• The Kaplan Team

LET'S TALK What is a will?

Updated: Apr 7

Simply put, a will is a legal document which describes how a person’s assets will be distributed after death.


WHY SHOULD YOU HAVE A WILL:

  • You are able to dispose of your assets according to your wishes;

  • You can incorporate estate planning;

  • You can protect the assets, example testamentary trust for minors, insolvent beneficiaries;

  • You can nominate a guardian for your minor children;

  • You can nominate an Executor and Trustee of your choice bearing in mind that if they do not have the necessary experience, the Master will insist of the appointment of an agent to assist with the administration process;

  • You can incorporate your preferred funeral plans;

  • Complications in finalising offshore estates could arise should the Wills not be drafted in accordance with the laws of the respective country, example you execute a worldwide will and include a usufruct which is unknown in terms of British Law;

  • Include clauses which offer additional protection for your beneficiaries example marital exclusion which expressly excludes inheritance from consequences of future or existing marriages in the event of their dissolution.

  • Include clauses which allow for broader executer and trustee powers example Executor entering into lease agreement during the administration of the estate, trustee investing trust assets in assets other than fixed interest investments prescribed by Trust Property Control Act.

  • The process of working through the information required to draft the Wills highlights various important matters, example:

  1. Ascertaining whether you have sufficient cash in your estate to settle the liabilities, example conveyancing, SARS, amounts owing as at date of death; Executors Fees etc. From a practical perspective, the life policies who have nominated beneficiaries will fall outside of the estate, be careful not to bequeath your illiquid estate to a beneficiary who is not nominated as a beneficiary of the life policy.

  2. Remember accrual claims are settled before the balance of the estate is distributed;

  3. Be aware of maintenance obligations in terms of an Order of Divorce, this obligation is not extinguished on death and provision must be made for this claim which will also be settled before the balance of the estate is distributed in terms of the Will.

  4. Make sure that want you are wanting to do is practical, example if you are married in community of property you are entitled to deal with your half share of the joint estate as you please, but remember that you are bequeath one half share of a motor car, one half share of a firearm, etc.

  5. Be aware that assets that are held in a trust, company do not belong to you - they belong to the trust, company and so on. The asset in your estate would usually be in the form of a loan account. Make sure that you deal with this loan account correctly to avoid complications, example the surviving spouse is the sole beneficiary of your estate but is not included as a beneficiary in your trust deed. If there is an amount owing to your estate by way of a loan account, the heir could insist on the repayment of the loan which would trigger potential liquidity issues in the trust. Rather bequeath the loan account back to the Trust.


WHAT HAPPENS IF YOU DIE WITHOUT A WILL:

  • Should you die without a Will, the laws of Intestate succession will govern how your assets are to be distributed.

  • This could mean that people whom you did not want to inherit from you, could inherit.

  • A further delay in proceeding with the administration of the Estate could be the appointment of an Executor who may have to provide security to the Master of the High Court at the expense of the estate.

  • In practise you can end up with a surviving spouse who is perhaps a second or third wife co-owing a fixed property with the deceased's children from his first marriage who are all under 18 years of age.


WHEN TO UPDATE YOUR WILL:

  • Marriage: amend your Will to leave your estate to your spouse

  • Civil Union registered in terms of Civil Union Act:  amend your Will to leave your estate to your spouse

  • Permanent Relationship not registered in terms of Civil Union Act: amend your Will to make provision for your partner as these relationships do not enjoy the same protection as a registered Civil Union.

  • Birth: make provision for your children as heirs in your estate, as well as the creation of Testamentary Trusts, failing which all assets are sold and paid to the Guardians Fund until the beneficiary attains the age of 18 (eighteen) years of age, nomination of guardian in the event of both natural guardians passing away.

  • Divorce: you have 3 (Three) months from the date of your divorce to amend your Will, should you fail to do so your ex-spouse will inherit.

  • Loan Accounts – balance of loan accounts left to Trusts, Creditor will trigger Capital Gains Tax Implications, therefore alternate provisions need to be made.

  • Insolvency: the inheritance of a beneficiary who is insolvent/un-rehabilitated insolvent can be protected against their creditors.

  • Inheritance: receipt of a large sum of money/asset may necessitate  Estate Planning Amendment to Age of Majority:  now reduced to 18 years of age – potential complications regarding bewind trusts.


NOMINATING AN EXECUTOR:

An executor is the person who will manage and administer your estate upon your death.

It is wise to nominate a practitioner who has experience in this field.


CAN I MAKE MY OWN WILL?

Drawing up a Will is not simple.

It is important to seek the services of a professional who has experience in the drafting of Wills, to avoid potential litigation over a poorly drawn Will. Case Law is littered with examples of poorly drafted Wills.

Example: you exclude a testamentary trust for a minor beneficiary - funds are paid to guardians fund; the formalities are not complied with, example there are no witnesses or individuals who are disqualified from witnessing the will do in fact witness the document.

Remember: your cheapest job is usually your most expensive!


WHO CAN MAKE A WILL?

Any person who is over the age of 16 years of age and has the necessary legal capacity.


VALUE ADDS OFFERED BY KAPLANS:

We will keep your original Will in safe custody, free of charge.


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