Your last Will and Testament: Everything that you need to know
A will is the only place to nominate a guardian to care for your children. If you don’t need a will for any other reason, but you have minor children for whom you want to name guardians, you should draw up a will.
If you die without a will (intestate), a court will decide who should care for your children and how your assets are divided.
The division of an estate after death comes with many emotions. Here are some important points to consider.
The following questions should be considered when drafting a will?
- Who is your executor and/or the administrator of your estate?
- Who are your heirs?
- Will there be sufficient liquidity in your estate to pay your debt and at the same time provide for the financial security of your family?
- Is your home loan/ bond covered by insurance?
- What re the capital gains tax implications?
- Is your will correctly structured to cover your offshore assets?
- Can estate duty be minimised?
Should you review your will regularly?
Yes! Life events such as marriage, property purchases and sales, having children and the death of loved ones all lead to change in personal circumstances which may require the updating of your will.
What is a will trust?
A will trust, can be created in terms of your will and does not require any further formalities. Such a trust comes into operation upon your death and may have a number of advantages, for example:
- You can ensure that minor beneficiaries receive their inheritance at an age when you feel they will be sufficiently responsible to manage it.
- Your surviving spouse and children can be protected by ensuring that they receive income or capital in pre-determined amounts.
How is a deceased estate wound up?
The administrator of Estate Act prescribes the formal procedure which must be followed insofar as the winding up of a deceased estate is concerned.
The executor who is nominated in the will must make application to the Master of the High Court for letters of Executorship to be granted in his favour. No executor has any power to act on behalf of an estate before he has been issued with this document.
What are the roles of an Executor?
- Handling each asset forming part of the estate in an appropriate manner.
- Settling all liabilities.
- Obtaining all necessary tax clearances – Estate duty, income tax, capital gains tax.
- Complying with the provisions of the Administration of Estate Act including the placing of statutory advertisements and formal accounting to the Master.
- Communication with the heirs and all interested parties.
- Collection and investment of all cash forming part of the estate.
- Payment and transfer of inheritance to the heirs.
What happens if I die without a will?
- If you die without leaving a will or if you leave an invalid will, your heirs will inherit from you in terms of the Intestate Succession Act, Act 81 of 1987(This Act applies to all South Africans).
- Interstate succession are the “rules” that are applied in terms of the above Act, to determine who will inherit your assets if you leave no will. This can mean that certain people may inherit from you according only to their relation to you rather than their relationship with you.
- Most people want to distribute their property differently than the state would distribute it. For example, many people want to leave gifts to friends, neighbours, girlfriends, boyfriends, schools or charitable organisations – and intestate success does not allow for any of that. If you want other people or organisations to inherit some of your property, or if you want to decide the proportions of your gifts, a will can make sure your wishes are followed.
- A will is the only place to nominate a guardian to care for your children. If you don’t need a will for any other reason, but you have minor children for whom you want to name guardians, you should make a will. If you die without a will, a court will decide who should care for your kids, and family members will have to apply for guardianship.
- As divorce becomes more complex and blended families more common, dividing assets has become even more complicated. A will that clearly lays out your wishes may reduce conflict and speculation over what you “would have” wanted. For example, if you’re in a second marriage and have children from your first marriage, you may want to use a will to clearly distribute your property between your second spouse and your children. Without a will or other plan, your property will be divided between them according to state law – this could produce an uncomfortable result as well as speculation about what you would have wanted. Making a plan can give you peace of mind and prevent your family from fighting over your possessions.
The drawing up of a will can take half an hour of your time and save your loved ones many months of administration, stress and strain. It’s something you just have to do.
http://www.valleydeals.co.za/last-will-testament-everything-need-know/- Blog written by Chalford Wealth Aug 2016