Substitution

Question 1

what is substitution

Answer 1

• Testator nominates a beneficiary and at the same time nominates another beneficiary to take the place of the 1st beneficiary.
• Eg.I give my house to Jake. If Jake cannot take it for any reason, Ben gets the house.

Question 2

occurs when

Answer 2

• 1st beneficiary may have predeceased the testator
• may be disqualified
• repudiated
• non-fulfilment of condition

Question 3

what are the 2 forms of substitution

Answer 3

• direct

- successive

Question 4

what is direct or alternative substitution

Answer 4

testator names a substitute or series of substitutes who are to inherit if heir or legatee does not inherit

Question 5

what are the 2 forms of direct substitution

Answer 5

• express

- implied

Question 6

what is direct express substitution

Answer 6

Simply found in the terms of the will, you have to read the will & give effect to it

Question 7

what is direct implied substitution

Answer 7

substitution that is implied by law

Question 8

S 2 c (2) Wills Act

Answer 8

¥ A descendant of the testator can be represented per stirpes by their descendants if the first-mentioned descendant would have been entitled to receive a benefit from the testator’s will if no predeceased/repudiated

Question 9

2 C 2 of wills act descendants of descendants

Answer 9

provides that the descendants of a descendant of the testator who has been appointed as a beneficiary in a will can represent/be substituted for that descendant where the descendant predeceases the testator or is disqualified from inheriting. This can also occur where the descendant repudiates in circumstances where s2C(1) is not applicable

Question 10

what does descendants in 2 C 2 of WA mean

Answer 10

applies to descendants of the testator who cannot or do not wish to inherit ¥ relates to all descendants of the testator [not only children – grandchildren can be represented by great-grandchildren]

Question 11

what is 2 C 2 subject to

Answer 11

♣ The operation of S2C(1)

♣ the context of the will that may point to a contrary intention on the testator’s part

Question 12

what is 2 C 1 of WA

Answer 12

¥ Only applies to a major descendant who is not mentally ill
¥ Applies where:
♣ Such a descendant is together with the surviving spouse of the testator entitled to a benefit in terms of the provisions of the will and
♣ The descendant repudiates the benefit

Question 13

what are the consequences of 2 c 1 of WA

Answer 13

¥ The benefit of the major descendant who repudiates the benefit will accrue to the surviving spouse of the testator
¥ Applies to all descendants who repudiate, provided that they were together with the surviving spouse entitled to a benefit
¥ Only applies to descendants and not to other relatives of the testator

Question 14

• What does descendant ‘together with the surviving spouse entitled to a benefit’ mean?

Answer 14

¥ Broad interpretation mentioned in the same will even if in respect of different benefits
¥ Narrow interpretation mentioned together in respect of the same bequest
- Narrow interpretation seems to be favoured.

Question 15

what is a fidei comissum

Answer 15

An arrangement in which a testator leaves property to one person (fiduciary), but provides that the property shall go to another beneficiary (fideicommissary).

The bequest to the fiduciary is usually subject to a provision that transfers ownership to the fideicommissary on the death of the fiduciary, at a definite times, or on the fulfilment of a condition.

Question 16

when does a fideicomissum occur

Answer 16

Occurs where a testator directs that a series of beneficiaries are to own their whole estate or part of it, or specific assets one after the other.
The first heir is known as the fiduciary and the succeeding beneficiary as the fideicommissary.

Question 17

requirements for a fideicommissum

Answer 17

The requirements for a valid fideicommissum are:
The testator must have a the intention to create a fideicommissum.
There must be a clear indication of the fiduciary asset, the fiduciary and the fideicommissary.
The fideicommissary condition must be valid.

Question 18

characteristic of a fideicommissum

Answer 18

There is always a succession of owners, distinguishes fideicommissary substitution from direct substitution where either one beneficiary or the other becomes owner, once and for all.

Question 19

if there is only one fideicomissary

Answer 19

If there is only one fideicommissary:
“fideicommissum simplex”:
Property passed on only once.
I.e. ‘I leave my house to my husband and upon his death it should pass to my son.’

Question 20

if there is more than one fideicomissary

Answer 20

“fideicommissum multiplex”:
Property passed on to successive fideicommissaries.
I.e. ‘I leave my house to my husband and upon his death it should pass to my son. Upon my son’s death, the house should go to my daughter.’

Question 21

S 6 of Immovable Property act

Answer 21

a fideicommissum on immovable property is limited to 2 fideicommissaries. If more than 2, the second fideicommissary gets the property free of the fideicommissum

Question 22

fideicomissum residui

Answer 22

Occurs where property is left to a fiduciary subject to the condition that as much of it as may be left at the time of his or her death is to devolve on another person (the fideicommissary).
Example:
‘I leave my estate to my wife and what is left of it on her death must go to our children in equal shares.’

Fiduciary can alienate up to three quarters of the property – unless testator provides the power to alienate the whole property.
Fiduciary can only alienate property while alive and not by means of a will.

Question 23

what is an implied condition of survival

Answer 23

Fideicommissary must be alive at the time to inherit the property.
E.g. I leave my property to Romeo. On Romeo’s death, the property must pass to Juliet. Juliet predeceases Romeo. What happens to the property when Romeo dies?

Question 24

nature of a fiduciary right

Answer 24

Become the owner of the property
Dies cedit and dies venit occur
But it’s limited ownership, cannot alienate or burden the property

Question 25

nature of a fideicomissary right

Answer 25

It is usually inferred from the decision in Barnhoorn v Duvenage that after the death of the testator, the fideicommissary has a personal right.
What is important is that the Appellate Division stipulated that before fulfilment of the condition or expiry of the fideicommissary term, the fideicommissary is quite definitely the holder of an actual, existing right, although it is not a vested right in the sense that it would constitute part of his or her deceased estate. Seems to be a personal right against the fiduciary.

Question 26

what happens on the death of a fiduciary

Answer 26

Property goes to fideicommissary.

Question 27

what happens on the death of a fideicommissary

Answer 27

If the fideicommissary predeceases the fiduciary, the fiduciary will become full owner.
Note:
The fideicommissary does not have to be alive at the time of the testator’s death; in fact, it is possible that the fideicommissary may be born generations after the testator. It is, however, essential that he or she should be alive or already conceived at the time indicated by the testator as the moment for the transfer of the fideicommissary property to him or her by the fiduciary.

Question 28

ex parte alberts

Answer 28

Held:
A fideicommissum was constituted and that the fideicommissaries were ascertainable only on the death of the surviving spouse.
A renunciation by the surviving spouse of her fiduciary rights did not entitle the existing children to obtain transfer of the fixed property free of any condition in favour of their children and the children of their brothers and sisters:

Question 29

ex parte marais

Answer 29

Under the will the survivor had been bequeathed a fiduciary interest.
By the renunciation, the rights of the children had not been postponed and accordingly they were entitled to the other half of the estate unconditionally.

Question 30

implied fideicomssum: 2 principle ways of creating fideicomissum

Answer 30

1. si sine liberis decesserit clause

2. Prohibition against alienation

Question 31

what is si sine liberis decesserit

Answer 31

A si sine liberis decesserit clause refers to the death of a beneficiary without leaving children. Si sine liberis decesserit clause may sometimes not be expressly included in the will and may be regarded as impliedly included.
If fiduciary is a descendant & designated fideicommissary is not a descendant → Si sine liberis decesserit is presumed.