FISA - CONFRONTING INCAPACITY · 2018. 9. 27. · • Common Law (Ex parte Hill 1970 (3) 411) • High Court application –Rule 57(1) and (13) • Two steps • Founding Affidavit

CONFRONTING INCAPACITY

Presented by Johann Jacobs

OVERVIEWOVERVIEWOVERVIEWOVERVIEW

• The problem

• Some basic legal concepts

• Post-event: current remedies

• Curatorship Application

• Administrator Application

• Power of Attorney

• In preparation

• Informal structures

• Inter Vivos Trust

• Special Trust

• Testamentary Trust

• A solution on the horizon?

2

• Physical deterioration

• Cognitive decline

• Related to property

• Neglect of affairs

• Vulnerability of estate

• Lack of access to the estate

• Issues of accountability and control

Date of presentationInsert filename here 4

THE PROBLEMTHE PROBLEMTHE PROBLEMTHE PROBLEM

AGEInability to give instructions

Do not understand the

consequences of decisions

SOME BASICSSOME BASICSSOME BASICSSOME BASICS

Person

Legal subject

Legal capacity

Status

Factors

Capacity to act

Testamentary capacity

Capacity to litigate

5

• Age

• Mental state

Determines competency

Ability to form a

will to which

law attaches

consequences

• Bearer of rights

• Bound by obligations

6

AGE AGE AGE AGE –––– lack of understanding / experiencelack of understanding / experiencelack of understanding / experiencelack of understanding / experience

MENTAL CAPACITY MENTAL CAPACITY MENTAL CAPACITY MENTAL CAPACITY –––– to judge and act in to judge and act in to judge and act in to judge and act in

accordance with accordance with accordance with accordance with

such judgment such judgment such judgment such judgment

DEMINISHED MENTAL CAPACITY: DEMINISHED MENTAL CAPACITY: DEMINISHED MENTAL CAPACITY: DEMINISHED MENTAL CAPACITY:

causescausescausescauses::::

---- mental illnessmental illnessmental illnessmental illness

---- intellectual disabilityintellectual disabilityintellectual disabilityintellectual disability

---- brain injury / diseasebrain injury / diseasebrain injury / diseasebrain injury / disease

---- strokestrokestrokestroke

---- dementiadementiadementiadementia

---- age relatedage relatedage relatedage related

law protects

solutions

FACTORSFACTORSFACTORSFACTORS

Compare:

infans and

pupillus

� Symptoms / behaviour

- Thinking

- Reasoning

- Remembering

� Assess / Test

7

• Longevity

• Aging population

• Progressive / temporary / fluctuating cognitive related

disabilities

• Privacy / dignity (Constitutional issues)

• Loss of independence / power shift

• Personal responsibility for funds

• No family

• Diaspora

• Family conflict

• Electronic / technology

• Limitations of legal remedies

• Undue influence / Fraud

• Elderly abuse

CONTEXTUAL FACTORSCONTEXTUAL FACTORSCONTEXTUAL FACTORSCONTEXTUAL FACTORS

• Advantages

• Disadvantages

CURATORSHIP APPLICATIONCURATORSHIP APPLICATIONCURATORSHIP APPLICATIONCURATORSHIP APPLICATION

8

• Common Law (Ex parte Hill 1970 (3) 411)

• High Court application – Rule 57(1) and (13)

• Two steps

• Founding Affidavit

• Medical Reports

• Curator ad Litem Report

• Master’s Report

• Set down for hearing

(viva voce evidence)

• Opposition

• Order: Appointment of Curator Bonis

• Release

� Locus standi

� Biographical details

� Merits

� Income per year

� Assets and Liabilities

� Proposed curator ad litem

� Proposed curator bonis

� Security

• Curator ad Litem (ex parte)

