What to consider when preparing your Last Will & Testament.

Having a Will is arguably one of the most important things you can do for yourself and your family. Not only can a Will legally protect your family and assets, it also gives you the comfort of knowing that the rewards of your life’s work will be distributed and managed according to your wishes, once you have passed on.

It is often said that the only certain things in life are death and taxes, yet there are still many people who die intestate (passing away without a valid Will). As documented in the Business Report on 15 September 2017, 70% of the South African working population do not have Wills.

The following is to be considered when preparing your Will:

Executor

The term “Executor” is the legal term for referring to the person (or people) nominated to carry out your wishes according to your Will.

Ultimately, the executor is the individual that represents your estate and is liable to distribute your assets according to your wishes. Therefore, when choosing your executor, it is important to appoint someone close enough to you, who you trust to respect and implement your wishes. This person doesn’t necessarily have to be professionally qualified, as the executor can appoint a professional to guide them throughout the process and assist with the necessary legal requirements. Something to bear in mind when appointing your executor, should you nominate an external executor is that they are entitled to charge up to 3.50% plus VAT of the gross value of your estate. As a result, we recommend nominating someone who can appoint a professional and negotiate a fee upon your demise.

For the ease of administration, we do not recommend the executor being a non-South African resident, as the process in winding up an estate is usually intensive and requires frequent communication between the executor and the Master. The Master may also request that a non-South African executor provide security before entering upon the administration of the estate.

Always ensure that your nominated executor has agreed to this role as they have the right to decline this position.

Beneficiaries

Beneficiaries are the persons, trusts, charities or organisations that you wish to benefit from your Will. Beneficiaries may receive assets, specific gifts and/or a share in your estate.

A person of any age, including a minor can be a beneficiary. However, if a minor is listed as a beneficiary of property or shares, the executor is responsible for administering the assets of the minor beneficiary in accordance with the terms of the Will. In most cases, the guardian will safe keep the inheritance until the minor becomes of age (18). Alternatively, a trust can be created upon your death, to protect and manage the assets on behalf of your minor, until they become of age, or any other nominated age.

Guardians

When nominating a guardian for your minor children, it is imperative to keep the below factors in mind:

  • take into account the similarities of the potential guardian’s lifestyle, values and religious beliefs, to those of yours
  • who your child currently has a close bond with
  • the required transition that your child would need to make, location/lifestyle and
  • practically, who can physically, emotionally and financially take on the role of looking after your child

Funeral Instructions

Although this is a conversation avoided by most, it is very important to document your funeral instructions in your Will to ensure that those close to you and the executor, are aware of your wishes.

Have you considered whether you want to be buried or cremated? If so, where?

It’s not a legal requirement to document your funeral instructions in your Will, however this will most definitely ease the mourning process knowing that your family are following your wishes.

Conclusion

A Will is one of the most important documents you will draft.

By giving thought to and recording the above very important aspects during your lifetime, not only does it allow you to choose who you would like to receive your assets, but it also very importantly allows you to plan for your estate and the applicable taxes, ensuring that a financial burden is not left on your heirs.

As a reminder, should you die and not have a legal Will in place, you will die Intestate, which allows the Master to have full reign over your estate and distribute the assets as per the Intestate Succession Act 81 of 1987. The winding up of an intestate estate is often a very long and drawn out process, and can take years to resolve.

The reviewing of your Will on a regular basis, is as important as the drafting of your Will. Constant changes in your life can have a drastic impact on the outcome of your estate.

Should you require any assistance with your personal estate planning or any other financial advice, please do not hesitate to contact us.

Article written by: Gerhard Wagner and Hayley Jarret from Independent Wealth Managers