Despite the importance of having a Last Will & Testament, most South Africans still don’t have one in place. More often than not, a person will procrastinate in getting it done as it is not a nice topic of conversation, or a person doesn’t expect the unexpected to happen to them. As it is such an important part of financial & estate planning, this is a service which we do offer our clients and their families as a completely free service. Having a well-structured will means you are taking care of your family and your responsibilities, ultimately ensuring that your assets are distributed in terms of your wishes when you are no longer around.
National Wills Week in South Africa puts emphasis on the importance of having a Will, and sees a number of institutions coming together to offer their assistance in drafting of a Will for all people free of charge. Although we draft Wills for our clients and their families at no cost all year round, we do feel it is still important to emphasize the importance of having a valid drafted Will in place during this time when the topic is highlighted.
Before drafting your Will, the following needs to be considered:
- Who should inherit from your estate, in what percentages should they inherit, or what assets should they inherit.
- Who should be the legal guardians of your minor children should there be no remaining natural guardian?
- Who should be nominated as trustees to look after your minor children’s inheritance until they are old enough to manage their own assets? This should be persons who you know will have your children’s best interests at heart, and should be independent of the natural or legal guardian.
- Who should be the executor of your will? It is recommended that a professional 3rd party be appointed in order to ensure they have the skills to wind up the estate efficiently and timeously. We do make use of the services of Capital Legacy who do act on our behalf in this regard.
- Do I have sufficient liquidity within my estate to settle all debts and pay for deathbed expenses, while leaving sufficient assets to look after my dependents left behind?
What issues may arise if you die without leaving a valid Will?
- Your assets may not be distributed as you would want.
- It can take a longer time to have an executor appointed. The appointed executor may be somebody you may not have chosen yourself as the executor may be appointed by the Master of the High Court.
- There could be extra and unnecessary costs.
- There could be unhappiness and conflict among family members because there are no clear instructions on how to distribute your assets.
Does freedom of testation mean I can choose who to leave my estate to?
Freedom of testation means that you can leave your assets to whoever you like, subject to a few limitations. Firstly, your estate has a common law obligation to support any minor and/or financially dependent children. In addition, your surviving spouse may have a claim against your estate for maintenance in terms of the Maintenance of Surviving Spouse Act. In terms of our law, partners who are married create a legal bond and a duty of support between them. If your surviving spouse is unable to maintain herself financially, she can claim against your estate for the provision of maintenance. In terms of the Pension Funds Act, you can nominate a beneficiary to your retirement fund although the final decision rests with the trustees of the fund. Your marital regime will also determine how you can leave your assets to your heirs in your will. People married in community of property have a joint estate in which they have undivided joint ownership of all the assets. You can therefore only determine what must happen to your 50% ownership of assets in your will. Your spouse will still retain their 50% ownership in the asset. If you are married with the accrual system, your spouse has a claim against your estate for 50% of the difference between the accruals (where their estate is the smaller of the two).
Do all of my assets attract an executor fee?
The good news is no, not all of your assets will attract an Executor fee. As long as beneficiaries are nominated on pre and post retirement products, they will not be included in the estate, and therefore there will be no estate duty or Executor fee charged. With regards to endowments and life assurance, as long as a beneficiary is again nominated, there will be no Executor fee charged, but estate duty may be charged, dependent on who the beneficiary is.
If you are unsure if your Will is valid, if your Will needs to be updated, or you need to put a first Will in place, speak to your Resolute Wealth Private Wealth Manager and we will be happy to assist you in ensuring your wishes are effectively documented, and assist you with any queries you may have.
As Walter Payton said, “Remember, tomorrow is promised to no one”.
