Proper knowledge is necessary when dealing with wills and powers of attorney

Understanding the importance of expert advice when drafting a valid power of attorney and executable will may save you time and money.
Several applications have been made to have handwritten, unsigned notes or emails declared as a valid will. Image: Shutterstock

Very few people realise that if they become incapacitated – either mentally or physically – no one is allowed to deal with their assets or investments on their behalf. The South African legal framework does not provide for the concept of an enduring power of attorney.

Ian Brink, national chair of the Fiduciary Institute of Southern Africa (Fisa), says in South Africa power of attorney (special or general) is given by a person to someone who is competent to manage their affairs. However, it lapses when the person is no longer able to revoke it.

In other countries, such as Australia, an enduring power of attorney is a legal document that allows you to appoint someone to make decisions for you during your life time if you no longer have the capacity to do so.

Different powers of attorney

As with the drafting of a will, Fisa advises people to appoint a competent person to draft the power of attorney. A general power of attorney will be more applicable for people who are no longer able to deal with their day-to-day affairs either due to old age or being bedridden, but who are still able to revoke the power of attorney. A special power of attorney deals with legal and financial decisions such as those around their share portfolio or asset management.

Brink says although SA does not have an enduring power of attorney option, there are ways to deal with circumstances where the power of attorney lapses.

One such option is to approach the high court to appoint a curator to manage the affairs of someone who is no longer of sound mind or becomes incapable of managing their own affairs.

This, however, is quite a costly process and in many instances a ‘curator lite’ may be an easier and more affordable route. Brink says in this case the court appoints an administrator such as a close family member to deal with the day-to-day management of someone’s affairs.

The curator or administrator is able to handle someone’s affairs, which may endure until the person passes away and the executor of the estate steps into their shoes.

A valid will

It is at this stage that one of the most important documents that a person signs in their lifetime takes centre stage.

Brink says the Wills Act is quite specific about how to draft a valid will. The act is read in conjunction with the Electronic Communications and Transactions Act, which regulates the method in which one can transact.

This act specifically states that the usage of data messages as a method to execute a valid will is strictly prohibited.

In other words, electronic wills are not accepted as a valid will.

The Wills Act prescribes that the will must be:

  1. In writing or type written (it cannot be verbal)
  2. It must be signed by the testator with an initial on each page and the full signature on the last page;
  3. The will must be attested by two competent witnesses, in other words they must be 14 years and older, and they must be able to present themselves in court as witnesses. They must sign in the presence of the testator and each other.

Brink says there are several cases where applications were brought to court to have handwritten, unsigned notes or emails declared a valid will.

The Wills Act does provide for such an application under Section 2(3); however, Brink warns that these applications come with a myriad of problems.

In one case, Dryden v Harrison and others, an application under Section 2(3) requested the court to accept an e-mail message by the deceased as his last will and testament.

The deceased was married and left his estate to his wife, however, they got divorced in 2011 and he died in 2016. His 2006 will was handed in as his last will and testament.

He sent an email shortly before his death to a sibling leaving his estate to her (his sister) in the first instance. She brought an application to have the email declared a valid will. The court dismissed the application and found that the email lacked the compliance-required formalities for it to be deemed a will.

“We still have to comply with the requirements of the act. Section 2(3) will only apply in cases where it can be proven that it was the clear intention of the testator,” says Brink.

An executable will

Brink also notes that a valid will is not necessarily an executable will. He warns that without proper knowledge in drafting a will, things will go wrong.

He refers to the Raubenheimer v Raubenheimer case where the testator made use of the services of his financial advisor to draft his will and it ended up being disputed.

The judge was quite vocal and said it was “a never-ending source of amazement that so many people rely on untrained advisors when preparing their wills, one of the most important documents they are ever likely to sign”.

Other examples of court cases relating to executable wills include Estate Late E I Williams and others v Hendricks and another and Osman and others v Nana N.O and another.

Brink says appointing a specialist in the fiduciary field may prevent family feuds, disappointment and a waste of time and money.

You can visit Fisa’s archive of fiduciary-related court case summaries here.

Brought to you by the Fiduciary Institute of Southern Africa (Fisa)

Moneyweb does not endorse any product or service being advertised in sponsored articles on our platform.

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Some of the major players in the “fiduciary field” in SA are almost non functioning at present.

At Nedgroup Trust most of their people have left. The counrty manager, the Gauteng Manager, the executor involved in my case, even the administrator. To get a tax clearance certificate has been going for 9 months now on a very simple estate. These people have no clue. Money has also been paid out of the estate late account without there being an appointed executor except me who had no knowledge of the transactions.

Oh and if you think your will is with Old Mutual Trust. Hahahaa. Think again. That is just a shelf trust owned by Nedcor to get Old Mutual clients that are at other banks. Call OMT and the call is answered by Nedcor Trust. The Nedcor people just change the logo when you ask about it. After a week or two its back to normal. The biggest scam out in the industry and nobody has ever queried it?? They steal BILLIONS from people that has no intention to EVER have Nedcor deal with their last will and testament.

Maybe Money web can look into it. It is on the Nedcor website that Old Mutual Trust is a subsidiary of Nedcor with 100% interest.

In my case the person was a lifelong Barclays/FNB client that never ever not once had any dealings with Nedbank. He was an Old Mutual client and was made to believe that Old Mutual will look after his interests.

FISA should know this??? Maybe its common in the industry??

Yes, it is indeed very challenging times, even for the fiduciary industry. All dealings with financial institutions and the different government departments take much longer than we were use to in the past. Backlogs at the offices of the Master of the High Court, the various Deeds Offices, the SARS and so on, are all a direct result of the unintended impact of Covid-19, whether we like it or not. Administrative processes have largely come to a halt, although there are, as always, those institutions and offices who pride themselves in their work and are still prepared to go the extra mile.

I hear you. With Nedcor it seems their troubles are not covid related. The internet is littered with complaints from people about the same sort of thing.

A 71 year old lady complained about being out of cash as this lot has been busy with her late husbands account for 5 years now. 5 YEARS!!

They have now (recently) decided to subcontract it to someone. This someone can do nothing as they are WAITING for Nedcor to sign a piece of paper.

With Nedcor and Old Mutual there is no covid excuse. To them a useless culture is acceptable.

When my mother became incapacitated I took her to her bank, we signed a few papers and I was able to manage her finances up to the point when she passed away.

Yours was a practical, but very dangerous approach. If her incapacity was mental and not physical, the papers she signed at the bank was not valid and worthless. Any actions taken by you on the strength of those papers would also be invalid. If all interested parties were happy and remained happy with whatever action you took on her behalf, everything is under control However, should any interested party raise objections after her death, things could very easily spin out of control. We are in desperate need of legislative reform in this area, but a draft bill about this has been languishing in the legislative process for the best part of thirty years now.

Wow. Not sure I would state this on a public forum. Wow.

Did you have to hold the pen for her? Wow.

End of comments.

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