Drawing up a will is an important part of financial planning for all South Africans and not just the wealthy. Most people own “assets” or items of value, even if it is only a few items of jewellery, furniture and a savings account.
Drawing up a will is especially important for single women in South Africa as many are the breadwinners and primary caregivers for their children, grandchildren or extended families.
Some people have told me that they are too young and haven’t “made it yet”, so drawing up a will is not worth the time, while others have told me they are too old, too poor or too uneducated to need a will.
I’ve seen the devastation that a lack of financial planning has on family members. There are many heart-breaking financial stories that I wish I could have helped to avoid that resulted because of myths about financial planning.
Allow me to bust them for you:
* Myth #1: It’s too expensive to draw up a will. It doesn’t have to be expensive.
* Myth #2: I don’t have time to draw up a will. You don’t need more than 15 minutes - (it takes) less time than it takes to watch your favourite soapy - to set a comprehensive will.
* Myth #3: I’m not wealthy enough to get a will drawn up. Wealth isn’t the real measure of whether you need a will or not. Are you married, do you have property or a car in your name, have you been recently divorced or widowed, do you have children or do you have other people who depend on you financially? Have you been living with someone for some time or do want someone you care about to receive something sentimental? If you answered yes to any of these you should have a will drawn up.
* Myth #4: The only thing I own is some furniture and a car on loan from the bank, so why would I need a will? Many people believe that their estates are small as their car or house is still being paid for. The value of your estate in not based on the net value of your assets, but rather on their current value even if you still owe on it. As soon as your total assets are in excess of R250000 the estate will be administered according to the will under the administration of Estates Act.
* Myth #5: I’m not married and don’t have a partner, so whatever money is in my account when I die will go to my kids right?
Your bank account forms part of the assets of an estate and most bank accounts are frozen when someone dies. Having a will and having qualified executors who know the various elements of your estate is essential to speed up the process and get cash in an account paid to your children. Even safer is to set up a testamentary trust in your will.
Champ Thekiso is the director and co-founder of www.smartwill.co.za.
- PERSONAL FINANCE