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So that you can decide who your beneficiaries should be and appoint a person or institution as the executor of your estate. It will also place you in a position to appoint a guardian of your choice to take care of your minor children, if you have any.
Inviting trouble - many feel that if they think about writing a Will, they would actually cause their death or misfortune.
Good understanding among children – others feel that their children are responsible enough to share the property and liabilities among themselves; therefore a Will is not important.
Property is not valuable enough – some people believe that unless you have property worth millions, a Will is not needed.
There is enough time for drawing up a Will – many people think that they are too young to think about death. They feel that only people who are on their death beds should consider drawing up a Will.
Creates a rift in the family – drawing up a Will could cause conflict among family members.
If you die without a Will, your estate will devolve in terms of the law of intestate succession. This means that the State will decide how and in what proportions to share your assets among your close relatives. This may include beneficiaries whom you may not have wished to benefit or may exclude persons who you would have preferred to benefit. The Master will appoint a guardian for your minor children and their inheritance will go to the Guardians Fund. Finally, when a person dies intestate, the Master appoints an executor of the estate.
Identify and list all the assets of the deceased;
Receive payments that are due to the estate such as interest, dividends, proceeds of policies and other income (e.g. unpaid salary, leave pay and other company benefits);
Give notice to creditors to prove their claims;
Pay funeral bills, outstanding debts and valid claims;
File and pay income and estate taxes;
Identify who is going to get what and how much; and distribute it as per the instructions set out in the Will.
It is important to have a person with the necessary knowledge and expertise to draw up your Will. A law firm, your bank, an insurance company or a trust company can help you in drawing up a Will. Once the Will is fully completed, you sign and date it in the presence of two witnesses in order for it to be valid.
The name and identification details of the executor of your estate.
The name and ID number of your spouse and how you are married (in community of property, out of community of property, etc.)
The full names and ID numbers of all your children including adopted and stepchildren, you wish to benefit from your Will.
The names and ID numbers of any grandchildren you would like to include.
Details of the assets you wish to be donated.
The name and contact details of a guardian in case you have minor children.
Details of any other party or institution you wish to benefit.
The above items will form part of your checklist which can assist you when drawing up your Will.
In many instances, Wills are used to direct the lives of beneficiaries. This is not recommendable. However, you can arrange that your children be given control of their assets at specified stages of their lives. For example, the first one-third of their inheritance becomes available at the age of 21 with the remainder at the age of 25 years or, if there is a good reason, even later. Usually, these goals are achieved by setting up a trust in your Will. If you do, you will also need to provide the full particulars of a trustee and the terms of the trust.
The purpose of a trust is to protect the interests of your dependants at a stage where they are unable to do so themselves. A lawyer, a bank or a registered financial adviser can assist you to set up a trust. A trust can own property, receive donations and inherit money from your estate when you die. What makes a trust so secure is the fact that its decisions are taken by the trustees you appoint when you create it. The beneficiaries can only claim their benefit at the age or time provided in the Will.
The costs involved in drawing up a Will include the drafting fee of the professional; a fee for the safekeeping of your Will as well as an administration fee to wind up the deceased person’s estate (which is a percentage of the total assets of the deceased). There is noset amount for these charges. They differ from professional to professional. Maximum executor’s fees are provided for by law.
Did you divorce recently?
Is provision made for a former spouse or minor children from previous marriages?
Do you have any offshore assets? If so, has provision been made for an offshore Will, or does the current Will take this into account?
It is not a good idea to do your own Will. Experienced professionals should draft Wills. Wills drafted by those with little or no experience usually lead to problems. Remember: when a Will “speaks”, the person who made it is no longer there!
Government levies estate duty, which is a form of tax, on the estate after your death. No estate duty has to be paid if your estate, which may include property, insurance and money, is worth less than a certain amount. You can find out what that amount is from the South African Revenue Service (SARS). However, your estate will have to pay 20% estate duty on any net amount over R3 500 000. Estates are also subject to Capital Gains Tax.
There is no formal requirement for its safekeeping but you should keep it in a safe, easy-to-access place. However, most banks, accountants, trustee firms, lawyers and registered financial advisers keep Wills on behalf of their clients. It is advisable to make a copy of your Will, marked clearly with the word “Copy”. Also make a note on the copy where the original is kept. Importantly, make sure you inform the executor where the Will is kept.
Wills need to be revised from time to time, especially if important events have taken place in the life of the testator. These events may include the birth of a child, marriage, divorce, death of a beneficiary, gaining of property that is not part of the existing Will, etc.
There is no limitation to the number of times you want to change your Will as circumstances, important to the instructions of your Will, may change. There are steps a testator should take to make sure the changes are properly expressed and included to avoid confusion among beneficiaries after your death.
Will – A Will is a legal document in which you indicate what should happen to your money, property and valuable belongings when you die. In other words, a Will gives you say even after your death as to how your estate should be distributed or who should benefit from it. It is also known as a testament.
Intestate – It means that you die without leaving a valid Will.
Testate – If a person has a valid Will at the time of death.
Testator – is the owner of a Will or a testament.
Estate – It refers to everything you own; all your assets (movable property and immovable property) as well as your liabilities (debts).
Assets – It may include items such as your house and contents, cars, shares, investments as well as retirement benefits etc.
Liabilities – These are items such as outstanding debts, funeral costs, estate duty, etc.
Estate duty – is tax payable from the estate left by a deceased person before the estate is distributed amongst the beneficiaries. This applies only to large estates.
Executor – is the person appointed by the testator who is tasked to carry out the testator’s wishes, after his/her death.
Bequest – is a gift or benefit made by the testator of property such as money, jewellery or a house to a person or organisation.
Beneficiaries – Are the persons and/or organisations you name in your Will to inherit your estate in the event of your death.
Trust – Is an institution where your assets can be controlled and administered before they are distributed to the beneficiaries.
Settlor – Is the person who sets up a trust.
Trustee – Is the person or entity such as a bank or trust company that controls the trust and is responsible for managing the trust assets until they are distributed to the beneficiaries.
Capital Gains Tax (CGT) – is tax paid on the resale of assets and the happening of other events such as the death of a person, on the growth of those assets.
Master – A Master of the High Court is appointed for every provincial division of the HighCourt of South Africa. Some of the Master’s important duties include the administration of estates of deceased and insolvent persons; handling and assessment of estate duties (taxes); supervision of trustees; appointment of fair and capable persons such as executors, trustees, curators and liquidators; etc.
The Law Society of South Africa
Tel: (012) 338 5800
Fax: (012) 362 0969
PO Box 1493; PRETORIA; 0001
123 Paul Kruger Street; PRETORIA; 0001
Tel: 033 345 1304
PO Box 1454; PIETERMARITZBURG; 3200
200 Hoosen Haffejee Street; PIETERMARITZBURG; 3200
Tel: (021) 443 6700
PO Box 4528; CAPE TOWN; 8000
29 & 30th Floor; Absa Centre; 2 Riebeeck Street;
CAPE TOWN; 8000
Tel: (051) 447 3237
PO Box 9; BLOEMFONTEIN; 9300
139 Zastron Street; BLOEMFONTEIN; 9300
This article is funded by the Financial Services Consumer Education Foundation in the interests of financial literacy.