April 20, 2021
“No matter how much you’ve been warned, Death always comes without knocking” (Margaret Atwood)No one wants to contemplate their own passing, but the reality is that sooner or later it is inevitable, and particularly in these dangerous times we need always to be prepared. The loss of a loved one is always distressing. It can however be compounded by the challenge of dealing with their assets. Few people appreciate all the costs involved in settling an estate. Understanding these expenses and planning for how to deal with them can make a big difference to those left behind.
Executor’s fees and costsEvery estate must be wound up by an executor. Ensure that in your will you nominate an executor you can trust to act with integrity, professionalism and speed. An executor can charge a maximum fee of 3.5% plus VAT. That equals 4.025% of the value of the estate. Depending on the size and complexity of your estate this fee may be negotiable. The executor will also incur costs such as advertising to find any outstanding creditors, bank charges, accounting fees, conveyancing on the transfer of property and paying the fees due to the Master of the High Court. Together, these could run into tens of thousands of rands.
Taxes and estate dutiesThe South African Revenue Service (SARS) levies 20% estate duty on the value of any estate, but there is no estate duty payable on an estate with a net value below the R3.5 million abatement (allowable deduction). Any amount above R30 million will be taxed at 25%. An estate worth R40 million will therefore have to pay estate duties of R7.8 million (R5.3 million on the first R30 million, after the R3.5 million abatement, and R2.5 million on the next R10 million). These taxes will not, however, be paid on any assets left to a surviving spouse. In that case they effectively ‘roll-over’ and will only be charged upon the spouse’s death. The estate will also have to pay capital gains tax on any assets that are sold. SARS will also conduct a final income tax assessment. In addition, South Africans need to consider that if they have assets in other parts of the world, they may be liable to pay estate taxes in those countries as well. There are double taxation agreements in place with many countries that prevent most assets from being taxed twice, but where taxes elsewhere are higher than in South Africa, the estate will still have to pay the difference. Inheritance tax in the UK, for instance, is 40%.
Outstanding debtThe estate will have to settle any debt such as credit cards, loans, or bonds on property. Interest on these debts does not stop accruing when someone passes away, so it is best to deal with them as early as possible. It is most critical to consider how to handle home loans, especially if they are held over a property in which surviving family members are still living. Sometimes these individuals may not qualify to take over the bond due to their own financial position, which means that the house may have to be sold if the debt can’t be settled.
Being prepared – check what cash the estate will haveEven though an estate may have sufficient assets to meet all of these expenses, it can still be a problem if it doesn’t have enough available cash. That is because the executor may have to sell assets to free up money. This not only leads to potential extra costs and taxes but can be traumatic if something like a house where a loved one is living or a car that someone needs for transport has to be disposed of. This is why it is important to prepare an estate to make sure that there is enough cash available. One way of doing this is to take out a life insurance policy that will pay cash into the estate. This will ensure that your family members aren’t left with a potentially major financial burden and face additional stress after your death. The above is of necessity just a summary of the cost considerations involved, so speak to your attorney about how your will and estate are structured and how you can plan to meet all the costs.
Disclaimer: The information provided herein should not be used or relied on as 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 professional adviser for specific and detailed advice.
January 13, 2021
A recent High Court decision has been widely viewed as an important victory for the rights of unmarried opposite-sex life partners. Until now, if one such partner died intestate (without making a will), the other could not inherit on the same basis as could a married spouse. Nor could the surviving life partner claim maintenance from the deceased estate (whilst a surviving spouse can claim).
The High Court’s pronouncement that the relevant legislation was unconstitutional and invalid in this regard must still be confirmed by the Constitutional Court, but it certainly is a clear indication that our courts want to see our laws amended to protect the rights of such couples.
The life partner who will now inherit
- An unmarried 57-year-old man died leaving substantial assets. Both the executor of his deceased estate and the Master of the High Court rejected, primarily on the basis of existing law, his surviving (female) partner’s claim to inherit from the estate.
