JOHANNESBURG - Your last will and testament is one of the most important documents you’ll ever sign.
While most of us would prefer not to talk about or plan for a time when we’re no longer around, your family will be grateful if you’ve seen to it that your affairs are in order and that your wishes are clearly stipulated. Here’s a handy checklist to help.
1. Is the date of signature on your will more than five years ago?
If it is, you should see a fiduciary specialist to update your will. Personal circumstances often change.
2. Does your current will revoke previous wills made by you?
Your will should have a clause that specifically states that or other testamentary dispositions made by you.
3. Do you have wills that deal separately with your South African and non-South African assets?
The administration is easier if the wills are separated. South African legal terms used in wills are often different to those used in other countries.
4. Have you established the cash requirements in your estate?
Cash shortfalls may delay the winding up of your estate or may cause some of your assets to be sold. Cash shortfalls may be as a result of outstanding liabilities in your estate, including bonds over fixed property, suretyships signed by you that are now being claimed against your estate, transactional debt, medical and last illness expenses, executors’ fees, estate duty and capital gains tax on death, or cash bequests in your current will.
5. Have you negotiated the executors’ fees with your nominated executor and included the agreed fees in your will?
The maximum legal tariff is 3.5% of the gross value of the assets administered by the executor, plus VAT in many instances. A further 6% plus VAT may be charged on income collected by the executor after your death. You can agree on a discounted fee with your nominated executor and ask the drafter of your will to place it on record in the will.
6. Have you nominated guardians to your minor children in your will?
A conversation should be had with the nominated persons to ensure they’re aware of this (and in agreement).
7. Have you directed that bequests to minor children (younger than 18) be handed to their legal guardians or kept in trust until majority age?
If not, bequests to minors may be paid into the Guardian’s Fund and kept under control of the fund until the children are majors.
8. Have you exempted the nominated executor and the trustee(s) of a trust created in your will from the requirement to provide security to the Master of the High Court?
If not, the Master may require them to furnish security, which may be expensive and cause them to not accept appointment, leading to possible delays.
9. Have you considered the consequences of your marital regime on your death (if married)?
A marriage in community of property may mean you can only dispose of your half of the assets in your communal estate in your will. The accrual system may have unintended consequences if you don’t take into account, for instance, that your surviving spouse will first receive the accrual claim proceeds, which may reduce the size of bequests to other persons in your will.
10. Have you dealt with loan assets in your will?
You can bequeath loan assets in your will to the people owing you the loan amounts, thereby cancelling the loans - with the effect that these people don’t have to pay the loan amounts to your estate on your death.
11. Do you maintain your parents or provide towards their maintenance or medical expenses?
You should consider how these expenses will be paid when you’re not there to do so. Your parents can be maintained from a testamentary trust or as a condition to a bequest in your will.
12. Do you have a maintenance liability towards a previous spouse or to children in terms of a divorce order?
Depending on whether the liability carries on after your death, you should provide for payment of this in terms of your will to avoid your estate having to make monthly payments for years to come. This could mean your executor won’t be able to finalise the estate, as he or she may not be able to distribute the residue of the estate.
13. Do you own business interests? If so, have you provided for continuity?
You can enter into a buy-and-sell agreement with an associated life policy to provide the liquidity to your business partner to buy your share of the business.0
Marteen Michau is head of Fiduciary and Tax, Sanlam Private Wealth
PERSONAL FINANCE