Why a valid and updated will is of utmost importance

*This content is brought to you by Brenthurst Wealth.By Malissa Conlin*.Statistics released by the Master of the High Court of South Africa show the shocking reality that less than 15% of South Africans have a will when they die; whether these wills are valid or not is questionable. What is evident from this statistic is that most South Africans either do not believe that having a valid will in place is a fundamental priority or the sense of urgency in having a will is lacking. Surely, by now we should all know that there are two things certain in life – death and taxes. .Why would South Africans not wish to execute their right to "freedom of testation", where they are free to decide, within limits, exactly where and to whom their assets are to be distributed? By having a valid will in place, you are able to plan your estate according to your own wishes and needs and ensure that the process of distribution of your assets to the beneficiaries is a quick and painless one. Whereas should you die intestate, your family then loses control of your estate because they have no say in how your estate is settled. The process is then left up to the courts and attorneys appointed to wind up the intestate estate..What happens if I die without a Will?.If you fail to have a Will in place or one that is invalid, your estate will be administered and distributed in terms of the laws of intestate succession. Whilst the provisions of the Act are generally fair, ensuring that your assets are transferred to your spouse and children, some problems may arise: – .Your assets may be distributed to someone you did not intend on inheriting from your estate. It may take some time for an executor to be appointed and potentially be someone you would not have chosen.Extra and unnecessary costs may incur. Any inheritance due to a minor will be liquidated and deposited into the Guardian's Fund; andConflicts may arise between your family members as no clear instructions have been made regarding the division of your estate..Read also: Everything you need to know about Powers of Attorney.What renders a will valid? .For your Will to be legally valid, it has to comply with the Wills Act 7 of 1953. This means: .It must be in writingThe Testator/Testatrix must be older than 16 and capable of appreciating what they are signing.The Testator/Testatrix and their witnesses must sign the Will in the presence of each other, and the Testator/Testatrix must sign on every page (it is ideal that witnesses do the same to strengthen validity).The witnesses must be older than 14 and not receive any benefit in the Will..Whilst you may draft the Will yourself, it would be a good idea to have a professional review it to make sure it contains all the necessary elements to protect your estate and beneficiaries and make it legally binding..Pitfalls faced with Wills and Estate Administration.Despite the shocking statistics, there are also pitfalls (which we have experienced in practice) that have a bearing on the importance of having a valid and up to date will. Some of these will and estate pitfalls are just a few we have come face to face with: – .Original signed wills should be left with the executor – It is important that the originals are kept with the appointed executor in a safe for its safekeeping. The Master of the High Court's require original signed wills and if no originals are furnished, it is likely the Master will regard the estate as intestate. If your will is not kept with the executor, be sure to inform your executor and your loved one's as to its whereabouts. Wills that are not clear and concise in its intentions – it is important that you are clear and concise in your estate wishes and that this is clearly stipulated in your wills, to ensure that both the executor and those inheriting have a clear understanding of your intended wishes.Outdated wills that did not consider new family dynamics – remember to update your Will when circumstances change. A birth, a death, a marriage, a divorce, a new house or an investment portfolio – these all need to be included in your Will to be kept current.Bequeathing the entire estate without considering matters of estate liquidity – Although not part of your written Will, a precaution that is worth taking is to provide for your loved ones with respect to immediate expenses and any expenses that they may need to be settled in the event of your demise like funeral, household expenses and medical bills. This can be achieved through forward planning and policies to cover these costs. Failing to appoint a Guardian for minors – A guardian should be named in your will and will be the person charged with looking after your child/ren until they reach the age of majority (18 years of age). Without a Will in place, your family might have no say over who is appointed guardian.Considerations for minors that inherit – it is worth considering whether to set up a trust that will administer your affairs until minors reach the age of 18. This will prevent assets which they may inherit from being liquidated and placed in the Guardians Fund, which is administered by each Master of the High Court and is only released to them when