Page 19 - Nexia SAB&T Estate Planning Guide 2024

Writing-off a loan account or debt due
Possible treatment options for a loan due and payable to the testator are:
n Leave the residue of the estate to the creditor as sole heir.
n Roll the claim over to the surviving spouse (if relevant) i.e. bequeath the loan
to him or her.
n Leave the claim to a third party and bequeath a cash amount to the debtor
so that he or she can repay the same.
n Quantify the loan and leave a specified amount to the debtor, but preferably
not the exact same amount of the loan. In such a way, the loan amount
is included as property in the Estate Duty calculation of the testator, the
executor calls up the loan and once the same has been repaid, the legacy is
distributed.

Usufruct and bare dominium
n A usufruct is created when a testator gives a right to the income or use of
a specific asset to a person (usufructury), and the right of ownership (bare
dominium) to another.
n During his lifetime, the usufructury must take good care of the asset and
cannot sell or encumber it in any way without the bare dominium holder’s
consent.
n The holder of the bare dominium is the eventual owner of the property,
but his rights are limited by the usufruct. After the usufruct has ended, he
receives full title.
n Upon the bare dominium holder’s death, his interests are transmittable to his
intestate /testate heirs.
n The method of valuing the usufruct differs between donations tax and
estate duty. The death of the holder of the usufruct will however not trigger
additional capital gains tax.
Fideicommissum
n This is where one person inherits an asset on the condition that it must pass
to someone else at a certain future date or the occurrence of a specified
event.
n The purpose of this mechanism is to enable an estate planner to retain
assets within the family circle for successive generations.

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