“Your Greatness is not what you have, but what you give”
Why do you need a will?
Every competent person of 16 years and older who owns assets and is mentally able to understand the results of his or her actions, should have a will. Why? If a person dies without a will, it could lead to severe administrative, tax and legal problems and possibly also lead to financial losses.
A will should comply with certain legal requirements to be valid. In your will, you determine how your assets should be divided, and nominate an executor and trustee to take care of the division of the estate’s assets and to handle the administration of any trust assets.
You have the right to name heirs as you wish in your will. If you don’t, your assets will be divided according to the Intestate Succession Act, No 81 of 1987, after your death – which could mean that persons who you would have preferred not to inherit from you, could inherit.
Your will therefore determines the future of everything that you’ve built up through the years – and your heirs can be directly disadvantaged if you don’t plan correctly. Estate duty, income tax, VAT and capital gains tax (CGT) can take a big chunk out of your estate if your planning is wrong. It thus goes without saying that you should get the advice of a specialist or adviser for the drafting of your will.
To find peace of mind, do your estate planning calculations to determine if your wishes at your death will be feasible and executable. Will there be enough cash to pay all your liabilities and estate costs without forced sale/s of some of your assets? Contact a financial planner direct or contact a financial advisor in your town if you should need more information or advice, or you can continue and complete the application to draft a last will and testament.
A few tips before you draft your Last Will and Testament
- If you wish to leave your assets to your spouse and children, it is not a good idea to divide them amongst them equally– except if your estate consists of cash only. To transfer a home into the names of both the spouse and children’s names, may lead to practical problems and family disputes, especially if the children should marry. To transfer a motor vehicle into the names of four people for example is also not practical.
- It is not advisable to include funeral arrangements in your will. The reason for this is that your will is typically only read after the funeral. Rather inform your family about your funeral wishes beforehand.
- If you have minor children, you should consider, in the absence of a guardian after your death, appointing someone as their guardian in your will. If you are divorced and paying maintenance, you should keep this responsibility towards your former spouse and children in mind when drafting your will.
- It is very important to identify the person you wish to appoint as executor of your will. It is the task of the executor to administer your estate in accordance with the stipulations of your will and to look after the best interest of your heirs.
- Keep your will up to date by revising it regularly.
- Make sure your will is valid. The Wills Act stipulates exactly what a will should conform to. Ask an expert if you’re unsure.
- Avoid commands such as that all assets have to be sold.
- Make provision for the protection of heirs such as minors and spendthrifts. A testamentary trust is an ideal solution in most instances.
- Heirs must be clearly identified by full names, surname, relationship and, if available, identity number.
- Please note that certain monies such as annuities, pensions and group insurance paid outside the estate by the Board of Trustees of the fund/scheme do not form part of an estate. The same goes for a ceded policy or a policy with a nominated beneficiary. Your will only disposes of assets that forms part of your estate.
- The word “wish” in a will must also be used correctly so that the testator’s intentions are very clear to the executor. If, for example, the testator expressed the wish that his estate assets be sold, doubt could sometimes arise, depending on the exact wording, as to whether it is a directive or only a wish. If the word “direct” is used, and depending on the exact wording of the specific bequest, there should be no doubt that the executor has to carry out such directive and sell the assets.
Frequently Asked Questions
If one dies without a valid will, do one's assets accrue to the State?
No, but also yes. Inheritance occurs in terms of the Intestate Succession Act, No. 81 of 1987. Your assets will be deposited in the Master of the High Court’s Guardian Fund only if there is no spouse (civil union partner), descendant (a legally adopted child is also a descendant), parent or descendant of a parent or other nearest blood relation. Only if the assets have not been claimed by a legitimate heir will they be forfeited to the State after thirty years.
Does a nominated executor hold this office during the life of the testator?
No. An executor may perform his duties only after the death of the testator and once the Master has issued a letter of executorship.
Is a verbal promise of an inheritance valid?
Definitely not. Inheritance may occur only in terms of a valid will or in terms of the Intestate Succession Act.
Is an inheritance a right?
No. It is a privilege. Your spouse (partner) and dependants may bring a claim for maintenance against your estate if they qualify for it and adequate provision has not been made for them, and also if they do not receive adequate benefits under your retirement funds or proceeds of policies in respect of which they are the beneficiaries.
Are stipulations and provisions in a will restricted?
Definitely. For example, in your will you cannot invalidate acts, regulations and rules or be prescriptive about them. Nor may you make stipulations that are contrary to good morals, for example by making your son’s inheritance conditional upon his divorcing his wife. You may also not divest a parent of guardianship.
Can a will also serve as a contract or agreement?
No. They are two different documents. A contract is an agreement between two or more persons and in your will you cannot make unilateral stipulations that must be forced on other persons, for example with regard to partnerships and loans. You may refer to them in your will, but this is not enforceable and is only for information purposes.
Is it the duty of an executor to make funeral arrangements?
No. However, if he does so it is in his personal capacity. Only funeral costs (cremation) and the cost of a gravestone (niche) are permissible claims against the estate. Other costs, for example telephone and travelling costs and the cost of refreshments, cannot be claimed unless authorised in the will.
Do signing powers and power of attorney lapse at death?
Yes. Once he has been appointed by the Master, only the executor may, for example, withdraw funds and sign documents.
Does interest on investments and debt cease at death?
No. Interest on your savings account and investments only ceases upon withdrawal or transfer (if transferable, such as shares and unit trusts when they continue to the benefit of the transferee). Interest on debt, such as bonds and hire-purchase agreements, ceases only when the debt has been redeemed in full (or in some cases when it is taken over by an heir). On the other hand, creditors may not charge interest if no interest was charged (or if they were not entitled to interest) prior to the death of the testator, and they must wait for payment until the executor is able to effect payment.
Do contracts and lawsuits lapse at death?
No, but sometimes also yes. The executor must honour contracts entered into by the deceased, for example the buying or selling of property, and leases, unless the contracts contain stipulations that the agreements will lapse in the event of death. Most lawsuits and court cases will continue, but cases such as a charge of driving under the influence will lapse automatically.
Is it true that the longer it takes to administer an estate, the higher the executor's fee?
No. There is only one rate – different rates are not charged according to whether an estate is easy or difficult to administer.
Does the executor summarily sell all assets?
No. He sells only what is necessary to settle claims or as stipulated in the will or at the request of an heir. Transferable assets are transferred unless there is a restriction, such as the Subdivision of Agricultural Land Act.
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