceased during his lifetime, into account when distributing the estate among certain beneficiaries. This is based on the presumption that parents wish that children benefit on an equal basis as far as succession is concerned. Thesnaar v Die Meester 1997 (3) SA 169 (C) Collation arises when the deceased ‘s property vests, however the obligation falls away if the heir concerned refuses to inherit or if the co-heirs do not insist on collation or the testator indicates in his will that collation need not take place. Collation takes place only in the direct line of the deceased, i.e. amongst his / her children and further descendants. The obligation to collate rest on the descendants of the deceased only if they are heirs of the deceased, whether testate or intestate, heirs are obliged to collate only if they would have inherited intestate. Ascendants, strangers, collaterals and descendants who inherit as legatees, usufructuaries, fiduciaries or fideicommissaries are not obliged to collate. The descendants who have a duty to collate are the only persons who are entitled to collate. A surviving spouse who was married to the deceased in Unit 4

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Joint and Mutual Wills

community of property is also entitled to claim that the deceased’s descendants collate what they received from the deceased before the division of the joint estate. The following benefits must be collated: a) Benefits received by a child as part of his or her inheritance b) Benefits received for the promotion of a child’s occupation or business. c) Benefits given with a view to a marriage. The following benefits do not have to be collated: a) Gifts given out of generosity b) Benefits received by a child for services rendered. c) Expenses incurred by the parents for the maintenance and education of their children The abovementioned benefits must however, be collated if they are out of proportion to the estate of the deceased. It should be noted that the benefits to be collated and not to be collated are all dependent on the intention of the testator which is decisive. E.g. A leaves an estate of N$ 60 000-00 and leaves behind two children, B and C. B must collate N$ 20 000-00 and C N$ 10 000-00. The balance for distribution is N$ 90 000-00 after collation, so that B ought to inherit N$ 45 000-00 and C N$ 45 000-00; however N$ 20 000-00 and N$ 10 000-00 respectively are deducted from these amounts so that B inherits N$ 25 000-00 in terms of the distribution account, and C N$ 35 000-00. Abrahams v Els 1964 (2) SA 215 D 219

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Joint and Mutual Wills

REVISION QUESTIONS 1. Define and discuss the following concepts: a) Adiation b) Repudiation c) Joint Will d) Mutual Will e) Massing f) Doctrine of Election g) Collation h) The Right of Accrual 2. When does a benefit vest in a beneficiary?

Unit 4

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