The commercial world is currently moving to greater levels of digitisation. Organisations are implementing automated and electronic solutions in an effort to improve efficiency and better the environmental footprint at the same time. The move to digitisation and electronic signatures prompted questions surrounding the legality of these documents. This article aims to highlight certain legal aspects of electronic signatures in both a general business environment and an audit industry environment.

Different types of electronic signatures

The Electronic Communications and Transactions Act, 25 of 2002 (ECTA) differentiates between standard electronic signatures and advanced electronic signatures. Standard electronic signatures include digital or scanned signatures. An example would be using an iPad to sign a document or merely printing, signing and scanning the document. Advanced electronic signatures are defined as electronic signatures which results from a process which has been accredited by the Authority as stipulated in Section 37 in the ECTA, for example, Quicklysign.

Standard electronic signatures are sufficient in most instances if and when the method of signing had not been agreed upon by the parties beforehand. Advanced electronic signatures are required for a suretyship agreement as well as signing as a Commissioner of Oaths (Section 18 of ECTA). Some documents are specifically excluded from being signed electronically (as per Schedule 2 of ECTA) for example:

• an agreement for alienation of immovable property;
• an agreement for the long-term lease of immovable property in excess of 20 years;
• the execution, retention and presentation of a will; and
• the execution of a bill of exchange as defined in the Bills of Exchange Act, 34 of 1964.

Electronic signature of financial statements

Stakeholders in the audit industry will be all too familiar with the challenges being posed by printing various sets of financial statements, only to be scanned again after signature. The industry seems to be one of those that will benefit from the efficiencies provided by electronic signatures but are these electronic signatures on a director’s and auditor’s report acceptable?

The Independent Regulatory Board of Auditors (IRBA) identified the increase in usage of electronic signatures on financial statements and audit reports and reported on the matter through the 2017 public inspections report. IRBA communicated that the following challenges are experienced by the practice of electronic signatures:

• uncertainty as to the identification of the final version of the auditor’s report and annual financial statements;
• uncertainty as to the approval by the company’s board of the exact final version of the annual financial statements; and
• the risk that the incorrect annual financial statements are published.

We are of the opinion that an advanced electronic signature service provider, as approved by the ECTA, will sufficiently mitigate the above-mentioned challenges identified by IRBA.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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I gave instructions to my attorney to prepare a last will and testament for me as my will no longer reflected my wishes. At my request, my attorney emailed the will to me with clear instructions as to how I should go about signing it. I asked my neighbours to act and sign as witnesses. My neighbours signed the will on all the pages and left before I signed. I then signed the will on all the pages. I am now worried about the validity of my will as the email from my attorney states that I have to sign the will in the presence of two witnesses. Is my will valid?

The formalities for the valid execution of a will are set out in the Wills Act. Section 2 of the Wills Act, Act 7 of 1953, reads: “No will executed… shall be valid unless the will is signed at the end thereof by the testator… and such signature is made by the testator… in the presence of two or more competent witnesses present at the same time and such witnesses attest and sign the will in the presence of the testator and of each other…”. Therefore, in order for a will to be valid, it has to be signed in the presence of two independent witnesses, both witnesses being present when the will is signed by the testator. The two witnesses signed your will in the presence of each other, but not in your presence.

A similar set of facts presented itself in a court case recently heard by the Gauteng Local Division of the High Court. In this matter, the two daughters of the deceased, who lost out on their inheritance in terms of the will of their father, claimed that it was never their father’s intention for his much younger lover to inherit his total estate. The testator was 85 years old at the time of his death and he had been living with a woman 38 years his junior for 8 years.

The deceased executed two wills during his lifetime. One on 6 November 2011 (“the 2011 will”) and another on 7 January 2014 (“the 2014 will”). The 2014 will was signed shortly before his death leaving the bulk of his estate to his much younger lover. The daughters of the deceased claimed the 2014 will was invalid as there were “suspicious” circumstances. They claimed their father either did not sign the 2014 will himself or, if he did, that he lacked the mental capacity to execute a valid will by reason of dementia. The daughters of the deceased were not successful in proving that the deceased’s signature was a forgery despite the fact that three handwriting experts testified.

