The final contract or legal document of your lifetime will be your Will if you have one. It is also the expression of your final wishes of what should happen to all that you have worked so hard for during your life. A legally valid Will should therefore be the cornerstone document of your estate planning as part of preserving your wealth for your beneficiaries and ensuring it is distributed fairly to them.
This week being National Wills Week in South Africa, attention is drawn to this critically important issue, and participating legal and financial practitioners across the country are offering to draw up wills for free from 17 to 21 September. However, leading financial advisory Carrick Wealth considers this to be so important that it provides a professional will-drafting service for free to its clients not only for one week of the year, but as an ongoing free service.
Tax-efficient estate planning that includes a valid and up-to-date will should always be part of your integrated long-term financial plan. But, as with most financial and investment planning matters, it could become a complex exercise around issues such as the administration of the deceased estate, trusts, outstanding debts, tax efficiency, costs and fees, or various legal issues. It is therefore always best to obtain professional advice.
Important factors to consider when drawing up your Will
- Ensuring that your Will meets all legal requirements, including that it has been signed in the presence of two corroborative, co-signing witnesses and that you have appointed one or more trusted persons as executors, preferably a professional person.
- Ensuring it stipulates clearly how and to whom your assets should be distributed and deals with any family trusts that may conflict with it.
- Making sure that all estate duty implications have been weighed up and with a clear plan to minimise the tax burden, which may include the option of a more tax-beneficial offshore jurisdiction.
- Providing in your Will for the payment of associated legal and other expenses and ensuring it stipulates how debts in the estate should be settled.
- Ensuring correct provision is made for minors, who by law cannot inherit assets while they are still minors and therefore guardians have to be designated for them. To protect a minor child’s inheritance, it is best to set up a trust for them.
- Making sure someone you trust knows where your Will is being kept, knows who the executors of your estate are, and have access to online passwords and to documents relating to bank accounts and other documents of importance.
When should you update your Will?
Regularly revise and update your Will to incorporate any changes in circumstances affecting it after life events such as:
- Having acquired substantial new investments or new assets, such as a new home;
- After any changes in your marital status including common-law relationships (living together or life partners);
- The addition of new family members who are minors, or the change in status of minors who have legally come of age;
- After the death of a partner or beneficiary;
- After a major life-threatening illness or acquiring a chronic medical condition; and
- Upon any increase in the risk to your personal safety, whether in work, sport activities or any other.
Also, obtain professional advice to update your Will if you become aware of any changes in laws and regulations relating to estate duty or inheritance tax, to trusts, or to any other issues in your will that may be affected.
What happens if you die without a will?
Dying without a Will, or if your valid Will cannot be found after your death, means you die intestate and your estate will be wound up in terms of the Law of Intestate Succession. This is to be avoided at all costs. In such a case the Master of the High Court will nominate a person – not of your choice – to administer the estate and wound it up. This can be a long, drawn-out affair, incurring high costs for your estate and is often subject to legal challenges. The bottom-line is, it is likely to leave your dependents and loved ones with much anxiety, uncertainty and financial stress and insecurity until your estate has been settled. No-one wants that.
“If you are without a will, you should have one drawn up without further delay. Or, if you do have one that was written years ago at your bank or lawyer and is lying forgotten in a vault or the bottom of a drawer somewhere, now is the time to update it, as circumstances change over the years,” says Paul de Waal, Director: Wealth Management and Advisory at Carrick Wealth.