- She approached the High Court with her claim, and the Court found on the facts that the couple had been “partners in a permanent opposite-sex life partnership, with the same or similar characteristics as a marriage, in which they had undertaken reciprocal duties of support”.
- The provisions of the Intestate Succession Act and the Maintenance of Surviving Spouses Act were, held the Court, unconstitutional to the extent that they excluded opposite-sex permanent life partners from their provisions.
- The practical effect is that the surviving partner will inherit as though she was a spouse.
But, if you are in an opposite-sex life partnership –
- You should still make a willThere’s no guarantee that the Constitutional Court will confirm the declaration of invalidity, but more importantly there are very sound reasons for everyone – married or not – to leave behind a valid and properly-drafted will.It is quite possibly the most important document you will ever sign. Without a will, you lose your right to choose who inherits what (your spouse for example will get only a “child’s share” on intestacy), you have no say in who will be appointed as the executor of your deceased estate, and you risk exposing your surviving loved ones to the trauma and expense of family dispute and litigation.
In the context of life partners, perhaps you want your surviving partner to inherit everything, or perhaps you don’t. The only way to ensure your desired outcome is to specifically provide for it in your will.
- You should still have a cohabitation agreementAn enduring myth in our society is that our law recognises the concept of a “common law marriage”. There is no such thing in South African law and whilst there are some limited statutory protections for life partners, if and when you part ways you could well find yourselves embroiled in a prolonged and bitter dispute. Quite possibly one of you will be left destitute after many years of “living as man and wife”.The quick and easy solution is to enter into a cohabitation agreement, it’s the best way to safeguard both of your rights (personal as well as financial).
September 21, 2020
We are in the month of September 2020. Spring has come and lockdown 1 has arrived. In a sense I am reminded of the power of a tornado or hurricane. A huge force of nature and can destroy almost everything in their path. In the warning stage before the storm we are given instructions on our best options to survive the storm. We then prepare as best we can so we have the best chance to survive the storm. Some are better prepared than others. Some have better support systems around them than others. We all do what we can with what we have at the time given, before the storm hits.
Then the storm hits and we are all in it. No one is exempted. We are in the storm as long as it lasts. In this time crises control becomes a norm. The extent of the crises in your environment is dependent on your preparation. Some are better prepared than others, yet we all weather the same storm.
Then suddenly the storm has past, leaving bare the destruction it caused. Again the damage done differs from area to area. Now what?, we ask as we look at the destruction. We pick up the pieces and start rebuilding our lives, business and properties. Some need to fix a roof, another rebuild his entire house. The extent of the damage differs from house to house, yet this is not the issue. Our attitude and our preparation before the storm hit us is the THING.
Bill Gates, in his tenure as CEO of Microsoft, ask the question:
What is the worst thing that can happen in the next 30 days? Once he knew the answer, he prepared for exactly that. He was not right all the time. Yet he was best prepared to weather a storm as it hit.
For now, we rebuild and prepare for the next storm, because it is on its way. At KVV we are richer because of our experience on how to weather a storm. We know we are better because of what we learned. We know that to surrender the outcome to God is key. We know that preparation is important. We do the work to prepare, yet we surrender the outcome. The outcome is: all things works out for the good to those who believes in Jesus.
June 30, 2020
I once heard a story of a pride of lions who hunted and ate only buffalo. This was an enormous task and required the entire pride’s effort and skills to ensure this acquired taste for buffalo meat was met. They all pulled together and hunted like no other pride and ate like no other pride. Their combined strategy fed them the meat of their choice for a while, but only for a while… Because the entire pride had to be involved with this enormous task of hunting such large animals, they neglected some of the other vital aspects of being a lion. Such as, tending to their young, reproducing young, and protecting their land. This unique and special pride of lions eventually died out and was no more. They will be remembered as the pride who dared to do what no other pride has done, but it cost them their lives and the existence of their pride.
In business and in our entire life, we must strike just the perfect balance when it comes to the big fish, at the right time, at the right cost, vs those delights that steals our focus and side-tracks us from our essential, fundamental roles.
