By: Lesley Coetzee
A last will and testament is the cornerstone of estate planning, taking care of loved ones left behind and making legacies last from one generation to the next.
Even so, a will is often the most neglected part of financial advice, while in reality, it is a critical piece of the personal finance puzzle. Thankfully, we are making strides at improving this picture through continuous consumer education and working with thousands of financial advisors across the country, who support our mission of making the loss of loved ones easier and informing South Africans about the importance of having valid wills in place.
Why do so few South Africans have wills?
On an individual basis, surveys continue to show that procrastination or perceived lack of time is the main reason why many South Africans don’t get around to drafting their wills.
Who can ‘afford’ to die?
Very few of us understand the intricacies of winding up a deceased estate, the complexities of the admin involved, and least of all the unexpected costs associated with dying.
Considerations when drafting a will
The main considerations to bear in mind when it comes to wills and estate administration include:
- How are you married? (Marriage regime plays an important role in how an estate is distributed.)
- Do you have minor children? (In South Africa, children under 18 can’t inherit directly, so you need to consider creating a testamentary trust in the will, and nominating trustees, and preferred guardians to look after minors.)
- The costs associated with dying (executors fees, Master’s fees, trust fees, other legal costs).
What assets and liabilities are there?
Do you own property? If so, how many? (Deceased estate property transfers are more complicated than regular transfers and can cause significant delays in the estate administration process.)
Have you chosen an executor? (The family lawyer, a family member who is a lawyer, a trusted uncle, or a favourite aunt… not always the best choices; the role of executorship requires a specialised professional skill set, including financial, tax, legal, communication, negotiation, and other expertise.)
Do you own a firearm? (This is one of the top reasons for delays in winding up deceased estates.)
Are there any offshore assets or business interests? If so, a worldwide or offshore will is required.
Doing fiduciary differently
I’ve personally taken calls from widows who have just lost their husbands and don’t know where to start or what to do next. In these circumstances, I can confidently assure them that they are in good hands and that a dedicated estate consultant will meet with them in person to explain the process and what to expect.
If you took advantage of Wills Month and got your will in place, that’s fantastic. If you have not yet done so – I encourage you to get it sorted, it only requires an hour of your time. When that dreaded call comes through of a loved one passing, the family should know that the deceased’s wishes have been clearly outlined, and their legacy protected by way of a well-drafted last will and testament.
* Coetzee is the executive manager of distribution at Capital Legacy.
PERSONAL FINANCE