ERF 222: Law of Succession Chapter Nine PDF

ERF 222 : LAW OF SUCCESSION CHAPTER NINE : ABSOLUTE BEQUESTS, CONDITIONS, MODUS AND ESTATE MASSING Vesting occurs when a benefit is left to a beneficiary, granting them certain rights after the testator’s death, and applies to both testate and intestate succession through dies cedit and dies ve...

ERF 222 : LAW OF SUCCESSION CHAPTER NINE : ABSOLUTE BEQUESTS, CONDITIONS, MODUS AND ESTATE MASSING Vesting occurs when a benefit is left to a beneficiary, granting them certain rights after the testator’s death, and applies to both testate and intestate succession through dies cedit and dies venit. 1. DIes Cedit : Right to claim delivery of the benefit. 2. Dies Venit : Right to enforce benefit. If the testator imposes a condition, dies cedit may not take place until the condition is fulfilled, and accrual does not operate once a beneficiary’s rights have vested. 1. Vesting is important in distributing surplus capital or income among trust beneficiaries. 2. Vesting can determine the acceleration of interests when a beneficiary repudiates or renounces their rights. Bequests Absolute Bequest : A bequest without conditions, vesting occurs immediately upon the testator’s death. Conditional Bequest : Vesting occurs only upon a condition for a future uncertain event being fulfilled. 1. Legacy : A legacy is a specific asset or amount of money left to a beneficiary, known as a legatee. 2. Inheritance : A bequest of the entire estate or a portion thereof is called an inheritance, and the recipient is called an heir. 3. Pre-legacy : A legacy that must be paid before any other bequests. 4. Residue : The remaining estate after debts, legacies, and administration costs are deducted, that is inherited by an heir. 5. Insufficient Funds : If the estate’s debts exceed the funds available, legacies are proportionately reduced, and heirs may receive nothing. 6. Collation : Heirs may be required to account for benefits received during the testator’s lifetime, but legatees are not. Lapse of Legacies 1. A legacy may fail depending on the testator’s intention if effect cannot be given to it. 2. Ademption occurs when the testator voluntarily alienates the object of a legacy, causing the legacy to fail. If alienation is involuntary, the legatee may receive the value of the asset. 3. If a legatee dies before the legacy vests, they must be alive to inherit unless section 2C of the Wills Act applies, which allows for substitution. 4. If a legatee repudiates the legacy and no substitute is named or the beneficiary is disqualified, the legacy falls into the estate residue. 5. If the bequeathed object is destroyed, it is assumed that the testator revoked the legacy. 6. In cases of estate insolvency, legacies cannot be transferred to legatees as the assets must go to creditors. Time Clauses Time Clause : A provision in a will that subjects a bequest to a future event, which may happen at a certain or uncertain time. Suspensive Time Clause : A bequest where the beneficiary receives the benefit at a specific future time, and the beneficiary’s rights are postponed, but the benefit is certain, whereby the person must wait until the specified time to receive the benefit. Resolutive (Terminating) Time Clause : A clause that ends the beneficiary’s rights at a certain time in the future. Conditional Bequests Conditional bequests depend on an uncertain future event, whereby a valid condition must be clear, possible, and not illegal or immoral, where if the condition fails, the bequest becomes unconditional. 1. Resolutive Condition : The bequest ends upon the occurrence of a specified uncertain event. 2. Suspensive Condition : The beneficiary only obtains rights after a particular event occurs and the condition delays the vesting of rights until the event occurs. 3. Fideicommissum : A conditional arrangement where the fiduciary’s rights are subject to a resolutive condition, and the fideicommissary’s rights are subject to a suspensive condition. Nudum Praeceptum Nudum Praeceptum : A prohibition that is not legally binding, where if a testator imposes a restriction on how a beneficiary may deal with the property but does not nominate a substitute to inherit if the restriction is violated, the prohibition is invalid. A valid prohibition requires naming a substitute beneficiary who will inherit if the initial beneficiary violates the condition. Modus Modus : A qualification added to a testamentary bequest that requires the beneficiary to use the property or value for a specific purpose, that does not make the bequest conditional nor does it postpone the vesting of the beneficiary’s rights. If a beneficiary does not comply with the modus, it doesn’t affect their rights, but they may be held liable through personal action. 1. Modus in the Interest of the Beneficiary. 2. Modus in the Interest of a Third Person. 3. Modus for the Furtherance of an Impersonal Object. A modus does not affect the beneficiary's vested rights, whereas a suspensive condition postpones the vesting, as if a beneficiary with a modus dies before fulfilling it, the benefit still devolves to their heirs, however, a suspensive condition results in the loss of the vested rights if not fulfilled. Massing of Estates Estate Massing : Where two or more testators combine their estates into a single unit for distribution upon the death of the first spouse, that allows the surviving spouse to control the massed estate and maintain their standard of living. Not limited to spouses or couples married in community of property; other relationships, like siblings, can also create estate massing. Requirements 1. Intent to consolidate estates. 2. Disposal of both the deceased and survivor’s shares by the first-dying testator. 3. The surviving testator must accept (adiate) the massing. Aims : Estate massing often aims to protect children while providing for the surviving spouse, ensuring support and education in line with the family’s standard of living. Methods of Implementation 1. Usufruct : The surviving spouse receives a lifelong usufruct, with the massed estate going to children upon the survivor’s death. 2. Fideicommissum : The massed estate goes to the survivor and then to the children in equal shares after the survivor’s death. 3. Trust : The estate is held in trust for the survivor’s benefit, with capital passing to children after the survivor’s death. 4. Unlimited Rights : The survivor receives outright ownership of the family home, while other estate assets are divided among children. Section 37 of the Administration of Estates Act : Estate massing requires a mutual will with two or more testators, the consolidation of property into a mass for distribution, limited interest for the survivor in the massed estate and the survivor must accept the benefit for massing to take effect. Consequences of Adiation : The survivor loses the power to revoke the will and the survivor’s estate becomes part of the massed estate. Repudiation : Receive no benefit from the deceased’s estate, but retain their estate and may dispose of it freely. Customary Law of Succession : Customary law allows for estate massing in wills to keep family property within the family, though the surviving spouse may repudiate the arrangement.