THE DIFFERENT PROCESSES OF APPOINTING A THIRD PARTY ON BEHALF OF PERSONS INCAPABLE OF MANAGING HIS OR HER OWN ESTATE AND LEGAL AFFAIRS
Life is about making decisions. The act of deciding forms an integral part of every individual’s life, and for any individual to be able to make a legal decision, they must have the necessary legal capacity to act. This means that the individual must be able to understand the nature, purpose and consequences of their legal action. An individual must therefore be in a mental position to understand the nature of the legal action, must be able to comprehend the consequences of such action and must then be able to make an informative decision to act accordingly.
Being diagnosed with a severe or profound mental disability prohibits one from making legal decisions and entering into contracts. When one is diagnosed with a severe or profound mental disability, it is a requirement in South African law to appoint a third party to act on behalf of that person and to administer their estate. The appointment of a third party is also obligatory in the event where a person has full mental ability but exhibits. This is for example when a person has a gambling or drug addiction and squanders his or her estate. This person is then labelled as a prodigal and a third party may be appointed to administer that person’s estate.
Our law provides two legal processes for the appointment of a third party to administer another person’s estate and personal affairs.
The most common process is the appointment of a curator ad litem and a curator bonis. The appointment is done by way of an application in the High Court of South Africa. Any interested party above the age of 18, may apply to the High Court for the appointment of a curator ad litem and a curator bonis to administer the person’s estate and personal affairs. The application is done by filing a Notice of Motion, together with a Founding Affidavit and at least two supporting medical reports, which sets forth the facts and circumstances cited to confirm that the person is diagnosed with a severe or profound mental disability, rendering that person of being incapable of managing his or her estate and personal affairs.
The court will initially appoint a curator ad litem, who will be required to conduct a thorough investigation and submit a written report of its findings to the court and the Master of the High Court. The curator ad litem will conduct interviews with the person, the family of that person, physicians and other people who have knowledge of the person’s circumstances before submitting a report that is confirmed by a report of the Master. Thereafter a curator bonis, who will ultimately assume responsibility over the person’s property and estate, will be appointed upon the curator ad litem’s recommendation.
As the obligations are onerous and may be too much for someone who is simultaneously providing personal care to their loved one, the designated curator bonis is frequently an attorney, accountant, or other similar professional, rather than a family member of the incapacitated person. As a guarantee that the curator bonis would perform his or her duties effectively, a curator bonis must provide the Master of the High Court with security.
The curator bonis will manage the estate of the person in accordance with the rights and responsibilities assigned by the High Court. They will be responsible for providing and submitting annual accounts which include all revenue received, expenses incurred and all vouchers and receipts for transactions done for, or on behalf of the incapacitated person, to the Master. A curator bonis is compensated modestly for his or her efforts in this respect. The Master will oversee and approve these fees, which are taken from the estate the curator bonis is in charge of.
Since this application must be launched in the High Court, in order to appoint a curator ad litem and a curator bonis, this process can be expensive, however it can be done in any situation and on an urgent or semi-urgent basis.
The second process is governed by Section 60 of the Mental Health Care Act (Act 17 of 2002), in terms whereof the Master can appoint an administrator on behalf of a mentally ill person or a person that is diagnosed with a severe or profound mental health disability.
Any person above the age of 18, may apply directly to the Master for the appointment of an administrator on behalf of the mentally ill person or a person that was diagnosed with a severe or profound mental health disability.
In terms of Section 60 of the Act, the application must be done in writing under oath, setting out the relationship with the mentally ill person, as well as state the estimated value of that person’s estate and annual income. The application must further include all available mental health medical certificates or reports relevant to the mental health of that person, confirming that person’s inability to manage his or her own estate and personal affairs, as well as the information and contact details of any other person who may provide further information relating to the mental health of that person. The application must be submitted directly at the Master’s office in whose area of jurisdiction the mentally ill person resides.
In accordance with the Act, the Master may appoint a nominated administrator without conducting a further investigation if the Master is satisfied that all the requirements have been met. The requirements are that the person must be declared mentally ill, must be proven to have severe or profound mental health disability and that the capital value of that person’s estate is less than R200 000.00 or their annual income is less than R24 000.00. The Master will then allocate a reference number to the estate of the mentally ill person, issue the confirmation of the appointment of the administrator, and provide detailed instructions and directions to the administrator.
In the event where the value of a person’s estate exceeds R200 000.00, or their annual income is more than R24 000.00 per annum, the Master of the High Court can appoint an interim administrator. However, an investigator must first be appointed to conduct an investigation before a final administrator can be appointed on behalf of the mentally ill person. The Master must arrange for an appropriately qualified, most likely a practicing attorney, to investigate the application within 30 days of the date of filing the application and the investigation must be completed within 60 days of the appointment of the investigator. The investigator will perform the same function as a curator ad litem. The costs of the investigator are not covered by the Master of the High Court and the estate of the mentally ill person or the applicant submitting the application, will be responsible for the costs charged by the investigator. These costs may not exceed R15 000.00.
The process for appointing an administrator is more cost effective than launching an application in the High Court for the appointment of a curator ad litem and a curator bonis. Although this process may be more cost effective, it disadvantages one in the way that it can create unforeseen delays in the appointment of an administrator, especially when the Master must appoint an investigator due to the limitations as set out in the Act, while the launching an application in the High Court can be done on an urgent or semi urgent basis. Further an application in the High Court is applicable to any situation where a person becomes incapacitated to manage his or her own estate and personal affairs, while an application in terms of Section 60 of the Act, is limited to matters where a person is mentally ill or has been diagnosed with a severe or profound mental health disability.
Written by Faure & Faure Inc Senior Associate Conrad Coetzee and Candidate Attorney Jayde De Wet
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