• Curator BonisRelief :

unable

to

manage

own

affairs

REMEDIESREMEDIESREMEDIESREMEDIES


ADMINISTRATION (Sections 71 ADMINISTRATION (Sections 71 ADMINISTRATION (Sections 71 ADMINISTRATION (Sections 71 –––– 85 / Regulations)85 / Regulations)85 / Regulations)85 / Regulations)

• Letters of Authority: Section 71 / Bouwer NO v Saambou

Bank Bpk 1993 (4) SA 492 (T)

• Powers (Ex parte Hulett 1968 (4) SA 172 (D))

• Prior approval

• Yearly accounts

• Vouchers

• Problem / issues

� Delay

� Costs

� Limited investment powers

� Cumbersome

� Remuneration

� All or nothing

� Intrusive / Dignity / Paternalistic

MENTAL HEALTH CARE ACT 17 / 2002MENTAL HEALTH CARE ACT 17 / 2002MENTAL HEALTH CARE ACT 17 / 2002MENTAL HEALTH CARE ACT 17 / 2002

10

• Commencement 15/12/2004

• Chapter 8: Care and administration of property of mentally ill

person or person with severe or profound intellectual disability

• Appointment of Administrator / manage property ito section 59 –

69 (Regulations promulgated)

• Application to Master (CB11)

• In writing / oath ( no legal representation required )

� Set out relationship

� Include medical certificate / mental health care practitioner

report

� Set out grounds

� 7 day provisio

� Details of income / property

� Other persons / contacts

� Proof of delivery to mentally ill person

� Income < R 24,000.00 Income < R 24,000.00 Income < R 24,000.00 Income < R 24,000.00 p/monthp/monthp/monthp/month

� Capital < R Capital < R Capital < R Capital < R 200,000.00200,000.00200,000.00200,000.00

11

Investigation

• When

• Investigator: file report

Outcome

• Master

• Appeal

• Termination

• Security

• Reference to Administration of Estates Act

� Confirmation

� Further information

� Property value and

income >>>> consideration value

� Appoint / Decline / Refers

� Inform appointee

POWER OF ATTORNEY POWER OF ATTORNEY POWER OF ATTORNEY POWER OF ATTORNEY

12

• Forms

• Key concepts

• Principal

• Agent

• Applicable law = Law of Agency

• Agent cannot have more power than principal

• 1957 (4) 354 (WTucker’s Fresh meat supply (Pty) Ltd v Echakowitz ) confirmed 1958 (1) SA 508 (A)

OROROROR

• Informal agencyInformal agencyInformal agencyInformal agency

• NegotiorumNegotiorumNegotiorumNegotiorum gestiogestiogestiogestio

• DelictualDelictualDelictualDelictual liabilityliabilityliabilityliability

• General Power of Attorney

• Special Power of Attorney

• Bank’s stationery

• On invitation

• On intervention

• Safeguards

IN PREPARATIONIN PREPARATIONIN PREPARATIONIN PREPARATION

13

• Have good records

• Simplify estate

• Digitize / Receipts / Payments

• “Equalise” estates

• Independent funds or accounts

• Emergency fund

• Have the conversation

• Have a confidant / someone you trust

• Assist / supplement / monitor

• Up to date Will

• Directorships / Trusteeships


TRUSTSTRUSTSTRUSTSTRUSTS

Inter-vivos trust

Separation of

control / enjoyment

Continuity

Discretionary

Limitations


SPECIAL TRUSTS SPECIAL TRUSTS SPECIAL TRUSTS SPECIAL TRUSTS ---- 2001200120012001

Forms: inter vivos or testamentary

Means a trust created solely for the benefit of one or more persons who is or are persons

with a disability as defined in section 6B(1) where such disability incapacitates such person

or persons from earning sufficient income for their maintenance, or from managing their own

financial affairs

Disability - section 6B(1)

