Pactum successorium – what is it?

If you want to regulate how your affairs are to be dealt with after your death, please make sure you set it out fully in your last will and testament, or a codicil (addendum) thereto.

An agreement that purports to regulate the process of succession is invalid under South African law. By this I mean, an arrangement between two or more persons that – post mortem (after somebody’s death) – some or all of one person’s property will devolve upon another person or persons, and that his or her affairs will be conducted in an agreed-upon manner.

Such an agreement is known as a pactum successorium. It is invalid and hence unenforceable.

Nor does it amend or add to the person’s last will and testament in any way.

This principle of our common law dates from Roman-Dutch law and has been followed by our courts.

The judgments in Borman and De Vos, NNO and another v Potgietersrusse Tabakkorporasie Bpk and another 1976 (3) SA 488 (A), and McAlpine v McAlpine NO and another 1977 (1) SA 736 (A) refer. These are both appeal court decisions.

The objectionable features of such an agreement are, firstly, that it restricts a persons’ right to freedom of testation, and, secondly, that it is an evasion of the formalities required to produce a valid last will and testament. The latter obligations are statutory in nature. Such an agreement is seen to be ‘contra bonos mores’ – contrary to the good morals of society.

An example is where two persons agree (verbally or in writing) to bequeath their estates (or part thereof) to each other. This is invalid. If one or both of them die without a Will, they are interstate. If they have executed a valid Will in the past – that Will be enforceable, no matter the subsequent ‘arrangement’. A Will is not an agreement – it is a ‘one-way’ instruction concluded in terms of the Wills Act and can be revoked unilaterally at any time.

This is not to say that every agreement entered into by a person before he or she passed away is invalid. No! A valid agreement entered into, such as a covering mortgage bond, hire purchase, alienation of land etc. – which took effect before death, is enforceable against the deceased estate and executor.

The difference between a contract binding on the estate and a pactum successorium is that the latter would only take effect after death – which cannot be for the reasons given above.

I recently came across a case where the testatrix had signed an ‘agreement’ with her tenant that, after she died, he (the tenant) could move out of the rented cottage into the main house rent-free; be provided with funds from the estate and remain in residence for an indefinite period of time. The tenant was not named as an heir in the Will. This agreement was determined to be invalid. The terms and conditions of the Will provided for the transfer of the property to the deceased’s heirs. This was done, free of any obligations to the former tenant. Of course, the lease agreement as far as the cottage on the property is concerned, would have been binding on the heirs until the lease termination date, as the lease agreement was concluded and took effect before death.

It is important to bear in mind that a properly constructed buy-and-sell agreement (a topic we have covered in previous editions), which is concluded during the shareholder’s lifetime and creates reciprocal rights and obligations between the parties whilst they are alive, is not an agreement to inherit. Upon the death of the insured, the suspensive conditions are triggered and the sale takes place. It is part of common and sensible business practice and recognised in terms of the Estate Duty Act, as well. It is not a pactum successorium.

Article written by David Thomson, Senior Legal Adviser, Sanlam Trust

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