Your Will

The eventual fate of everything gathered during your life is decided by your will. A will is a written, legal document in which you say how your assets are to be disposed of after your death.
It may be the most important document you will ever sign!
Every person should have a will. Without a will, your heirs could face tax, legal and administrative problems and lose money. Even if all your blood relatives are dead, a will is needed otherwise your property will eventually be forfeited.

I often receive requests asking me to provide a standard will. This is not a matter that can be resolved so easily. Why? It's impossible to provide a one-size-fits-all will.
A will is a personal document in all senses of the word. Your will must be tailor-made to fit your individual and financial circumstances. We need therefore to sit together and plan it.

Failing to make a will.

Dying intestate, can present serious financial, tax, legal and emotional complications for the deceased's family. No one knows who must oversee the process of distributing your assets, nor to whom what must go.
Your family home may have to be sold to satisfy how a court deems your assets should be split.
Or it may have to be sold to pay estate duty taxes!

Many neglect this fundamental necessity because they don't want to think about the inevitability of death; this selfishly ignores the interests of the living who will (or should) inherit.
Others can't be bothered because they don't think they will leave much of value; yet many have "hidden" assets such as pension rights.
Everyone should have a will, even if it leaves all to a spouse or child.
In case of a divorce, a will can prevent the ex-spouse squandering, or re-marrying and the new spouse laying claim to the inheritance.

Failing to realise the limitations of a will.

Contrary to popular belief, you cannot always use a will to dispose of all your property.
For example, your spouse or even an ex-spouse may have rights to part of it, depending on how you are married, the terms of a divorce, and so on.
Leaving everything to your spouse to save taxes. What you leave your married partner is fully exempt from estate duty, (but it will be taxed fully on his or her death), if the estate is valued at more than the exemption limit - currently R1,5-million.
It makes more sense to bequeath your first 1,5 million, which will enjoy the basic exemption, to others, such as children, preferably through a trust, and the balance to your spouse.
That way the family enjoys a double exemption.

Not keeping your will up to date.

Estate planning doesn't end the moment you sign your will. Your financial situation will almost certainly change and tax laws may change.
Births, marriages or deaths may alter the dispositions you wish to make.
Should you marry or get divorced, or have a child, that will certainly require some radical changes.
So review your will at least once every three years, and whenever there's a substantial change in your finances or family situation.

Beneficiaries.

Problems can arise from the failure to coordinate beneficiary choices with the rest of your estate plan. Usually individuals are designated as beneficiaries; but in some cases it is better to designate trusts as beneficiaries.
Beneficiary designations make no provision for estate tax planning, and will not protect the beneficiary from creditors or unscrupulous people.
This area is too complex to discuss in this article, but keep in mind that you should always ask your advisors about coordinating beneficiary designations with the rest of the plan.
In any case, you should almost never designate your estate as a beneficiary.

Bequests.

These instructions decide how your estate is divided up. Leave clear instructions about who inherits what.
If you intend to bequeath a valuable asset such as fixed property, state it as "residential fixed property" and not as a specific property. You may well sell the original property and not update your will.
A bequest is usually made unconditionally and vests immediately upon your death in the beneficiary. However a bequest can be made subject to certain conditions or it can be made subject to the beneficiary fulfilling certain obligations such as the payment of a sum of money, often referred to as a bequest price.
If you have such conditions, call me and get a professional opinion on how best to word your will.

If possible, specify the items. E.g. Don't say "my jewellery to my daughters." Rather specify what and to whom. If this is difficult, it may be wise to instruct the executor that they are sold and the proceeds split up.
If you do not state who gets what, the executor may well sell the assets and split the proceeds as an answer to these problems anyway.

You may leave the majority asset (your business) to one heir and provide through insurance for capital to other heirs. This solves the equality problem on disposal of your assets among more than one heir.

Minor Children.

Generally, the child's surviving parent is automatically the guardian (there are some exceptions to this), but you should always nominate a guardian and even a substitute guardian in your will. This nomination ensures that your chosen guardian looks after your loved ones when you're no longer around. They administer the property of a minor. Family members are usually nominated. They must be responsible people whose lifestyle is as close as possible to yours.
It is a good idea to appoint a Financial Guardian who controls the finances and pays a Custodian Guardian, who cares for your child. This can prevent squandering of the capital to be used for your child's living and education costs.

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An estate can take months to finalise. Make sure that immediate cash is available.

MAKE SURE THAT YOUR FAMILY WILL HAVE FINANCES TO LIVE ON, WHILE THE ESTATE IS WOUND UP.

This can take many months. Your bank accounts are frozen and no one can get cash from them. Overdraft facilities can be withdrawn. Access bonds are frozen. Your credit cards are frozen. There's no cash available! Borrowing from relatives is embarrassing.
Your spouse may be forced to sell assets for cash FAR below their value.

LIFE INSURANCE IS THE ONLY REAL METHOD OF DEALING WITH THIS CASH SHORTAGE. IT PAYS A SUBSTANTIAL TAX-FREE LUMP SUM, VERY QUICKLY

Provision for the elderly. Some elderly folk cannot effectively deal with finances. Rather form a trust to protect them.

If you leave a mortgaged property as a legacy it is deemed to be bond free. The bond will be settled from your estate if not expressed otherwise. Consider bond protection to ensure that a bequeathed property does not become a liability for your heirs.
I can offer you extremely competitive rates on bond protection. Remember, you are not compelled to take insurance with your bank.

These are but some of the concerns you could have in drawing up a will.
Please call me if you want advice.

Interested? Then please call or email me NOW!! Cell: 083 377 8893

Don't leave your concern here. Call me for advice - no obligation!

Especially if you want to consider or revise Your Will.

pyburn@peterpyburn.co.za