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:
- In writing or type written (it cannot be verbal)
- It must be signed by the testator with an initial on each page and the full signature on the last page;
- 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)
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