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What is the main purpose of direct substitution in a will?
What is the main purpose of direct substitution in a will?
Fideicommissary substitution allows beneficiaries to inherit successively.
Fideicommissary substitution allows beneficiaries to inherit successively.
True
What is meant by 'conferment of power' in the context of a will?
What is meant by 'conferment of power' in the context of a will?
It refers to the authority granted by the testator to a fiduciary.
In conditional substitution, if a beneficiary dies without descendants, the situation is referred to as _____ .
In conditional substitution, if a beneficiary dies without descendants, the situation is referred to as _____ .
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Match the following terms with their definitions:
Match the following terms with their definitions:
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Which statement best describes express direct substitution?
Which statement best describes express direct substitution?
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Ambiguity in substitution clauses can arise if it's unclear whether direct or fideicommissary substitution was intended.
Ambiguity in substitution clauses can arise if it's unclear whether direct or fideicommissary substitution was intended.
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What happens to a beneficiary's benefit if they predecease the testator?
What happens to a beneficiary's benefit if they predecease the testator?
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Which of the following categories does Section 2C(1) apply to?
Which of the following categories does Section 2C(1) apply to?
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The term 'surviving spouse' includes only individuals from monogamous marriages.
The term 'surviving spouse' includes only individuals from monogamous marriages.
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What is the role of the fiduciary in a fideicommissum?
What is the role of the fiduciary in a fideicommissum?
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In a fideicommissum, the _______ must exist clearly among the testator, fiduciary, and fideicommissaries.
In a fideicommissum, the _______ must exist clearly among the testator, fiduciary, and fideicommissaries.
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What does conditional fideicommissum require for the transfer of property?
What does conditional fideicommissum require for the transfer of property?
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Match the following cases with their significance:
Match the following cases with their significance:
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A typical fideicommissum involves only two parties: the testator and the fiduciary.
A typical fideicommissum involves only two parties: the testator and the fiduciary.
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What is a fideicommissum simplex?
What is a fideicommissum simplex?
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What must the usufructuary do at the end of their usufruct period?
What must the usufructuary do at the end of their usufruct period?
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If the dominus dies before the usufructuary, ownership of the property automatically transfers to the usufructuary.
If the dominus dies before the usufructuary, ownership of the property automatically transfers to the usufructuary.
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What happens to the usufructuary's rights upon their death?
What happens to the usufructuary's rights upon their death?
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In a fideicommissum, the fiduciary holds a ___ right that transfers to the fideicommissary at a certain time.
In a fideicommissum, the fiduciary holds a ___ right that transfers to the fideicommissary at a certain time.
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Match the following terms with their definitions:
Match the following terms with their definitions:
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What happens to the fiduciary's ownership if the fideicommissary predeceases the fiduciary?
What happens to the fiduciary's ownership if the fideicommissary predeceases the fiduciary?
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A fideicommissary must be alive at the testator's death to inherit.
A fideicommissary must be alive at the testator's death to inherit.
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What is a key requirement for a fiduciary when it comes to maintaining the property?
What is a key requirement for a fiduciary when it comes to maintaining the property?
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The presumption against fideicommissum arises only when there is doubt about the testator's _____ regarding substitution types.
The presumption against fideicommissum arises only when there is doubt about the testator's _____ regarding substitution types.
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Match the following terms with their descriptions:
Match the following terms with their descriptions:
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Which of the following best describes a fiduciary's right to alienate the property?
Which of the following best describes a fiduciary's right to alienate the property?
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What is a usufruct?
What is a usufruct?
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Common law supports fideicommissa without restrictions.
Common law supports fideicommissa without restrictions.
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What is implied adiation in the context of a fideicommissum?
What is implied adiation in the context of a fideicommissum?
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A fiduciary can dispose of the property independently of the will's terms.
A fiduciary can dispose of the property independently of the will's terms.
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What does Fideicommissum Residui refer to?
What does Fideicommissum Residui refer to?
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The duration of a fideicommissum on immovable property is limited to ___ successive fideicommissaries.
The duration of a fideicommissum on immovable property is limited to ___ successive fideicommissaries.
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Match the following terms with their definitions:
Match the following terms with their definitions:
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What happens to the second fideicommissary under the Immovable Property Act?
What happens to the second fideicommissary under the Immovable Property Act?
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Fideicommissum can arise even when the testator's intent is not explicitly stated in the will.
Fideicommissum can arise even when the testator's intent is not explicitly stated in the will.
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In Rockman v Padayachee, Neela Pillay was deemed a ___ heir.
In Rockman v Padayachee, Neela Pillay was deemed a ___ heir.
