For some reason setting up our last will and testament makes us think about our own mortality, and so we have a tendency to put it off.
There are still many South African citizens who have not planned for the devolving of their estate. There are certain scenarios that we need to avoid to prevent complications when an estate is being devolved. Many people think that they can simply tell their parents, spouse or friend of their wishes. However if one dies without a will or “intestate”, there are a set rules that a court will apply to the estate. This has major implications for both the deceased person as well as the family they leave behind.
The following article sets out mandatory provisions when drafting your last will and testament and insights that apply to all persons in order to avoid future disputes be it in the courtroom or behind closed doors.
- In short a will can be defined as a legal document which contains the wishes of the person making it (such person must be aged 16 years or older) regarding the distribution of the assets in their estate upon death.
- You are required to be mentally competent when you create the will. You must be able to understand the consequences of same and be in a reasonable state of mind.
- For a will to be valid it must be in writing.
- Two people older than 14 must witness a will (these witnesses cannot be beneficiaries of the will).
- You and the witnesses must initial every page of the will and sign the last page.
- In your will you can, appoint an executor, divide up your assets and appoint a guardian for your children. Where a guardian is not appointed, the state will decide who guardianship will vest with.
- An executor is the person that will make sure that your property is divided up according to your will. The executor settles any outstanding debts. Where no executor is appointed the court will appoint someone (usually a family member). The executor has to reside in the country at the time of your death. In practice, generally, two executors are appointed in your will in order to avoid an instance where one of the appointed executors reside overseas.
- Getting experts to draw up the will and amend it annually can prevent conflicts from occurring. I.e. In the instance where an individual has a life policy where they have named a spouse as the beneficiary, but later divorce that beneficiary and remarries, he may name his new wife in his will as the beneficiary thinking that it will supersede the policy. An expert would pick up this mistake instantly and propose that he change the beneficiary on the policy as well.
- Using an expert to manage your will is beneficial as they will advise you of tax implications relating to your estate and specifically on the importance of appointing a beneficiary in your life policy to ensure that those benefits are not subjected to tax. Further they also ensure that your will is always in a safe place and readably available.
- Finally, estate duty is levied at a rate of 20% on any amount which exceed the allowable rebate of R 3,5 million, therefore this process can cost money so it is advisable to have a life policy or a funeral plan (with appointed beneficiaries) in place to ensure that your family is not saddled with any debt.
Drafting a will and ensuring effective estate planning has been conducted ensures solvency in the estate and prevents insolvency. Working in the legal profession, one sees the common occurrence of estates being devolved in a manner that the deceased would not have intended. Do not let the uncertainty of life, disadvantage them. Draft a will and be prepared.