Winding up an estate still takes longer than before the pandemic - what you can do

News24 – 29 December 2022

The timelines for winding up an estate have improved since the peak of the Covid-19 pandemic but are still likely to take longer than before Covid, as pandemic backlogs and other problems persist.A year was a good expectation for an estate where the deceased left a sound will and the estate was dealt with by an experienced executor, Angelique Visser, Fiduciary Institute of Southern Africa (FISA) National Councillor, says.

During the pandemic, however, timelines deteriorated, making it common for any estate to take two years to wind up, FISA reported last year. Increased deaths during the pandemic were responsible for much of the delays, but the offices of the Master of the High Court (the Master’s Offices) also took much longer to issue the letters that appoint executors, approve the estate accounts and authorise the distribution of estate assets to the heirs.

Bank delays frustrate estate professionals

Recently FISA has expressed its frustration with delays caused by banks and banks have admitted they too were slowed up by Covid and are still catching up.

To wind up an estate, the executor of the estate needs information about, among other things, your deceased family member’s bank accounts and investments. The accounts then need to be closed and the balances or investments transferred into a bank account in the estate’s name.The executor also needs the tax certificates for those accounts in order to file the deceased’s tax return and the estate’s return.

Ian Brink, chairperson of FISA, said banks are dragging their feet on these three tasks.He says banks have different procedures which they sometimes change without consultation, leading to confusion among bank staff, as well as much frustration for FISA members trying to help families wind up estates.

Months to respond

Visser says practitioners are now able to obtain a letter of executorship from the Master’s Office within two to three weeks, but then battle for three to four months for a response from some of the banks. She says she has approached the senior management of several banks for assistance but there has been no improvement.

Aneesa Razack, chief executive officer of FNB Fiduciary, says Covid-19 negatively affected the industry’s processes for winding up deceased estates. In addition to the increase in deaths, there has been an increase in fraud and administrative hurdles that are frequently beyond the control of executors and/or banks, she says.

Razack says banks are working through the Banking Association of South Africa with the Chief Master's Office to address the challenges and minimise the adverse impact on the families of those who have died. FNB is also trying to shorten the time it takes to wind up estates by increasing its capacity to help its clients and improving the processing of smaller estates using digital platforms, she says.

Two weeks to close account

Graham Mcpherson, head of Nedgroup Trust, says once the correct documents have been submitted, it takes 14 days to close an account and pay any money into the estate account.

Delays are primarily due to outages on the Master’s Office portal that banks and estate practitioners use and the need to get all the necessary documents from different parties, Mcpherson says. All of this has been compounded by the large volumes of estates currently experienced, he says.

During the peak of the pandemic the Master’s Offices worked at 50% capacity and closed frequently when staff became ill. The offices and the Department of Justice’s computer system also suffered a ransomware attack in July 2021.

IT problems

The Master’s Offices are now open but continue to be plagued by computer problems, the recent FISA conference heard. Martin Mafojane, the Chief Master of the High Court, said the Master's Offices do not have stable and reliable IT infrastructure resulting in the offices’ portal frequently being unavailable to professionals dealing with estates.

He said the offices fall within the Department of Justice and Constitutional Development which has now realised that rather than relying on contractors, it needs to recruit competent, qualified and skilful people to provide the tools that the offices require.

Confidence lost

Bongiwe Adonis, assistant manager at the Cape Town Master of the High Court, said the Master’s Office realised that practitioners and the public had lost confidence in it and that it needs to modernise its systems.

Online registration of deceased estates and trusts is one goal, and the aim is to have a user-friendly system like the South African Revenue Service’s eFiling system, enabling registration of an estate from anywhere in the world, she says. But we are not there yet, an in the meantime, members of FISA, the Legal Practice Council and the South African Institute of Chartered Accountants can use a self-help system available at the Master’s Offices to register estates, she says.

The Master’s Offices have committed to processing applications registered this way within 10 days, Adonis says.

Estates that are not registered on this self-help system – for example when documents are couriered to the Master's Office have a 21-day turnaround time from the time, she said. If the timeline is not met, the Master’s Office must explain the delay, she says. Information is also being pulled from the Department of Home Affairs so that dependants can be identified and fraudulent activities minimised, Adonis says. With these and other initiatives, the Master’s Offices are headed towards better and improved services by 2025, she says.