To have buffalo meat occasionally could have been enough, but the lust for ONLY buffalo cost them their lives.
We can and should go for the big wins, the audacious goals, the “unlike any other” dreams, but we should never lose sight of the foundational truths and tasks that are required to sustain us.
Chase the buffalos but be careful at what cost you do it!
Diaan Van Wyk | Director
May 21, 2020
The winter is definitely here. Days are shorter, nights are longer and the cold is creeping in under skins. Personally I am not a big fan of winter. I feel I am much more productive in summer, especially late afternoon and early morning. Partly because of the longer days and secondly because of the temperature drop. In summer one has loads of time to do things in and around the house before and after work, but in winter you just want to snuggle under a blanket.
One of the things I like least about winter is the outbreak of veld or bush fires. I have suffered from my sinuses since I was a child, and the smoke in the air from veld or bush fires always aggravates my sinuses during winter. However we all know that veld fires are important in our echo system. Scientists agree that the most important reasons for prescribed burning are to remove moribund or unpalatable vegetation and prevent or control the encroachment of undesired plants (farmers weekly).
This week as I was closing all the doors and windows in my house to try and keep out the smoke from the latest veld fire, it struck me that during the Lock Down we have all gone through, or are going through our own personal “veld fires”. The reality of the current situation, whether you are for or against it, has impacted all our lives indefinitely. Whether your fire has completely destroyed your livelihood and all the vegetation in your territory, or perhaps you were lucky to have the fire extinguished before it destroyed everything. Whether your fire is still roaming, or still on its way in the distance – all of us are experiencing the fire in one way or another.
I am not in any way trying to justify the fires or diminish its effect, but I think we can take hope from this parable. If we look at nature and the devastation a veld fire can leave, the veld can look dead and lifeless afterward. However, if you pass by the same field a few weeks or months later, and especially after the first spring rains, you will see the green of the new growth everywhere. Out of the ashes comes new life.
In times like these it is important for us to hope. To be able to see past our current circumstances and have faith that with the grace of God and our continued efforts to rise above our circumstances, we too will see the new life coming from the ashes.
Our prayers are with your during this time. Stay safe and healthy. Keep the faith and do not lose hope.
April 17, 2020
Gooday fellow lockdown citizens.
Three weeks of lockdown has come and gone. So far two more weeks to come. In the midst of a flood of information, and emotions, I wish to share a conversation about the meaning of the word Monk.
This story was told to me by Dr.Corne Bekker.
In early Christianity, Christians were referred to as Monks. (fancy that). In Greek or Hebrew (I cannot remember) it has two meanings:
Solitude and togetherness. Quite the opposites, is it not? Or maybe two poles of sameness.
Solitude is the state of being by yourself. Being alone. It is a verb, an action. A state of being busy with yourself, your thoughts. A perfect opportunity to learn to know yourself a little better. A time to grow yourself. Most importantly to learn to be comfortable with time alone with you, myself and I.
Togetherness the quality state of being together. Warm fellowship among family members. My eye catches the “QUALITY state of BEING”. It is an action taken by individuals of being in fellowship with each other. Here we find opportunity to being part of community, family, and friends.
What is the link that brings the opposites together? Dietrich Bonhoeffer wrote that without solitude there cannot be quality of togetherness. It means that if I am comfortable with spending time alone in solitude, I then can contribute to community in a much more meaningful way. It help us to grow from being dependent on each other to being interdependent on each other. Solitude gives us the opportunity to grow our quality state of being together.
Let us join in solitude so we can enjoy being together on much higher levels than before lockdown. Our new world after lockdown is in need of exactly this.
Roy Kapp | Director
March 30, 2020
To have to address you in this trying time is certainly a very surreal experience.
In the light of the State of Disaster as declared by the President and the lock down from Thursday 26 March 2020 at midnight, we wish to advise as follows:
- KVV’s offices will close for the lock down period as from 16:30 on Thursday 26 March 2020
- As from Friday 27 March 2020 all our staff members will be working remotely from home.