they turn 18. The trust will give you greater control as to how your minor heirs will benefit from their inheritance. When creating a testamentary trust, you must ensure that all provisions related to the appointment of the trustees and their powers are clearly defined, as your will ultimately become the trust deed. Family can become foe – sadly, one thing we have learnt is that strong family bonds can be broken when death arises and money is at play. We should be grateful that our loved ones made an effort to leave a legacy behind and considering us, rather than act with a sense of entitlement on the wealth our loved ones created. Undefined family relationships – we often note that issues arise in estates where stepchildren or parents are involved. It's important that these relationships are defined especially for the executor, as these can be sensitive and difficult avenues to navigate. It is also necessary in order to avoid any possible family disputes. Divorce – it is important that once divorce takes place that your will is amended. In terms of Section 2B of the Wills Act, in the event of a divorce and where you have died within three months of the divorce, it will be given effect that your former spouse had died prior to the dissolution of the marriage. However, if you pass away and more than 3 months have passed since the dissolution of the marriage and you have not amended your will, your former spouse if they remain in the will, are considered to be the intended beneficiary of your estate. Often wills are not amended, and an ex-spouse inherits from an estate unintentionally. .Read also: Beware of financial advice on social media.Why using a qualified professional make sense.Given how complex these issues can be, it's easy to see the sense in working with a qualified professional with the required experience and knowledge to ensure your Will is legal and valid..They can also identify issues that may arise and help you avoid or mitigate them without going against your wishes expressed in your Will. Also, by nominating a qualified professional you can negotiate a reduced executors fee, which could be as high as 3,5% excluding VAT of your estate..What exactly does the executor do? .It is important to note that the winding up of a deceased estate, is no easy task, no matter how simple or complex the estate may be. A great deal of time is dedicated by the executor in trying to effectively wind up the estate as quickly and smoothly as possible and therefore their fees are well justified. .An executor is responsible for the effective winding up of deceased estates, and their role includes, but is not limited to the following: –.Meeting with family, reading of the will, establishing and verifying the identity of beneficiaries – obtaining relevant documents necessary for reporting to the Master and for estate management and distribution.Responsibility of carrying out the directives in terms of the deceased's last will and testament.Preparing and lodging all documentation to report the estate to the Master of the High Court and obtain Letters of Executorship. Placing advertisements in the local newspapers and Government Gazette in accordance with the Administration of Deceased Estates Act 66 of 1965, as amended.Opening the estate last bank account once letters of executorship is obtained.Closing of banking accounts and assessing estate liquidity. The executor may need to undergo selling assets in the event that there is not enough liquidity.Dealing with SARS, registering the estate.Paying creditors.Executor will also be required to pay out any special bequests to legacies and to pay any debts and obligations as an when they become due.Handling of potential property transfers.Drawing up of the Liquidation and Distribution account – which details all assets and liabilities and how the estate has been divided and distributed – this is then lodged with the Master and submitted to SARS, where it is assessed and thereafter lies open for inspection. Second advertisement placed in the local newspaper and Government Gazette – notifying the public that the account is lying open for inspection.Calculate and pay relevant estate tax and ensure correct documentation is filed with SARS and the Master.Attending to any of the Master's queries during the finalisation stages, and requesting for permission to distribute. Paying the Master's Fees. Finalisation and distribution of the estate. Closing of estate..Despite that a client may believe that a will and their estate may be a simple one, the executor is still subject to the same processes, no matter how simple or complex. A "simple" estate roughly takes between 16 months – 2 years to finalise. This depends on several variables. This is why it becomes increasingly important to involve a qualified professional when it comes to the handling of estate administration. .Read also: Don't believe these 6 common retirement myths.* Malissa Conlin is the General Manager of Brenthurst Wealth, a qualified attorney and Fiduciary Practitioner (registered member of the Fiduciary Institute of South Africa®). malissa@brenthurstwealth.co.za

Why a valid and updated will is of utmost importance

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