A will is a way to spare family rows
Johannesburg - One of the most important documents you will ever sign is your will.
A will spells out who will inherit your money and who will get what property – if you have any – after you die. Even if you are young, you need to have a will, because no-one knows what might happen tomorrow, or even a minute from now.
South African women are particularly slack on this front, according to Rumana Mahomed, manager of Accensis Fiduciary Services. “Statistics show that women neglect writing up a will, and those who do, don’t give the document the attention it deserves. They also believe it can be left to much later in life, but this isn’t a wise thing to do,” says Mahomed.
In essence, a will prevents your nearest and dearest descending into an ugly squabble over who gets what. Many people also include the items of sentimental value, as even these can cause major family rifts if you pass away without communicating your wishes. In your will, you can also make donations to charity if you like.
Having no will means that the state will decide how your estate is divided, while failing to update your will – to account for a new spouse or children, say – can be nothing short of disastrous. You’ve heard the sad stories of young families being left to fend for themselves because a breadwinner’s last will only took care of his/her former spouse and children.
This is what you need to know about drafting your will:
* You can write your own will, as long as it is legally valid, which means you need two competent witnesses to sign it. Funeral Guide South Africa , a resource tool, warns that a line should be ruled through any remaining blank space, so nothing further can be fraudulently added to your will. Also, family members or beneficiaries may not sign as witnesses. You can download a will template, but make sure it’s from a credible source, like www.funeralguide.co.za
* Your will should include not only who will inherit what, but who will act as a guardian if you still have small children. “This guardian would be empowered to take immediate charge over your children and avoid them being shunted among family and friends while still having to deal with their grief. It also avoids the costs and difficulties of family members having to approach a court to choose a guardian without any knowledge of your wishes,” explains Mahomed.
* Be sure to nominate someone you trust to execute your will, that is, to carry out your wishes. Most people nominate their spouse or adult child as an executor of their estate. This enables them the freedom to negotiate a rate and compare and choose the most suitable financial or legal assistance in administering the estate. If there is likely to be conflict among your beneficiaries, however, it is advisable to nominate an independent executor.
* Should your financial situation be complex – in other words you have several properties and investments, you have a business, dependants who require maintenance, handicapped dependants, or overseas assets – it is advisable to get expert assistance and nominate a financial institution or bank as the executor of your will. A complex estate can take years to wind up. You will also need advice on how to reduce estate taxes.
* Many financial institutions offer to draft your will for free, but you should be aware that the institution will require to be nominated the executor and will charge a fee, normally about 3.5 percent of the value of your estate (assets, investments and cash). So the bigger the estate, the bigger their fee.
* Even though an executor’s fee can, by regulation, go above 3.5 percent, you can negotiate the fee with an executor at the time of drafting your will. And be aware that the executor’s fee is not all inclusive and excludes certain fees such as conveyancing fees to transfer property.
* If your children are still small, or you feel they are irresponsible in some way, you can include in your will an instruction called a testamentary trust, which means that on your death, a trustee will manage your assets until a stipulated date when your beneficiaries take control of them. “With the increase of substance abuse amongst our children, the inclusion of a testamentary trust in the will is a useful tool to protect and secure their interests,” says Mahomed.
* Without a will (that is, if you die intestate), the Master of the High Court has to appoint someone to be your executor, and your estate will be dealt with according to rigid and inflexible laws. The basic rule of intestate succession – in other words who inherits what – is that the surviving spouse and/or children and/or nearest blood relations inherit the estate.
Also, your minor children’s inheritance might suffer, since anything they are entitled to receive has to be transferred to the Guardian’s Fund in monetary form, where it will remain until they turn 18. This means that the family home would have to be sold.
* You should update your will about every two years and definitely after a profound change in your personal circumstances, such as marriage or divorce or birth of children.
* When making major bequests, it’s a good idea to express the gift as a percentage of your total estate, and not a fixed sum. The latter won’t take into account your changing estate.
* Copies of wills should be kept with other important documents that will be helpful in winding up your estate such as financial statements, share certificates, etc. Give someone you trust the location of this important information.
Your estate. It sounds a lot grander than it is. Think of it instead as your home, bank accounts, car and any investments/ policies you might have. When you die, all these assets have to be wound up and distributed to your beneficiaries by your executor – the person or institution you’ve nominated in your will to do it.
This is what you should know about estates:
* If the deceased had a funeral policy, and/or life policy, find those first. “You will need to cash in a funeral policy quickly to cover the funeral, and the funds from a life policy will also help to keep things financially sound during those first difficult months of grieving,” advises Theo Miltiadous, attorney at Lowndes Dlamini Attorneys.
You will need a death certificate to liquidate these. The funeral home will obtain the death certificate, which comes from the Department of Home Affairs.
* As soon as a death certificate has been issued, it’s a good idea to start alerting the person’s account contractors (like medical aid, cellphone, insurance policy and security company) to prevent debit orders going through against their estate unnecessarily. The rest will be taken care of by the executor.
* The estate must be reported to Master of the High Court within 14 days. Offices of the Master are in your jurisdiction – namely, Pretoria, Johannesburg, Cape Town, Pietermaritzburg, Grahamstown, Bisho, Umtata, Bloemfontein, Kimberley, Mmabatho/Mafikeng, Polokwane, Durban, Port Elizabeth, Thohoyandou and Nelspruit.
* The appointed executor is usually responsible for this task, but will need various documents, including but not limited to an original death certificate, original will, certified copy of the deceased’s ID, original/certified copy of any marriage certificate, and an inventory of the person’s assets, filled in on an official form.
The Master’s office will then issue a letter of executorship, which takes a few days to a few weeks, depending on how busy the office is.
* If as the next-of-kin you’ve been appointed as the executor, and you are not familiar with the estate reporting procedure, it is advisable to engage an agent like a trusted family lawyer who will then assist to get the letter of executorship . Even if the estate is small, – such as a house, car and a couple of bank accounts – the procedure can get complicated. “You have to fill in official forms, and draw up a Liquidation and Distribution account, including assets and liabilities and items like estate duty. This is where people often get confused and have to find professional assistance anyway,” says Miltiadous.
* If as the next-of-kin you’ve been appointed the executor, and the estate is worth R250 000 or more, the Master’s office will normally instruct that you get assistance from a knowledgeable agent such as a lawyer.
* Once a final statement of liquidation and distribution has been drawn up, it is taken back to the Master of the High Court for approval.
Once approved by the Master, the executor must advertise the liquidation and distribution account in a newspaper and the Government Gazette , to see if there are any objections (from, say, outstanding creditors). This usually takes about a month.
All going well, a reasonably simple estate should be wound up in about six months or less, says Miltiadous. A more complex estate, on the other hand, where properties have to be transferred to beneficiaries etc, could take up to or more than a year.