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Study Notes
Substitution
- Testator can appoint beneficiaries to inherit, with alternative beneficiaries if needed.
- Direct Substitution: Beneficiaries are appointed as alternatives, explicitly or impliedly by law.
- Fideicommissary Substitution: Beneficiaries inherit successively.
- Conditional Substitution: Expressly stated by the testator or implied by law if the beneficiary dies without descendants.
Direct Substitution
- Testator appoints an alternative beneficiary if the primary beneficiary cannot inherit.
- Reasons for inability to inherit: deceased, disqualified, repudiated the benefit, or condition not met.
- Testators use direct substitution to prevent intestate succession, keep assets out of the estate residue, and exclude accrual rights.
- Express Direct Substitution: Testator explicitly states the alternative beneficiary in the will.
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Implied Direct Substitution: Arises from the Wills Act, Section 2C, for major descendants who renounce their benefits.
- Section 2C(1): Benefit goes to the surviving spouse.
- Section 2C(2): Descendants of the deceased beneficiary inherit.
- Moosa v Minister of Justice: Constitutional Court clarified "surviving spouse" applies to monogamous and polygamous Muslim marriages, highlighting discrimination against spouses from polygamous marriages under Section 2C(1).
Fideicommissary Substitution
- Testator appoints multiple beneficiaries to inherit an estate or assets sequentially.
- The first beneficiary is the fiduciary, who must transfer the property to the subsequent beneficiary, the fideicommissary, upon a specified condition or event.
- Requires clear intent, identification of fiduciary, fideicommissary, and the property, and valid condition.
- Fideicommissum simplex: One fideicommissary.
- Fideicommissum multiplex: Multiple fideicommissaries.
- Raubenheimer v Raubeheimer: Intention to create a fideicommissum must be clear; terms like "usufruct" do not automatically imply a fideicommissum
- King v De Jager: Discrimination based on gender in wills can render clauses invalid under public policy and constitutional law.
Fideicommissum Types
- Conditional Fideicommissum: Property transfer depends on the fulfillment of a specific condition.
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Inferred Fideicommissum (Fideicommissum in Diem): Arises from the will's language, even if not explicitly stated.
- Rockman v Padayachee: Court ruled that Neela Pillay was a fiduciary heir, unable to dispose of the property against the first will's terms.
- Special Power of Appointment: Testator grants the fiduciary power to appoint the fideicommissary.
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Fideicommissum Residui: Property left to a fiduciary, with the remainder passing to another person after the fiduciary's death.
- Fiduciary can alienate parts of the property, subject to conditions regulating the fideicommissary's interest.
Legal Position of Parties in a Fideicommissum
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Fiduciary:
- Becomes owner upon delivery or registration.
- Ownership is subject to a resolutive condition, transferring to the fideicommissary upon fulfillment.
- Can alienate fiduciary interest.
- Must maintain the property's essential qualities.
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Fideicommissary:
- Receives the fideicommissary property upon condition fulfillment.
- Does not need to be alive at the testator’s death, but must be alive or conceived by the transfer time.
- If the fideicommissary dies before the condition is fulfilled, the fideicommissum may lapse, and the fiduciary may acquire full ownership.
Presumption against Fideicommissum
- Presumption favors direct substitution when there is doubt about the testator's intent.
- Does not apply when distinguishing fideicommissum from usufruct, as both impose burdens.
- Van Zyl v Van Zyl: Fideicommissary substitutions should be honored when the will explicitly supports them.
Usufruct and Accrual
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Usufruct: One person (dominus) owns the property while another (usufructuary) has the right to use, enjoy, and take the fruits of the property.
- Usually lasts for the usufructuary's lifetime.
- Usufructuary must return the property, maintaining its essential quality.
- Dominus obtains vested ownership at the testator's death but cannot use the property until a future event, such as the usufructuary's death.
- If the dominus dies before the usufructuary, ownership passes to the dominus's beneficiaries, subject to the usufruct.
- Common Law Accrual: Allows co-heirs or co-legatees to inherit a share from a beneficiary who cannot or does not want to inherit.
- Occurs when there is no substitution provision by the testator or under section 2C(2) of the Wills Act.
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Circumstances of Accrual:
- Predeceased co-heir or co-legatee
- Disqualified to inherit
- Repudiation of the benefit.
- Unfulfilled suspensive conditions
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Description
Explore the key concepts of substitution in estate planning, focusing on the roles of direct, fideicommissary, and conditional substitution. This quiz delves into how testators can appoint alternative beneficiaries and the implications of such substitutions in wills. Test your knowledge of these important legal principles!