You can help

Both Standard Bank and Nedbank said delays in dealing with deceased’s accounts are often a result of families not knowing what documents must be submitted when and by whom. Both banks provide step-by-step assistance helping you to understand the process and requirements, they say.

Standard Bank’s Ross Linstrom encourages families and executors to contact the bank as soon as possible for assistance and guidance. If emergency access to the deceased’s finances is required, this can be arranged if the necessary information is provided to the bank, he says.

www.samigration.com

Zimbabwean citizen Gibson Tawodzera kicked out of SA may return, court rules

Pretoria News – 30 December 2022

Pretoria - A Zimbabwean citizen who had been kicked out of South Africa and deported back to Zimbabwe has received an early Christmas gift.

At the time, Home Affairs had, out of the blue, 13 years after his South African wife had died, insisted that the marriage was all along a sham.

The Gauteng High Court, Pretoria has now ordered the department to allow Gibson Tawodzera back into the country and reissue him with his permanent residency permit.

He approached the court after Home Affairs told him that his marriage was non existent and he could not remain in the country.

Tawodzera entered South Africa in 2000 and two years later he married Bongiwe Sombudla, a South African citizen. The director-general of the department issued Tawodzera with a permanent residence permit in 2004.

In terms of the emigration law, as it then read, Home Affairs could issue a permanent residence permit to any person who is the spouse of a South African, provided that the department was satisfied that “a good faith spousal relationship exists”.

The 2005, the Immigration Act was amended, which made it more difficult to obtain permanent residence in South Africa. It required a foreign spouse to have been married to a South African citizen for at least five years.

Sombudla died in 2006, but her husband nonetheless retained his permanent residency status. This was because his marriage had been terminated by her death and not because they had separated.

Almost 13 years later, in March 2019, Home Affairs sent a letter to Tawodzera recording that he acquired permanent residence by marriage, but alleging that “it appears that the marriage was fraudulent”.

The letter went on to allege that Tawodzera’s permit “was therefore issued on a misrepresentation” and that he was now a foreign national who was in the country illegally.

This was the start of Tawodzera’s long and fruitless struggle with the department in a bid to try and convince them that he and his wife loved each other and that her death was the only reason why they were apart.

The court had criticised the conduct of the department on various levels, including that it never once mentioned why it deemed the marriage to have been a sham.

The department said that Tawodzera’s permanent residence permit was invalid because it was obtained in breach of the Immigration Act.

It was argued that acquisition of permanent residency by marriage was only possible if the applicant had been the spouse of a citizen or permanent resident for five years.

The department argued that Tawodzera was married to Sombundla for less than four years before her death. He could accordingly not have lawfully acquired permanent residence, they said.

But Judge SDJ Wilson said Tawodzera’s permanent residence permit was granted under a more generous regime than now applies.

The highwater mark of the respondents’ case seems to be that Tawodzera’s permanent residence permit was invalid because his marriage to Sombundla was a sham. But the department had produced anything to substantiate this – not to Tawodzera or the court, the judge said.

Tawodzera was arrested last year for being in the country illegally and before he was deported. The prosecutor at the time told the court that no one from Sombudla’s family knew of his marriage. But the judge now remarked that there is no evidence substantiating it.

The judge said under these circumstances, Tawodzera must be allowed to return to South Africa, where he had been staying for 20 years and had made a living for himself.

www.samigration.com

Employers beware: new legislation starting Jan. 1 makes employees out of contractors

Hamilton Spectator – 30 Dec 2022

Contractors will be entitled to statutory holiday pay, minimum wage, and vacation pay, Ed Canning writes.

It is a given that the pandemic had a dramatic impact on the working world for many people. Among those are people who lost their employment and decided to become consultants. They set themselves up as independent contractors, covering their own taxes and simply invoiced their clients on a fee-for-service basis. More than a few of these consultants decided they liked working from home too much, and when the employer demanded a return to the office, they resigned and set up their own consulting businesses.

On Jan. 1, significant changes are coming to the Employment Standards Act which will make many of these people employees overnight. That means they will be entitled to statutory holiday pay, minimum wage, vacation pay and all the other bells and whistles that come with the Employment Standards Act and employee status. Employers will be required to make normal employee deductions and government remittances for these individuals.

