“Oh, the shock and horror”, laments the social media darling to her gasping social media audience. “If you die without a Will, the big-bad-wolf Government will take all you have, including your children”. Hurry to the business I am promoting so selflessly to you and save your wealth and save your children.”
“Huh?” is the reaction from the estate planning fraternity.
OK, darlings, so let’s see what will really happen to your assets and your kids when you die without a Will.
Fake News Buster No. 1:
First of all, the State will not take control of your assets. Your family will have to nominate an executor to take control of your estate and to administer it in terms of the law. (If you had a Will, you could have nominated that person yourself.) Although your family might nominate a person, he/she still needs to be appointed by the Master of the High Court (“the Master”) to act as the executor before he/she can deal with your assets in any way. If such a person is a layperson, the Master might request that an agent be appointed to assist the layperson. The agent may be an attorney, accountant, or trust company.
Fake News Buster No. 2:
Your children will also not be snatched away and dropped off at some government facility, but they will be left in the care of their surviving parent or with other family members if both parents are deceased. When family members are not willing or able to be the legal guardian of your children, a court may step in to decide where your children should be placed; however, the best interest of your children will be of the utmost importance when a decision is made.*
(As a side note, some of us who have been locked up with kids for 18 months now, quite liked the fake news and nearly destroyed our Wills.)
But I am digressing……
Fake News Buster No. 3:
Without a valid Will, your assets will be distributed in terms of prescribed rules (according to the Intestate Succession Act) and not according to your specified wishes. This might mean the brother, with whom you had no relationship, can receive a share of your estate and your minor children’s share will be transferred to the Guardian’s Fund (a state institution and perhaps where some confusion might be). We will discuss the intestate succession rules* and the Guardian’s Fund* in separate articles.
Oh, the dramatic allure of a half-truth or getting hold of the wrong end of the stick…….
Fake News Buster No. 4:
Nothing in life is free.
The “free Will”-service is usually paid through commission earned on some life cover product* you buy or an executor charge of up to 3.5% plus VAT of the value of your estate. If your estate is worth R10 million, that would be a fee of R350 000, and the commission on selling a life policy is so much better than having to earn a professional fee for giving boring (correct) advice.
Fake News Buster No. 5:
What you pay is what you get. The Will might be free, but often, the advice is completely absent, or worse, worthless (you get it? free = worthless). Strategic estate planning is 95% of the job, drafting the Will is 5%. It’s no use having a Will without doing the estate planning. The estate planning is needed in order to know what your Will should look like.
Remember, most things are pretty standard, unless they aren’t and most things are pretty simple until they become complex.
So how do I know what should not be standard and when things are complex?
Well, let’s list a few:
- Composite families are complex.
- In community marriages are complex.
- Accrual claims in estates are complex.
- Having young children and figuring out who should look after them is complex.
- Having business partners is complex.
- Catering for parents who need to be looked after is complex.
- Leaving wealth to young children and young adults is complex.
- Having assets offshore is complex.
- Having liquidity issues in your estate is complex.
- Managing costs, kids and a messy deceased estate at the same time is complex.
Using a Will template that is given to you for “free” does not solve these issues; getting good, accurate, boring advice does.
A fee for drafting your Will by a professional, who considers your complete picture and assists with your estate planning, will be miniscule in the greater scheme of things. Rather get it done right. The cost of solving problems is always more than the cost of preventing them – guaranteed.
And please, do not believe everything you hear and see on social media!
*Articles to follow on these topics
In Episode 2, we discuss the Living Will.