By Kevin O’Reilly

The Law Society of South Africa’s (LSSA) Deceased Estates, Trusts and Planning Committee (the Committee) met on 6 June 2024 to discuss various matters within its field of expertise. Some of the topics considered were the following:

Performance Plan Statistics and Reports

The Committee had requested the previous Acting Chief Master at the Justice Parliamentary Portfolio Committee meeting that the statistics should be published on the Department of Justice and Constitutional Development website on a continuous basis. The Committee noted they will need to follow this up with the new Acting Chief Master. They noted the underlying documents should be examined to determine how the statistics are computed. Another issue considered was the problem of receiving SMSs to notify that letters of executorship have been issued.

Appointment of independent trustees

The Committee noted a revision of Chief Master’s Directive 2 of 2017 was still being awaited. The Committee considered the LSSA again addressing the Acting Chief Master on this issue and asking for a response. The Committee noted there are certain measures that need to be complied with – that come from the Land and Agricultural Development Bank of SA v Parker and Others 2005 (2) SA 77 (SCA) case – but the point is that there is a much deeper-rooted solution in the form of the Turquand rule finding application to trusts, which is not the case at the moment.

Security for estates administered in terms of s 18(3)

The Committee queried whether there was some difficulty regarding furnishing security in respect of s 18(3) estates. It was noted that a meeting with the Acting Chief Master was held recently where this issue was raised. The Committee said there was a vagueness on the issue, and they have a duty towards the broader community to get clarity on it. It was noted that Chief Master Directive 9 of 2023 makes a distinction between Letters of Executorship and Letters of Authority required for s 18(3), which makes no reference of security. It would therefore be ideal if the Chief Master could update or supplement Directive 9 of 2023 with a clear view. The Committee outlined two potential approaches. The first is to submit the Committee’s analysis to the Acting Chief Master and request a Directive from her. The second approach involves consulting the Acting Chief Master from an interpretative standpoint; however, this is unlikely to succeed due to the ambiguity involved. Therefore, it may be necessary to amend the Administration of Estates Act 66 of 1965. The Committee resolved to send the analysis to the Acting Chief Master for her response.

Regarding Directive 9 of 2023, the following sections were highlighted:

• ‘Purpose’ states the Directive is issued in terms of Judicial Matters Amendment Act 22 of 2005, which, in the Committee’s view, was not correct because that was just the Act that facilitated the amendment. The actual amendment is in the Administration of Estates Act itself, because that Act has now been amended.
• ‘Lodgement of documents’ states: ‘All documents which are to be commissioned … all pages also signed by the commissioner’. This is incorrect because annexures are never signed by the commissioner.
• ‘Pre-deceased spouse’ states: ‘If it is indicated on the death notice that there is a pre-deceased spouse, it must be ascertained from the pre-deceased spouse’s estate if he/she died testate or intestate and, if testate, whether the will in that estate has any effect on the administration of the estate in question’. The Committee asked whose function this was, whether this was Master’s function or the executor’s function.
• ‘Nominations’ states: ‘Electronic copies of nominations may be lodged with the Master, but the executor is expected to keep the originals of all such electronically lodged documents in their records …’. The Committee noted that nominations may come from people that live in different provinces, beneficiaries may be overseas etcetera, therefore there should be some sort of dispensation for acceptance of electronic copies.
• ‘Inspection period for accounts’ states: ‘Should the inspection period have expired, and the Magistrate has not forwarded the endorsement or certificate to the Master within a reasonable time, it is the duty of the executor to enquire from the Magistrate as to the whereabouts of the certificate and lodge same with the Master.’ The Committee believed this to be an unreasonable request. The magistrate communicate with the Master’s office; therefore, it is unrealistic to expect the executors to now start communicating with the magistrate.

The Committee resolved to circulate the proposed amendments for comments, and once accepted to submit to the Acting Chief Master.

Power of attorney

The Committee observed that South Africa is lagging behind the rest of the world in terms of enduring powers of attorney. It was noted that the LSSA has taken up this issue with the South African Law Reform Commission who advised that it had completed its mandate, and the responsibility now lies with the Minister. The Committee resolved to send a letter to the Acting Chief Master to get her support on the matter.

Relationship with deposit taking institutions

Practitioners are experiencing problems with deposit taking institutions especially regarding the turnaround time of certification of documents. It was noted a meeting will be held with the Banking Association of South Africa (BASA).

Report on meeting with South African Revenue Service

The Committee queried whether the South African Revenue Service (Sars) has a reference manual on deceased estates which is binding on Sars. It was noted that there are information packs on the Sars website, which had been circulated but they would have to be looked at to see if they are up to date.

It was also emphasised that training sessions on deceased estates are essential, as they significantly differ from standard income tax matters. It was also proposed to look at joint training between the LSSA’s Legal Education and Development (LEAD) division and Sars. This training should include practical examples of how to do things. Providing a joint webinar or video was also suggested. The matter will be followed up.

Access to files being stored at the Veritas off-site storage facility

The issue of access to files being stored at Veritas is of great concern. The Master’s offices cannot get access to the files and therefore practitioners cannot get certified documents to proceed with the matter. The Committee resolved to contact the Acting Chief Master to obtain information on the storage locations, the number of files stored, and the specific offices responsible for storing these files to determine what the access problem is. The Committee considered whether the issue of files only being available on certain days, as seen in the Cape Town office, could be addressed by invoking s 5 of the Act, which states, ‘any person may at any time during office hours inspect any such document’. It was decided that the issue could be raised again at the next meeting with the Deputy Minister.

General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022

It was noted that the General Laws Amendment Act effected several amendments to the Trust Property Control Act 57 of 1988, specifically the insertion in s 1 of the definition of ‘beneficial ownership’ and the concept of ‘beneficial ownership’ in s 11A. The Committee considered the recommendations in the Tydskrif Vir Die Suid-Afrikaanse Reg journal article by F du Toit, B Smith and L Janse van Vuren. It was suggested that the Committee enquire whether there was an intention to rewrite the Trust Property Control Act and, if this is the case, to offer the services of the profession.

General

The Committee also noted the importance of keeping an open line of communication with practitioners, encouraging them to share any issues. Additionally, seminars should be presented through provincial associations to educate and inform practitioners with the aim to raise awareness about the Committee and ensure practitioners know they can submit their issues to it.

Kevin O’Reilly MA (NMU) is a sub-editor at De Rebus.

This article was first published in De Rebus in 2024 (August) DR 20.