PVL 2602 LAW OF SUCESSION - Summary Notes

PVL 2602 LAW OF SUCESSION – SUMMARY NOTES 1 GENERAL INTRODUCTION TO THE LAW OF SUCCESSION When a person dies he or she leaves behind not family/friends but more importantly for our purposes rights and duties that have to be finalized. The law of succession deals with the finalization of the debt and assets the deceased leaves behind. Law of succession: a branch of private law. The law of succession comprises those legal rules or norms which regulate the devolution of a deceased person’s estate upon one or more persons. Thus the law of succession is concerned with what happens to a deceased person’s estate after his death. The testator’s estate consists assets and the liabilities he had at the time of his death. Estate thus consists not only of assets but also of any debts that the deceased had incurred before his death. Testator’s beneficiaries inherit only the assets; his liabilities do not devolve. Liabilities form part of the estate Key Secession terminology: a. Deceased – is the person who has died and left behind an estate b. Estate – a testator’s estate consist of both the assets and the liabilities he had at the time of his death. The estate therefore consists not only of assets but also of any debts that the deceased had incurred during his lifetime c. Executor: the person who administers the estate of a deceased. d. Residue of the estate: that part of the deceased’s estate which remains after the payment of funeral expenses, administration costs, tax, the deceased’s debts and the legacies. e. Repudiation: heir or legatee refuses to accept a benefit from a deceased’s estate (must repudiate expressly). f. Adiation: When a beneficiary accepts a benefit from a deceased’s estate (assumed). g. Legatee: inherits a legacy which is a specific asset or a specific amount of money h. Heir: inherits the residue of the estate. i. Inheritance: when the property which is left behind must go to an heir. j. Succession: the devolution of the deceased’s estate Succession may take place in one of three ways, namely: a. by virtue of a will (testamentary succession) b. by virtue of the law (intestate succession) c. by virtue of an ante nuptial contract Typical exam questions: Define the law of succession. (2) The law of succession is a branch of private law.(1) The law of succession comprises those legal rules or norms which regulate the devolution of a deceased person's property upon one or more persons.(1) Thus the law of succession concerns itself with what happens to a deceased person's estate after his/her death.(1) 2 Distinguish between an "estate" and the "residue of an estate". (4) The testator's estate consists of the assets (½) and liabilities.(½) The residue of the estate refers to that part (½) of the deceased's estate which remains after the payment of funeral expenses,(½) administration costs,(½) tax (½) (if any), the testator's debts (½) and the legacies.(½). (4) General rules or requirements (with exceptions) that must be fulfilled before the rules of succession can come into operation: 1. The testator must have died. Moment of death Moment of death not certain in SA law: problem is whether death should be defined as the termination of both heart and brain activity, or whether brain death is sufficient. S v Williams indicates that brain death may be enough. Three exceptions to the rule that a person must be dead before succession can occur: 1.1 Presumption of death The first exception to the rule that a person must be dead before succession can occur is where a court pronounces a presumption of death and makes an order for the division of the estate. Those who allege that a person is dead have to prove it. High Court may grant an order presuming the death of a person upon which his estate can be administered. Cases: Re Beaglehole 1.2 Persons who die in the same disaster Commorientes: several people lose their lives in the same disaster. Rule: if it cannot be established beyond doubt who died first, no presumption of either simultaneous death or of survival exists. Thus courts will find that commorientes died simultaneously. Cases: Ex parte Graham, Ex Parte Chodos Greyling v Greyling. Examples of commorientes Xavier and his daughter Brenda die in a plane crash in which there are no survivors. In terms of Xavier's will, his son Casper is his only heir. Xavier's estate is only worth R100. In terms of Brenda's will, Xavier is her only heir and Brenda was wealthy. If Xavier died after Brenda and could first inherit from her, Casper, who inherits from Xavier, is in a favourable position. Casper would want to prove that Brenda died before Xavier. If Xavier and Brenda died simultaneously and on impact, Xavier cannot inherit anything from Brenda as he was not alive on Brenda's death. 3 Typical Exam Questions: Read the following set of facts and then answer the questions that follow: Mary and John are siblings. In his will John appointed his sister Mary to inherit his whole estate. In her will Mary appointed her husband Peter to be her heir. Mary and John are killed in the same car accident, and no evidence exists as to who died first. John leaves behind both his parents. Mary leaves behind her parents and her husband Peter. (a) Who will inherit John and Mary's respective estates? Briefly explain your answer. (7) When two people die in the same disaster and it is not possible to establish who died first, the court will find that they died simultaneously.(1) Ex parte Graham (1) held that in our law no presumption as to the order of death exists.(1) That means that two persons who die in the same accident, cannot inherit from each other, because one has to survive a person to be able to inherit from him/her.(1) John’s will cannot be given effect to because Mary cannot inherit from him.(1) John’s estate will therefore devolve in terms of the law of intestate succession (1) and his mother and father will inherit his estate. (1) Mary is survived by her husband and he will inherit her estate in terms of her will. (1) Would it have made a difference to your answer if John died at the scene of the accident and Mary died two hours later in hospital? Briefly explain your answer. Yes. If Mary survived John, she would have inherited John’s estate as indicated in his will (1), and her husband would then have inherited both her and John’s estates as John’s estate would have formed part of her estate. (1). John’s parents would then not have inherited. (1) (3) 1.3 Estate Massing Exception to the rule that a person must be deceased before succession can take place: When two testators, in a joint will, mass their separate estates, or part of their estates, and jointly make provision for the disposition of the massed estates as a single unit. The joint will disposes of the surviving testator’s assets, and this disposition comes into operation on the death of the first-dying testator although the surviving testator is still alive. 2. There has to be a transfer of rights and/or duties with regard to the estate and/or the status of the deceased depending on the nature of the succession rules (common law or customary law). 3. At the time of dies cedit, the beneficiary has to be alive or have been conceived. 4. The beneficiary must be competent to inherit. 1.2. INTESTATE SUCCESSION The law of intestate succession in general is regulated by the Intestate Succession Act 81 of 1987. The law of intestate succession identifies the heirs to a deceased estate when the deceased has failed to regulate the devolution of his or her estate by will or antenuptial contract, or where it is impossible to carry out the wishes of the deceased because the beneficiaries are unable to inherit, do not wish to inherit or are predeceased. It is possible for a person to die completely intestate or only partly intestate.