Another witness called to testify was a witness to the 2014 will. Her testimony focused on the circumstances surrounding the signing of the 2014 will. She signed the will as a witness. She testified that she and her husband met the deceased in the street. As they were acquainted they naturally engaged in social conversation. She and her husband were informed that the deceased was on his way to the police station to sign a will. She and her husband were asked if they would accompany the deceased in order to sign the will as witnesses. They were assured that the process would not take long so they agreed to assist.

She and her husband signed the will and immediately left. They were the first to sign the will. At the time they signed the will the deceased had not signed the will. They left before witnessing the deceased signing the will. Hence, the 2014 will was not signed by the deceased in their presence even though it reflects their respective signatures as witnesses.

The evidence assessed collectively established that the deceased signed the 2011 will and also that he signed the 2014 will. However, the 2014 will was signed by the deceased after the two witnesses to the will had already left and therefore was signed in their absence.

The court referred to Section 2 of the Wills Act in terms whereof no will is valid unless the signature made by the testator is made “in the presence of two or more competent witnesses present at the same time”. The court confirmed that this requirement is mandatory and, if not met, the will is not valid for want of compliance with a statutorily required formality.

The court therefore found the 2014 will to be invalid and, as there was no evidence that there was any irregularity in the execution of the 2011 will, the 2011 will was declared the will of the deceased.

This judgement of the High Court once again emphasizes the importance of complying with the Wills Act. Your will is invalid, and it is advisable for you to print the will again and to sign it in the presence of two competent witnesses or, even better, for you to make an appointment with your attorney in order to sign the will at his office. 

Reference List:

• Twine and Another v Naidoo and Another [2017] ZAGPJHC 288; [2018] 1 All SA 297 (GJ)
• Wills Act, Act 7 of 1953

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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• You have not acknowledged the debt in the past three consecutive years, either in writing or verbally.
• You have not made a payment or promised to make a payment toward the outstanding debt.
• You have not been summoned to make a payment by a creditor for the debt within the past three consecutive years. 

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You’ve viewed your dream home, but remember, you receive so much information during your viewing, that you could easily become overwhelmed and miss important details. Especially if you have fallen in love with your potential new home. It is important to remember that there are various “red flags” that you need to look out for before purchasing, as missing these “red flags” could have significant financial repercussions. Before signing, make sure to look out for the following:

1.Foundation and structural faults

What do you think is the most important part of a house? The double garage? The interior? How well-lit the rooms are? No. The most important part of the house, and arguably the costliest to repair, is the foundation of the house. Make sure to look out for large cracks in the walls, as this could be a sign of some serious structural problems with the foundation. Make sure to thoroughly investigate the door frames; if door frames don’t appear to be square or if the doors have difficulty closing, it could be a sign of structural problems.

2.Poor drainage/grading

In most cases, water problems in a house are directly related to poor drainage or grading. However, it is often difficult to detect if a house has poor drainage or grading. An obvious sign of the above-mentioned faults is pools of water or a bouncy bathroom floor which could indicate that there is a leaking shower drain. Make sure to also look out for overflowing gutters, water stains and cracks in the foundation.

3.Patches of fresh paint

A coat of fresh paint is an excellent and quick way to spruce up your home, but if there are random patches of fresh paint around the house, it could be cause for concern. Why? Because it is possible that the seller is trying to hide something beneath the coat of paint.

4.Faulty electrical wiring

If you are looking to buy an older home, make sure that the electrical wiring is not faulty, as house fires caused by faulty wiring is not as uncommon as we would hope. This is especially the case in older homes, as these homes don’t always have an ample supply of power and the number of electrical outlets like newer homes have. Also look out for any exposed wires, as this could cause significant harm to either the home or your family.