These changes do not apply to everyone but do apply to many. They cover “business consultants” and “information technology” consultants. A business consultant is defined as someone who provides advice or services in respect of operations, profitability, management, structure, processes, finances, accounting, procurement, human resources, environmental impacts, marketing, risk management, compliance or strategy.

That definition is broad and it is hard to think of someone it would not cover who works as a consultant. Information technology consultants are defined as people who provide advice or services in respect of IT systems including advice about planning, designing, analyzing, documenting, configuring, developing, testing and installing IT systems.

These fee-for-service consulting arrangements are usually mutually agreed upon and are attractive to both the company and the contractor. Before everyone panics, however, there are some exceptions. If the contractor charges $60 an hour or more, is incorporated, or is set up as a sole proprietor with a registered name and has a written consultancy agreement they do not become employees. They must tick all three boxes. Getting a consultancy agreement is fairly straightforward but getting incorporated takes a little bit more time and effort and usually involves hiring a lawyer. An alternative to being incorporated is that the individual can set up a sole proprietorship and have a business name registered under the Business Names Act. That is probably the cheaper route to go.

I strongly suspect that most consultants charge $60 an hour or more, but if a company is paying less and doesn’t want to jack up the hourly rate, it might as well face the music and make the consultant an employee. Have an employment agreement drafted recognizing their previous services and start making deductions.

For employers, failing to put their house in order can have drastic consequences. Everything goes along swimmingly until it does not. For instance, if a consultant is terminated or gets ill or needs parental leave and wants to collect employment insurance. If they apply, EI Service Canada does an assessment to see if they were in fact an employee. If it is found that they were, it orders the employer to remit the CPP and EI deductions it should have made for the employee plus the portion it should have deducted from the employee. The employer can end up on the hook for the taxes that should have been deducted, although that is not usually the case.

If the employer files a complaint with the Ministry of Labour, it would include unpaid vacation pay and statutory holiday pay going back, likely, two years. For employers, it is simply not worth the sleepless nights waiting for this to happen. Fix it now.

www.samigration.com

UK deportation agreement with Rwanda flawed and won't solve migration crisis, say critics 

News24 – 30 December 2022 

Rwanda welcomes UK judges ruling validating deportation plan

• A UK court has ruled that the intended deportation of illegal immigrants to Rwanda is legal.
• A Labour parliamentarian believes the policy is flawed and a breeding ground for corruption.
• Rwanda can only take up to 200 illegal immigrants.

Despite the courts on Monday ruling that the United Kingdom's intended deportation of illegal immigrants to Rwanda was legal, the policy remains opaque, shrouded in secrecy, a breeding ground for corruption, and has no guarantee of solving the UK's immigration crisis, says Yvette Cooper, a Labour Party legislator.

Speaking uninterrupted for five minutes in the House of Commons on Monday, Cooper made it clear that she did not support the Rwanda deal for which Home Secretary Suella Braverman was lobbying.

"The government has failed to stop criminal gangs putting lives at risk and proliferating through our borders. They failed to prosecute or convict the gang members and failed to take basic asylum decisions which are down by 40% in the last six years.

"Instead of sorting those problems out, they have put forward an unworkable, unethical, and extremely expensive Rwanda plan which risks making trafficking worse," she said. Braverman described the court judgment as a vindication of the Conservative Party's policy.

However, Cooper argued that the policy was a drain on the UK's fiscus, and unreasonably expensive.
She said:
It sets out serious problems in Home Office decision making, identifies significant financial costs of the scheme, and also there are limited numbers of people who will be covered, and certainly no evidence that it will act as a deterrent or address the serious problems that we face. 

The court ruling, therefore, was "so flawed and chaotic".

She was supported by Garden Court Chambers - a group of barristers specialising in civil liberties, education, human rights, and immigration - who said: "The Home Secretary did not properly consider the circumstances of eight individual claimants to decide if their circumstances mean the asylum claims should be determined in the UK, or whether there are other reasons why they should not be relocated to Rwanda."

UK lawyer Colin Yeo said an appeal was likely and could delay the policy.

"An appeal by the claimants is inevitable, so the High Court judgment is not the last word. The Court of Appeal is likely to look at the case, as is the Supreme Court," he said.

UK’s bid to send asylum seekers to Rwanda is ‘lawful’: High Court
There's a three weeks window period before the deportations start, if unopposed, because of the interim measure issued by the European Court of Human Rights, which states that removal cannot take place "until 3 weeks after delivery of the final domestic decision in ongoing judicial review proceedings".