Primary Beneficiary

Secondary Beneficiaries

Tax concessions

SARS BPR 306 (28/6/2018)

no donation in terms of sections 54 and 55

Limitations

‘disability’ means a moderate to severe limitation of any person’s ability to function or perform daily activities as a

result of a physical, sensory, communication, intellectual or

mental impairment, if the limitation-

(a) has lasted or has a prognosis of lasting more than a year;

and

(b) is diagnosed by a duly registered medical practitioner in

accordance with criteria prescribed by the Commissioner;

� Funding 7C(5)(c)

� Taxed at a sliding scale from 18% to 45% (same as natural persons)

� Maximum effective rate of capital gains tax (CGT) of 18%

� Entitled to R40,000.00 annual exclusion for CGT purposes as well as

R2 million primary residence exclusion

THE SOLUTION ?THE SOLUTION ?THE SOLUTION ?THE SOLUTION ?

16

Enduring Power of AttorneyEnduring Power of AttorneyEnduring Power of AttorneyEnduring Power of Attorney

• SA Law Commission – Project 122 - 2001

• Published 2004 – called for comment

• Scope

• Protection of those with diminished capacity

• Increase in numbers

• Outdated / inappropriate solutions

• Extensive reference to other jurisdictions

• Follow up of 1998 enduring power of attorney proposals

• Report (comprehensive 342 pages)

• Need for reform

• Concept of capacity (medical / legal)

• General principles / governing intervention

• Current measures / possible options

• Concept of enduring power of attorney

• Proposed draft bill

RECOMMENDATIONSRECOMMENDATIONSRECOMMENDATIONSRECOMMENDATIONS

17

• Change necessary

• Alternative to curatorships

• Introduce enduring power of attorney

• Develop common law concept of ‘incapacity’ / statutory substitute

• Accommodate grey areas

Draft Bill: Draft Bill: Draft Bill: Draft Bill: Assisted Decision Making: Adults with impaired decision making capacity

Chapters:Chapters:Chapters:Chapters:

� Fundamental principles: best interests

� Default authority: first tier of decision making

� Specific intervention order: short term / once-off decisions

� Management of property: long term - manager

� Care for personal welfare: long term - mentor

� Enduring POA

� Powers and duties of Master

� Access to court

� General provisions

� Schedule: model forms

ENDURING POWER OF ATTORNEYENDURING POWER OF ATTORNEYENDURING POWER OF ATTORNEYENDURING POWER OF ATTORNEY


• Type: enduring / conditional

• Form: property / person

• Safeguards

• Execution

• Registration

• Triggering event

• Supervisory safeguards

• Agent / restrictions on authority

• Person

• Property

• Termination

• Portability

current status?


THE RUB OF THE PROBLEM / SOLUTIONTHE RUB OF THE PROBLEM / SOLUTIONTHE RUB OF THE PROBLEM / SOLUTIONTHE RUB OF THE PROBLEM / SOLUTION

• Lay person

• Quick

• Inexpensive

• Flexible

• Personable

• (time consuming)

• (skills)

• (permanent loss)

• Professional

• Accountability

• Oversight / control

• Provide security

• Sanctions

• Intervention

• (costly)

• (rigid)

INFORMAL FORMAL

tension


ANCILLARY ISSUESANCILLARY ISSUESANCILLARY ISSUESANCILLARY ISSUES

• Testamentary capacity

• Directives / Living Will

• Euthanasia / Assisted suicide

• Elderly abuse


Shot my first turkey yesterday!Scared the hell outta everyone

In the frozen food section.

It was awesome!Getting’ old is so much fun…

COPYRIGHTCOPYRIGHTCOPYRIGHTCOPYRIGHT

All rights reserved. This presentation and/or any part thereof does not constitute legal

advice and is intended for personal use and may not be reproduced or distributed

without the express permission of the author/s. © 2017

Documents

FISA - CONFRONTING INCAPACITY · 2018. 9. 27. · • Common Law (Ex parte Hill 1970 (3) 411) • High Court application –Rule 57(1) and (13) • Two steps • Founding Affidavit