It is essential that that one understands the need for and benefits of a Will and some pitfalls to avoid. Unfortunately a large number of South Africans with reasonable wealth do not possess a valid and up-to-date Will. A negligent or too casual attitude on the part of the individual towards having in place a proper Will, often means that someone else must do the cleaning up afterwards in the event of the individuals untimely death-and always at much greater cost in time, frustration and money as compared with having effortlessly executed the Will in the first place.
1. The benefits of a properly drafted Will
There are many good reasons for having an up-to-date Will, inter alia:
1.1. Choice of heirs
It enables the testator to choose his heirs and beneficiaries in a manner, which varies the laws of intestate division. Furthermore, it enables the planner to prescribe the extent of entitlement, and upon what conditions persons may benefit. If you die intestate i.e. without a Will the law will choose your beneficiaries for you, and this may be serious.
1.2. Choice of Executor
The Will allows one the opportunity to appoint an executor of choice, rather than leaving this difficult and time-consuming task to be done by one’s family after death. Not having a Will means foregoing the opportunity to choose the desired caliber of executor, but it also gives rise to unnecessary frustration for one’s family and delays in the administrative process. Depending upon who is ultimately appointed as executor, there is the likelihood that the Master of the High Court will request the provision of security-which again constitutes an unnecessary cost for the estate and a further delay in having to raise such security. The point here is that a Will permits for simpler, faster and cheaper winding up of the estate at minimal inconvenience to the family and interested parties. The complicated procedures of intestate succession are thereby eliminated.
1.3 Choice of guardian
Primarily, the Will allows one to nominate guardians for minor children. The right to nominate (rather than appoint) guardians in one’s Will is very important in the case of single parents. The Will also enables one to give specific directions (and make specific provisions) as to the upbringing and education of children.
1.4 Choice of administrator/investment manager: Minor’s money
The well being of minor children is of paramount importance in the event of death of a parent, and the existence of a Will permits the necessary financial provisions to be put in place for their benefit. In the absence of a Will (and, for that matter, in the absence of an appropriate Trust contained in the Will), funds available for one’s minor children must be held in the Guardian’s Fund (at the Master’s Office).
Funds held in the Guardian’s Fund are not freely accessible (proper written justification is necessary for each withdrawal on the minor’s behalf) and constraints exist upon the financial returns achievable (the Master’s interest rates are generally below market rates).
Having a Will which contains a Trust administered by one’s personal appointee thus avoids having to maintain one’s surviving minors through the impersonal and bureaucratic mechanisms of the Guardian’s Fund.
1.5 Estate planning vehicle
Irrespective of estate size, and whether or not use has already been made of estate planning via Trusts, the Will on its own constitutes an effective and important instrument of sound estate planning-enabling the testator to make use of the various estate duty concessions (e.g. the S4 (q) spouse deduction, inter alia). One is also able through one’s Will to affect both income tax and estate duty consequences, not only as regards the estate, but also the beneficiaries.
1.6 Ability to exclude property
The Will permits exclusionary safeguards to be applied in protection of a beneficiary’s inheritance being exposed to the pickings of the other spouse or of creditors, or falling into the joint estate, or being subject to the other spouse’s accrual claim.
1.7 Varying common or statutory law
Certain legal consequences, for instance the rights of illegitimate or adopted children to inherit, may be varied by Will.
It is recommended that clients review their Wills at least every three years, as well as after certain important events such as the establishment of an inter vivos trust, the birth of a child, the death of a spouse or beneficiary, upon marriage, remarriage or divorce, upon insolvency, in the event of a material change in financial circumstances.
We at Anthony Whatmore & Company have a specialized Trust department which undertakes the drafting of Wills, winding up and administration of deceased estates, formation of intervivos trusts, giving specialist advise on wealth and asset protection, administration of testamentary trusts and general estate planning. We’d be happy to meet with you to discuss your specific requirements, any concerns you may have or to advise on estate planning in general.