Rwanda has already received 120 million pounds (about R2.5 billion) and another 20 million pounds is on the way. 
Once the deportees land in Rwanda, the UK is not accountable for them. 

If they are granted asylum in Rwanda, they will stay. If not, Rwanda can deport them back to their countries of origin.
"The idea is that by doing this to some refugees, other refugees will be deterred from trying to come to the UK to claim asylum," said Yeo.

The United Nations High Commissioner for Refugees (UNHCR) has long been against this policy. The UNHCR found Rwanda unfit to take in people deported from the United Kingdom.

The UNHCR argued:
In the light of the history of refoulement and defects in its asylum system, Rwanda could not be relied on to comply with its obligations under that convention and, by extension, would fail to comply with the obligations it had assumed under the Memorandum Of Understandings (MOUs) and Notes Verbales (diplomatic communications). 
Cooper said the Conservative government even planned to deport heavily pregnant women, and that it wanted a state almost halfway across the world to "take decisions for us".
She added that there was no economic sense in the Rwanda deal.
"The number of people Rwanda takes will be very limited, and there will be lots more money, provided by the UK government. The Home Secretary didn't tell us about any of those things."
Rwanda will take about 200 people, and will translate to over a million pounds per person.
Before the UK deal, Rwanda entered into a similar one with Israel in 2014. In its ruling, the British court said the government didn't investigate the circumstances that led to the collapse of the Rwanda-Israel deal.

www.samigration.com

Judge tells Home Affairs to get house in order, stop wasting taxpayers’ money

IOL – 28 December 2022

Pretoria - A judge gave the Department of Home Affairs a tongue lashing for wasting taxpayers’ money by not doing its work and ignoring applications made by the public.

He said these ended up in the courts, usually with the taxpayers footing the legal bill on behalf of the department.

Judge MP Phooko, sitting in the Gauteng High Court, Pretoria, said it was time “Home Affairs got its house in order”.

He pointed out the courts were flooded with applications from people who could not get any answers from the department, regarding their legal status in the country.

In the latest such application, British citizen Jonathan Firth applied nearly four years ago for permanent residency with the department. After he did not receive any response from the department two years later, he instructed a lawyer to assist him.

The lawyer wrote letters to the department requesting information regarding the status of Firth’s application, but there was no response.

Even after this application was served, Home Affairs did not respond, and did not attend court either to defend the matter.

It was silence from its side and it adopted a no-response attitude, the judge said.

Firth turned to the court in desperation for an order compelling the department to decide whether he should be granted permanent residency in South Africa or not.

He is in South Africa under a temporary residence visa that was issued to him by the department in August, 2017.

Firth applied for a permanent residency permit in June 2018 through a VFS Global Office in Johannesburg. He was subsequently issued with a reference number.

The records from VFS Global indicate Firth’s application for a permanent residency permit was received by the department on June 6, 2018.

He had subsequently not heard from Home Affairs.

The processing period for an application for a permanent residence permit is not stipulated in the immigration laws of South Africa.

The minimum processing time of eight to 10 months is stipulated on the VFS Global website, but is not legislated.

However, precedent informs that eight months is considered to be a reasonable period for the outcome of a permanent residence application.

The judge said the importance of one knowing the outcome of their application could not be gainsaid, given the significance of a permanent residence permit and the impact it had on one’s life.

Judge Phooko said Home Affairs was under a duty to take decisions, otherwise failure to do so would render immigration laws meaningless.

“It is, therefore, clear that waiting for extended periods for a permanent residence permit application to be finalised without any update whatsoever, is unlawful.”

He added the Constitution mandated public servants to promote and maintain a high standard of professional ethics when executing their duties.

“The Department of Home Affairs is a core government department that produces important documents regarding peoples’ status and access to services in South Africa.

“The department is needed by any person who enters, lives in and/or exits South Africa. Therefore, a crucial department like Home Affairs needs to put the interest of those who approach it for any documentation first,” he said.

He remarked that, at the very least when people approached state institutions, they expected a certain level of service and care, not indifference.

“If the department continues with its non-responsive stance, cases such as this are nowhere near the end. The public purse is also going to be severely affected,” the judge warned.

He gave the department 10 days in which to decide on Firth’s request for permanent residency.

www.samigration.com