Is my will part of a Holistic Estate Plan?
This is the kind of question all readers should ask regularly to ensure that their estate plans fit their specific needs, circumstances and are indeed feasible.
The biggest misconception we have encountered in estate planning, more specifically the drafting of wills, is that wills are only intended for the wealthy, and those who can afford the expertise of a legal advisor. This cannot be further from the truth.
One of the most important, if not the most important, document you will ever sign, is your Last Will and Testament. Regrettably this is an area that most people neglect terribly, leaving surviving spouses and/or children with unnecessary problems and hardship.
This is not merely about drafting a once off document, but should be updated regularly depending on your changing circumstances, because ultimately your will should provide you with peace of mind.
It is important to have a will for the following reasons:
- Wrong persons can inherit from you without a will.
- Intestate succession prevented.
- Lagging in administration of estate prevented.
- Last wishes properly documented.
The principle of freedom of testation is recognised in South African Law, meaning that a testator can leave his assets to whoever he pleases and extends even to the disinheriting of anyone, including spouses and children however in a new constitutional dispensation blatant unfair discrimination can be challenged.
Special care needs to be taken when drafting a will, since the Wills Act prescribes certain requirements for a valid will.
Firstly, a will must be in writing, and freely made with the intention of constituting a testamentary document.
Secondly, the will must be signed on each page by the testator and two competent witnesses in each other's presence. Any person who may benefit from your will, for instance an executor, trustee, guardian or beneficiary or the spouses of the aforementioned, may not witness your will. If for example your child is one of your heirs and he witnesses your will, he might be disqualified from inheriting from your estate.
People tend to be sensitive about the normal prescribed tariff of 3,5% for executor fees, but tend to forget about the capital gains tax and the 20% estate duty that might be payable on death as well as creating a safe haven for their heirs and therefore neglect to look more holistic to the planning of their estates.
You will be well advised to consult with a duly qualified person regarding your will, since after your demise nothing can be done about your last will and testament.
Soon there will be a Wills Week presented by the Law Society of SA during which all registered practicing attorneys will present a free service.
In our next article we will discuss the administration of deceased estates and attempt to clear up some of the most common misconceptions regarding this complex process.
(Compiled by Theresa Tannous and Delia du Toit)
