Deceased estate – creation of the ...

Asked by Morne on 19-05-2020 09:18:14
Question posted in the General Law category relating to Gauteng
Question value: R 300.00

Deceased estate – creation of the Trust

My father passed away 2 years ago. Nedbank Trust Division has prepared his will. The will states that I inherit 50% of his assets and my mom inherits the other 50% of the assets. There is one credit card debt and further not much else. The tax is zero.etc.

The issue we have is with the creation of the Trust. There is a shortfall in the trust and my mother has been asked to transfer R200 000 into the trust to cover the shortfall. Here lies the frustration element. My mother is a pensioner, living off fixed investments at Nedbank some pension and a SASSA grant. She does not have the R200 000. Nedbank wrote they don’t want to close her bank accounts to pay for the shortfall but whether she transfers the money or they remove it from her call account it has the same effect; she will be left in a far worse off position. I told them I need to meet with the creators of the Trust there must be some other way, can I not sign a waiver that I don’t need the difference paid into the Trust.

They play hardball they don’t give feedback and now it went into a silent state. We do not get any feedback or updates. I approached the Ombudsman just to receive a letter (18 May 2020) that they cannot assist with an Estate/Trust matter and should approach the Master of Estates.

I emailed the assistant master of Estates (20 May 2020) and I am still waiting for their feedback.

What is my legal right? It is not fair for Nedbank Trust Division to sit on this for 2 years with lots of delays from their side. It is legally our money and just because it's a small trust and we don’t have lots of money they think they can push us to the corner. Surely if you don’t have the money to pay the shortfall and I am willing to accept it since I am the Trustee of the Trust why cant this move forward.

I know they will blame COVID 19 for the delays, that’s 2 months out of 2 years. What is my legal position to wind up and finalize this estate?

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Information Requested by Lawyer

Posted by Att. Patrick on 19-05-2020 14:25:16

Hi there,

I am a practicing attorney based in South Africa and I will assist you with your question. Please feel free to ask as many follow up questions in order to clarify your question. If you have a new question, you must please open a new thread.

This is a request for information so that I can understand your question and give you a proper answer.

What does the Will actually say about the creation of the Will Trust? 

Does the Will say that the Trust must be established BEFORE any money is distributed to you and your Mom, or does it say that your money must be paid first?

Are you able to email a copy of the Will to me? caselawja <at> outlook.com

Awaiting your further information.

Att. Patrick

Answer to the Question

Posted by Att. Patrick on 20-05-2020 10:52:45

Hi again,

Okay, so regarding the first Will, it is unfortunate that your late father listened to Nedbank and allowed them to draft a new Will for him. There wasn't really anything wrong with the first Will. It would be worked. It was just very, very simple and I am of the view that most lawyers would have wanted to re-draft it to make it better. This is what Nedbank did. 

The Master will not accept the first Will, simply because your late father signed the second Will. The first Will can be thrown in the bin. 

The issue here is that Nedbank included, in the second Will, a Trust. 

In paragraph 1, your Dad leaves the property to you but subject to your Mom's right to live in the property until she dies. Nedbank must therefore appoint a Conveyancing attorney to transfer the property into your name and the transfer must record the usufruct.

The remaining assets of your late Father's estate (basically, EVERYTHING except the property) is then to be left in a Trust, administered by Nedbank, and they will invest the money and use it to support your mom. 

When your mom dies, the Trust will terminate and all of the money will be given to you. 

So where you say that "the will states that I inherit 50% of his assets and my mom inherits the other 50% of the assets", I don't understand where you are reading this from, because I can't see that. 

In paragraph 3, it says that your mom must take her 50% of the joint estate (which actually belongs to her!) and if she takes too many assets, then she will basically need to pay the estate back the difference in cash.

I think that THIS is where the issue is coming in. I think that she took all of her own assets (her 50% of the estate) and then she took some of your late father's assets (his 50% of the estate), and the trustees have valued what she took at R200,000 and they are now demanding that she pays this R200,000 into the Trust. 

You need to get clarity on this issue. You need to speak to them to ask them to tell you -

1) What is the total value of the estate

2) What is the value of the assets that your mom is entitled to in her own right

3) What is the value of the assets that your mom took

4) How do they calculate the R200,000 difference

The answers to the questions will give you the answers that you are looking for!

If the above is correct, then Nedbank Trust will be entitled to DEMAND That your mom complies with the Will and pay the R200,000. If your mom refuses, then Nedbank Trust will need to sue your mom for the money. The costs of the litigation will be paid for by the estate!!! So be aware of that route. 

What Nedbank Trust can't do is to simply TAKE her money. That is illegal, and you should tell them that. 

I hope that this assists you?

Information provided by client

Thank you so much no one explained it to us in this matter. they gave us the liquidation account which shows the shortfall, but nowhere did my mom chose any assets. this was a calculation done by them.

If i send you the liquidation acocunt will you be able to guide me in asking the correct questions to the Nedbank Trust dept. Can this be amended to avoid the shortfall?

the issue is there is a complete breakdown in communication between Nedbank and us they dont respond to us.

They did a valuation on the house and the content but nowhere did my mom chose what is hers and what should be mine.

Can i also request as the trustee a loan account that she doesnt have to physically pay the money into the Trust.or can they reallocate the assets to avoid any shortfall?

If this is possible why was this never raised by them as a possible solution?

Thank you for the competence quick reponses

Answer to the Question

Posted by Att. Patrick on 21-05-2020 10:41:01

Yes, send me the draft L&D account. I can have a quick look at it.

From what I can see in the Will, nothing is yours. Only the house. Everything else was left to the Trust.

Q: Can i also request as the trustee a loan account that she doesn't have to physically pay the money into the Trust.or can they reallocate the assets to avoid any shortfall? --> No. The Will is quite clear that she needs to pay in the shortfall.

Answer to the Question

Posted by Att. Patrick on 22-05-2020 13:21:40

Hi again,

Okay, so like I said, the only thing that you inherited in terms of the Will is your late father's interest in the property.

The remainder of the assets (in other words, 50% of the assets making up the joint estate) are left to a Trust. Your Mom is entitled to 50% oif those assets, so she can choose what she wants, but if she takes more than what she is entitled to then she needs to pay the Trust for that.

This is actually given effect to in the L&D account.

I think that the issue that you're identifying (or struggling with) is that you don't understand why the trustees / the executor can have powers over your Mom's investments which are held in her name. In short, it doesn't matter whose name the accounts are in, all of the accounts fall into the joint estate. That means that half of the accounts are your Dad's and the other half are your Mom's. This does make it hard to understand the split, but logically it is correct.

So what they have done is to distribute basically everything to your Mom (except the property) and to retain "your late Dad's" uinvestments, but that means that your Mom will need to pay in the difference.

It looks right.

Look, at the end of the day whether your Mom keeps the investments in her name to live off, or R200k of the investments are moved into the trust which invests the money for your Mom's benefit, isn't it the same thing?

You say that she doesn't have the money. It might be true, but she must have the investments. So, some of these must be sold and given to the trust.

At the end of the day you can't dispute the actions of the trust, simply because that's how your late Dad wanted to leave his estate.

Does this help?

Answer Accepted

This answer was accepted on 25-05-2020 08:17:59

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