Estate Planning 101
It’s always the small things that catch you out.
I t’s by no means as easy subject to broach, and talking about and planning for death is intimidating and unsettling. But, it is something you should prioritise for you and your loved ones’ sake. Death is inevitable, and its consequences don’t just affect you, so it’s best to plan for those around you. After all, you want to be in control of who be benefits from your life’s work. Recent research conducted by life insurance company 1Life indicated that 70% of their clients don’t have a Will in place. Furthermore, the survey revealed that a significant amount of people don’t know what a Will entails, where to get one drawn up and, and don’t deem it necessary.
Let’s look at the ins and out of drawing up a Will and why it’s an essential part of life.
Dying without a Will in place
Drawing up a Will is about taking control of your estate and taking care of those you leave behind. Should you die without a Will, your estate will be distributed in terms of the law of intestate succession. This means that beneficiaries you may never have wished to inherit might benefit, while those that you genuinely care for and would want to benefit might be left with no legal entitlement to your estate or assets.
Having a valid Will is a surefire way to avoid unintended consequences. There are also many other benefits of having a Will, such as the ability to appoint guardians for any minor children, keeping a helpful record of assets that surviving relatives might not be aware of, limiting taxes payable on deceased estates, important decisions regarding medical care should a person be unable to communicate his or her wishes.
Getting a legal expert to help you draw up a Will
It is advisable to have a person with the necessary legal knowledge and expertise, such as an attorney draw up your Will. Attorneys have expert knowledge that will ensure that your Will is clear, concise and reflects your true intentions. Besides, you don’t want an unnecessary error rendering your Will invalid. Attorneys also understand tax and other financial implications that go hand in hand with dividing your estate.
You do have the option of drawing up a Will yourself but be warned; South African law has strict rules and procedures when it comes to Wills and places a lot of emphasis on authenticity and validity. It’s not like anyone can call or send an email to the testator (person drawing up the Will) after his or her death.
Here are the basics to keep in mind:
- A Will must be in writing. That means no plain handwritten or typed documents, oral Wills or video recordings.
- The Will must be signed by the testator on each page, as well as at the end of the document (last page).
- The testator should sign the Will in the presence of 2 or more witnesses. These witnesses should be at least 14 years old and competent to give evidence in court. It is not required that the witnesses know the content of the Will, just that they are witnessing that it is the testator’s Will. It’s essential to keep in mind is that no witness may inherit in terms of a Will.
- The witnesses must also, in the presence of the testator and each other, sign the Will at the end of the document and not on each page.
- Though not a requirement, it may be beneficial to place a date on the Will. In the case that the testator leaves behind more than one Will, this will help determine which one was the last and final.
Do I need a Will if I’m single?
One of the biggest misconceptions amongst singles is that it is not worth having a Will unless they get married and own property worth millions. The truth is, if you earn a salary, have savings in the bank, own a few personal belongings, furniture, possibly a car, you should consider having a Will drawn up, whether the total value of your property is R10 000 or R100 000. More and more people are involved in serious relationships and live with their partner without getting married for some time, or at all. After years of planning for the future and making financial decisions together, these couples often only realise the importance of a Will when it is too late. With no Will, one often sees the surviving partner left in a disadvantaged position.
It is vital to revise an existing Will when significant events, such as marriage or the birth of children, take place in your life. You would probably want to include your loved ones in your Will, and ensure that they are adequately protected and cared for after you are gone. An outdated Will could have unintended consequences, and result in a spouse or child not benefiting at all. If your Will was, for example, never updated after marriage, and you left all your belongings to a sibling, your sibling would benefit while your wife and children would be disadvantaged.
Having a Will in place for the sake of your children
Again, talking about death, especially with children, is no easy task. And while every family’s situation is unique, death is a common denominator. Children need to understand the purpose of a Will and what the process will be when it comes into effect. What’s more, your children will benefit from you having a Will in the following ways:
- It relieves stress and anxiety: a Will provides immense peace of mind for your loved ones because they will have a clear guide on how to handle the allocate of finances and assets.
- Their best interests are protected: whether it is to ensure that they can finance their education or property investment, a Will can assist with these critical aspects of life.
- Reducing inheritance tax: large amounts of tax on inheritance can be avoided with a proper Will in place. It allows you to create a structure in which your assets do not become part of the general estate when you pass on.
Bump in Salary
It’s important to remember is that as your wealth increases, your estate increases too. You might purchase additional property or make a few extra financial investments that your current Will doesn’t take into account. Should any of these properties or investments not be included in your will, they might become the property of relatives you wouldn’t have wanted to benefit.
The importance of an updated expertly drafted Will cannot be stressed enough. It’s all about protecting your loved ones and helping them move on a little more easily once you pass away. Remember, the sooner, the better as you never know when death will come knocking.
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*The information in article does not, and is not intended to, constitute financial advice and materials on this site are for general informational purposes only.