5.Neighbourhood condition

When looking for your perfect home, always remember that you are not only investing in the property itself, but also in the neighbourhood. Make sure to ask enough questions about the neighbourhood. For example, if you move into a neighbourhood that is deteriorating or crime-ridden, it could have a significant impact on your return on investment.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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There are three types of matrimonial property regimes in South Africa. The three are marriage in community of property, marriage out of community of property with the inclusion of the accrual system and marriage out of community of property with the exclusion of the accrual system. When parties decide on either of the two latter, they must enter into a contractual agreement with one another before a notary public. It is important to understand what they all entail before one gets married.

Marriage in community of property is the so-called “default” regime, because all marriages are deemed to be in community of property if an Antenuptial Contract is not concluded before the marriage. This is also the most popular regime because it is the easiest one to conclude. When two parties get married in community of property, their estates will be joined together. Every asset and liability each party had before getting married and acquires during the marriage will become one estate and on dissolution of the marriage, the estate will be divided equally between the parties.

This system is based on the theory that each spouse, whether employed or at home running the household, contributes equally to the marriage and on dissolution of the marriage is entitled to share equally in the joint estate. It is important to note that when one enters this type of matrimonial regime, in some instances consent will be needed from the other party. One of the biggest disadvantages of this system is that if one party incurs debt, the debt will form part of the joint estate.

When one enters into a marriage out of community of property with the accrual system, it means that the parties entered into a contractual agreement with one another, which is known as an Antenuptial Contract. This contract must be entered into before a notary public and has to be registered at the Deeds Office. In this regime, the two estates of the spouses before the marriage remain separate. No consent will be needed from the other spouse in order to handle his/her own affairs. The accrual system will be applicable at the dissolution of the marriage or upon death, whichever may occur first.

What happens with the accrual is that whatever the parties acquired during the existence of the marriage, will be compared and the half of the difference in accrual will be owed by the estate which shows a larger accrual. On dissolution of a marriage out of community of property with the accrual system, inheritances and donations received by a spouse from a third party will not be included in the accrual.

In a marriage out of community of property without the accrual system, each party’s estate will remain separate. This system enables parties to control their own estate and affairs independently and on the dissolution of marriage, the parties will retain their own assets and liabilities. It is important to note that even if parties are married out of community of property excluding the accrual system, both parties will have to contribute to the household as a married couple – it is one of the duties that arises from marriage.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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“survivor means the surviving spouse in a marriage dissolved by death.”

What can be claimed?

Section 2(1) of the Act determines as follows:

“If a marriage is dissolved by death after the commencement of this Act the survivor shall have a claim against the estate of the deceased spouse for the provision of her reasonable maintenance needs until her death or remarriage in so far as she is not able to provide therefor from her own means and earnings.

What is the definition of own means?

“own means” include any money or property or other financial benefit accruing to the survivor in terms of the matrimonial property law or the law of succession or otherwise at the death of the deceased spouse.”

What is reasonable maintenance means?

Section 3 of the Act determines as follows:

“Determination of reasonable maintenance needs – In the determination of the reasonable maintenance needs of the survivor, the following factors shall be taken into account in addition to any other factor which should be taken into account:

• The amount of the estate of the deceased spouse available for distribution to heirs and legatees;
• The existing and expected means, earning capacity, financial needs and obligations of the survivor and the subsistence of the marriage; and
• The standard of living of the survivor during the subsistence of the marriage and age at the death of the deceased spouse.”

The executor of the deceased estate has to take the requirements above into account when determining the amount of the claim against the estate.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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When a person dies, they leave behind an estate which includes everything they own. Estate Duty is payable on the estate of every person who dies and whose nett estate is in excess of R3,5 million. It is charged at the rate of 20%. Currently, SARS is responsible for collecting the Estate Duty of a deceased person.

How does an estate get reported to SARS?

Even if Estate Duty does not apply to you, it is still necessary to inform SARS that the person is deceased. It is recommended that you consult with a legal expert when going through such as process.

Copies of the following documents must be sent to SARS:

• Death certificate or death notice.
• Identity document of the deceased.
• Letters of Executorship (J238) (if applicable).
• Letter of Authority (J170) (in cases where the estate is less than R250 000).
• Certified copy of the executor’s identity document.
• Power of attorney (if applicable).
• The name, address and contact details of the executor or agent.
• The last Will and Testament of the deceased.
• An inventory of the deceased’s assets.
• The liquidation and distribution accounts (if available).

