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Bregman Moodley Attorneys

Ours is a boutique law firm that focuses in the following practice areas: •Adoption •Commercial contracts •Conveyancing and notarial work •Divorce mediation •Family law •Labour law •Insolvency, Liquidation and Rehabilitation •Wills "Patient, honest and kind (what you don’t expect from a lawyer), while extremely knowledgeable; I trust him - both with our security, and our case. If you need a lawyer in the Johannesburg area, I can’t stress enough how great Roy Bregman of Bregmans is." - Nathaniel Stern
Bregman Moodley Attorneys
Bregman Moodley AttorneysWednesday, April 26th, 2017 at 8:04am
Freedom of testation

Can I choose who to benefit in my will?

In South Africa, a person can leave his or her assets to whoever he likes, with few limitations. This is called “freedom of testation“. If a person dies with a valid will, he or she dies “testate”, and without a valid will, he or she dies “intestate”.

Testate succession

An executor (the person appointed to wind up the estate) must carry out the wishes of the testator (the person making the will) as far as legally possible. The freedom of testation is limited by the common law in these situations:
• A provision in a will shall not be executed if (a) it is generally unlawful, (b) against public policy, (c) impracticably vague, or (d) impossible; and

• The estate is obliged to support any minor and financially dependent children.

There are certain acts that limit the testator’s freedom to choose his beneficiaries in his will, e.g.

• In terms of the Pension Funds Act, the deceased can’t choose who to benefit. The decision will be up to the pension fund administrators;

• A surviving spouse (who has been excluded from the will) may have a claim against the estate for maintenance in terms of The Maintenance of Surviving Spouses Act;

• If the testator disinherits his wife, and they are married with the accrual system, the wife has a claim against his estate for ½ the difference between the accruals (if her estate is the smaller of the two).

Intestate Succession

If a person dies without a will, his or her estate is wound up in accordance with the Intestate Succession Act.

This is not a detailed exposition of the law but a mere synopsis. Contact your lawyer for comprehensive advice.
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Bregman Moodley Attorneys
Bregman Moodley AttorneysMonday, April 24th, 2017 at 3:03pm
The effect of no-interest loans to trusts

One way of avoiding estate duty and donations tax is to sell an asset to a family trust for a market related value.

The rationale is to freeze the growth of the assets in the taxpayer’s estate for estate duty purposes. The income tax benefits would accrue to the beneficiaries of the trust after the death of the taxpayer, as the income received by the trust and distributed to them would be taxed in their own hands at their respective tax rates.

Where the problem arises, for SARS, is that the selling price of the asset is usually payable, interest-free, on loan account. Following the sale of the asset, the purchase price due by the trust is reduced every year by the taxpayer waiving R 100 000 of the loan. This waiver would be exempt from donations tax and no CGT implications would arise for the trust, the debt would be reduced by way of a donation.

To close the us gap, section 7C was introduced to the Income Tax Act to address situations where assets are disposed of to a trust on interest-free (or very low interest) loan account. The effective date is 1 March 2017, and provides that where there is an interest-free loan or a loan which is repayable at an interest rate below the official rate (currently set at 8%), the difference between the set interest rate (usually 0%) and the official rate (namely 8%) is regarded as a donation which will attract donations tax levied at a rate of 20%.

One effect of the application of section 7C would be that any interest forgone by the taxpayer in respect of the interest free or low interest loan would be treated as an ongoing and annual donation to the trust. The good news is that natural person (or a company that is a connected person in relation to that natural person), are not precluded from employing the annual donations tax exemption of R 100,000.00 donation to the trust. If an individual donates R 100,000.00 or less, section 7C will not be applicable and no interest will be deemed to have accrued to the individual.

For larger donations, the effect may be to neutralise the historic estate planning structures.
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Bregman Moodley Attorneys shared a link.Tuesday, April 18th, 2017 at 6:00pm
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Bregman Moodley AttorneysThursday, April 13th, 2017 at 3:41pm
Body corporate cut off electricity.

The Body Corporate switched off a client’s electricity, because he fell into arrears with his levies. He asked me what steps he could take to have his electricity switched back on.