- Our team will all be available on e-mail and will continue to work on our matters as far as the current state of affairs permits.
- Our Directors, Conveyancers and Public Relations Officers will be available on their cell phones to address any queries.
- No clients will be seen for signature during the lock down period in line with the rules laid down by parliament.
- We have been advised by the Deeds Office that they will close on Thursday 26 March 2020 at 12:00. Matters not registered by this time will therefore have to stand over until the lock down period is over.
- The Deeds Office is attempting to expedite matters that have been in the Deeds Office longer than 4 days in order to ensure that matters can come up on prep and register by Thursday. However we will be careful not to register matters where clients will have difficulty moving as a result of the lock down. We will communicate with our clients individually regarding the affected matters.
- Matters lodged recently that have not been in the Deeds Office for 4 days will unavoidably have to stand over for registration until after the lock down period. Should clearance certificates lapse in this time we will have to request updated clearance figures.
- The above will inevitably result in delays in the registration of transactions, however we will do our utmost to push matters forward as far as possible during the lock down time in order to mitigate delays to the minimum.
- Our team is committed to stand together and keep our clients updated during this period.
This is a challenging time for our country. However, the safety and health of our staff members and clients remain our first priority during this time and therefore we fully support the decision of our president.
In standing together as one nation we can triumph over this disaster.
We will keep all our clients, business partners, family, staff and friends in our prayers.
Stay save, stay healthy and take care of yourselves and your families.
August 22, 2019
July 24, 2019
Henry Miller once said: “One’s destination is never a place, but a new way of seeing things”. I was fortunate enough to be able to travel to Spain and Portugal recently. Only my second opportunity to fly over the big waters, and for sure a wonderful adventure! To travel is certainly a huge blessing. To see how other countries live, experience their culture, foods, traditions and way of living really broadens your horizons.
I can concur what Gustav Flaubert said: “Travel makes one modest. You see what a tiny place you occupy in the world”. But I can also honestly say that the tiny place we occupy in the world, the little southern corner of Africa, is home. On the long flight back I thought a lot about the negativity that is being distributed to us daily in the media and social media. However when you experience other cultures you realize a few things about South Africans. Firstly, we are a friendly nation. People in South Africa greet each other with a genuine smile and friendliness. We are a helpful nation. As tourists we were taken aback sometimes on how people refuse to accept our help. Then you realize this is how we are raised. The “ubuntu” principle of compassion and helping others is part of our DNA. We are also a very tolerant nation when it comes to language barriers. Since we know that for most of us English is not our mother tongue, we tend to try to understand and communicate with each other. In other parts of the world, things are so different. And we have good coffee in SA!!
Landing back in South Africa the first thing I noticed is how friendly people were greeted at customs, how people are greeting passers-by, how friendly the waiters and shop stewards are, and how people are helping each other in their daily activities. After being able to easily order my delicious South African take away coffee at a restaurant, with the waiter smiling and fully understanding my order, I returned home with a thankful heart and a huge smile on my face.
Travel is amazing and such a wonderful blessing. But Lin Yutang was so right in saying: “No one realizes how beautiful it is to travel until he comes home and rests his head on his old, familiar pillow”.
Mariëtte van Zyl | Director
January 28, 2019
Chase your dreams; the sky is the limit; be the best version of yourself; the world is your oyster; – these are sayings that we often use at the beginning of a new year to motivate others and ourselves. Yet, we tend to be in similar situations year after year!
Trust you enjoyed the festive season with family and friends and our best wishes for 2019! What will make this year different? I believe that the answer is simple – choice!
We can say and recite the most beautiful quotes and update our status with them as much as we like, if we don’t choose to live them, it will be in vain. Small daily actions will make the HUGE difference at the end!
Our goal for 2019 is that we will truly make an impact and leave footprints worthy to follow. Choose what you want to be a master at and deliberately act on it!
May 2019 be legendry, remarkable and memorable!
Diaan van Wyk | Director