These documents may be sent to the relevant Centralised Processing Centres that is closest to the Master of the High Court where the estate is being administered.

How does Estate Duty work in relation to an inheritance?

All income received or accrued before the deceased’s death is taxable in the hands of the deceased up until the date of death, and will be administered by the executor or administrator acting as the deceased’s representative taxpayer.

• After the date of death of a person, a new taxable entity comes into existence – the “estate”.
• The assets of the deceased will be held by the estate until the liquidation and distribution account has lain for inspection and become final under section 35(12) of the Administration of Estates Act after which the assets will be either handed over to the heirs or delivered to the trustee of a trust estate.

References:

• http://www.sars.gov.za/TaxTypes/EstateDuty/Pages/default.aspx
• http://www.sars.gov.za/ClientSegments/Individuals/Tax-Stages/Pages/Tax-and-Inheritance.aspx

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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Whenever you buy or sell a house you will encounter the sale agreement

The agreement, or contract, is an offer by the interested buyer to the owner of a property. The buyer presents the offer to the owner, and if the owner accepts it, will sign the sale agreement in acceptance. This forms a binding contract.

What are the requirements for a sale agreement?

• The contract has to be in writing. You can’t get away with making a verbal agreement or contract.
• The agreement must be signed by both the buyer and the seller. If you are married in community of property, then you and your spouse have to sign the contract.
• All promises that either party makes should be included in the contract, in writing.
• If the buyer and seller have verbally agreed on changing something in the contract, it won’t be valid unless it’s put in written form and signed by both parties.

For assistance drafting a contract, contact us.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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All the powers of a trustee are ‘fiduciary’, which means that they must be exercised as follows:

• in the best interests of all the beneficiaries;
• only for the benefit of the beneficiaries and not for third parties;
• not for the trustees’ benefit, unless specifically authorised; and
• not to defeat the terms of the trust, but in compliance with them and in consideration of all other relevant circumstances.

DUTIES

A trustee owes a duty of honesty, integrity, loyalty and good faith to the beneficiaries of the trust. A trustee must at all times act exclusively in the best interests of the trust and be actively involved in any decisions. Prior to accepting the position of trustee, a potential trustee must ensure that:

• there is no conflict of interest between his or her own personal circumstances and those of the beneficiaries;
• they have read and understood the trust deed;
• they understand the nature of the beneficial interests and as much about the beneficiary’s personal circumstances as will be necessary to administer the trust;
• they are satisfied there are no outstanding breaches of trust by the existing trustees; and
• they have determined the extent of the trust property and will ensure that, once appointed, it is vested in the names of the new trustees.

GENERAL DUTIES OF A TRUSTEE:

• To always act in good faith and jointly – the common law rule is that the trustees must always act jointly in a transaction with third parties and contractual powers must be exercised by all the trustees acting together.
• To observe the trust deed – trustees must inform themselves of the terms of the trust deed and comply strictly with the duties and directions set out in therein.
• To take possession of the trust property – the trustee needs to take charge of the trust property and he must, as soon as possible, acquaint himself with the nature and extent of thereof and take possession of the property so that it comes under his/her control.
• To act independently between the beneficiaries – trustees must not allow one beneficiary to suffer at the expense of another and must balance potentially competing interests for income and capital.
• To provide information – trustees are under a duty to provide clear and accurate accounts and produce any information or other documents relating to the trust when required to do so by a beneficiary.
• To act unanimously.
• To exercise reasonable care and ensure the correct distribution of assets.
• To provide an income for the beneficiaries and to preserve the value of the capital.

POWERS

The precise powers that a trustee has will be defined by the trust deed and by law. However, a trustee will normally be given the following powers:

• investment;
• dealing with land;
• delegation to agents, nominees and custodians;
• insurance;
• remuneration for professional trustees;
• advancement of capital;
• maintenance of minor beneficiaries; and
• to pay, transfer or lend funds to beneficiaries.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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