I advised: I would suggest that you have a look at the conduct rules of your body corporate. I would be most surprised if they allow the trustees to have acted in the way they have done.

If the conduct rules don't allow the trustees to cut off your electricity, you have two options. The first is to pay the amount that they claim, under protest, and then refer the dispute to the ombudsman:

The Sectional Title Ombudsman

1st Floor Building A, 63 Wierda Road East, Wierda Valley, Sandton
T: +27 (010) 593 0533 │F: +27 (010) 590 6154 │
www.csos.org.za

This is a very recently appointed office and I have no idea what kind of response you will receive or how long the process will take. However, it will not cost you anything but time and effort.

Your second option is to go to your closest Magistrate's Court to see if they assist people in your position to obtain what is called a spoliation order (to restore the electricity on a basis of urgency). Some courts do assist, without charge. If they won't, you will need to approach an attorney for help.

If you can’t afford one, get help from the law clinic at your local university, the Legal Aid Board or check out www.probono.org.za
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Bregman Moodley AttorneysWednesday, April 5th, 2017 at 6:00am
Common law marriage in South Africa

A client asked me how long a couple must live together, before they are regarded as being in a common-law marriage.

Common-Law marriage
In South African law, there is no such thing as a common-law marriage, no matter how long a couple may live together. Their cohabitation does not create any automatic legal rights and duties between them. This is a common misunderstanding.

Cohabitation Agreement
In an age when most marriages fail, parties with a trail of prior relationships and marriages behind them may prefer to live together, rather than marry. Same-sex or heterosexual partners who choose not to get married should sign a domestic partnership (also called a life partnership or cohabitation) agreement to protect them should their relationship end. It is cheaper than ending up in court!

A widely-used definition describes “domestic partners” as “two adults who share an emotional, physical and financial relationship like that of a married couple but who either choose not to marry or cannot legally marry. They share a mutual obligation of support for the necessities of life.”

Cohabiting couples do not have the same rights as married couples under the law, so it makes sense to set out at the outset of the relationship what the division would be if the cohabitation breaks down.

The life partnership agreement will provide for such things as:

• Movable property: Provide for a fair division of household goods on dissolution. A good idea is to list the respective assets of the parties at the start of the relationship and agree whether or nor not these become joint assets. Similarly, keep a register of assets acquired during the relationship and agree whether these too become joint assets.

• Immovable property:
a. Who owns the home that you live in? If it is co-owned, deal with the proportion of your respective shares and who gets what, on dissolution.
b. If it is solely owned, you may consider compensating the non-owner for improvements done to the property at his or her expense.
c. If the common home is leased property, provide for who stays on when you part company.
• Financial arrangements:
a. During the relationship, will you operate a joint bank account? Who will pay the household and living expenses? Who will own cars and other assets? Who will enter into credit agreements? Will you take out life insurance on each other’s lives?
b. When the relationship ends who pays the debts of the partnership?
• Children: If you have or intend to have children, agree whether one partner is to support the other party during the relationship if such a partner is unemployed or staying home to care for small children born from the relationship.

Universal Partnership Agreement
If parties live together but don’t conclude any form of agreement regulating their respective legal rights and obligations, on dissolution of the cohabitation, a party that feels he or she is entitled to something from the other party (who disagrees), must go to court, at some expense, to prove that entitlement. To do so, the party must prove they were in a ‘Universal Partnership’, so that one party is entitled to certain property and assets of the other party, on separation.

Because the existence of a universal partnership is difficult to prove, it makes sense to conclude a life partnership agreement.

If you did not, and need to approach a court to prove the existence of such a partnership you must show that:
• The aim of the partnership was to make profit.
• Both parties must have contributed to the enterprise.
• The partnership must operate to benefit both parties.
• The contract between the parties must be legitimate.
• There must be valid consent.
• There was an intention to create a legally binding partnership agreement.

If a party cannot prove the existence of such a partnership, he or she may walk away with nothing, even if the parties lived together for years.
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Tel: +27 (0)11 646-0335
Email: info@bmalaw.co.za