A legally valid will is arguably one of the most important things you can do for yourself and your family. It determines who should have your money, property and possessions when you die and should be the cornerstone document of your estate planning.
Drawing up a will is critically important. If you die without one, you die intestate and important decisions such as who receives your property and other assets, are left to a person nominated by the Master of the High Court. Besides being a long process, often subject to legal challenges and high costs, it can be very stressful – financially and emotionally – for the people left behind.
“Tax-efficient estate planning that includes a valid and up-to-date will should always be part of your integrated long-term financial plan,” says Anthony Palmer, Group Commercial Director at Carrick Wealth. “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.”
10 reasons to have a will
Abigail Reynolds, Admitted Attorney, lists the benefits of having a will:
- A will allows you to specify who benefits from your estate and in what portion. If you don’t have a will you have no control over this and people you care about may not get what you wanted.
- It helps clarify your final wishes and avoid family disputes.
- It allows you to nominate an executor of your choice. That person is responsible for the administration of your final estate and giving effect to your final wishes.
- It speeds up the process of the winding up of an estate, which can take up to a year or two.
- A will is essential if you have dependents. You can specify how your assets can be used to care for them, such as housing, education and medical needs.
- If you have minors(under age 18) you can set up a testamentary trust for them in the will. The trustees can manage the money they inherit on their behalf until they are allowed to access the funds.
- You can appoint a guardian in your will.
- It allows you to allocate a donation to a charity of your choice.
- You can record any other wishes in your will, such as organ donation, burial or cremation,and who will care for your pets.
- If you have assets offshore, you can include them in your South African will or draw up a separate will for the countries in question. You should get advice from a professional to ensure that all estate duty implications have been considered and the tax burden is minimised.
When should I update my will?
You should update your will after any major life event or change in circumstances, such as a change in marital status; addition of family members; death of a beneficiary; acquiring new investments or assets; after a life-threatening illness or acquiring a chronic medical condition; and upon any increase in the risk to your personal safety (work, sport or other). Palmer also suggests you obtain professional advice if you become aware of any changes in laws and regulations relating to estate duty or inheritance tax, trusts, or to any other issues in your will that may be affected.
Keep in mind that your will needs to be signed in front of two witnesses and they may not be beneficiaries. You need to appoint a trusted executor as well as have someone you trust who knows where your will is kept, who the executors of your estate are and has access to online passwords and documents relating to bank accounts and other documents of importance.