Ever wondered: What happens to my Assets after Death?
Shapiro said that everyone dies with a will, you either make your own will, or the law makes it for you under the rules of intestate succession ……
Do you really understand the importance of having a valid will and what the consequences are if you do not have a valid will? We are trying to give an overview, by means of answering the most commonly asked questions.
Why a will … ?
When a person dies, his possessions must be divided amongst other people or bequeathed to a person. The responsible way to dispose of possessions at death, is by means of having a valid will. A will forms an integral part of estate planning. It is important to have a will, so that a person can exercise your free will and right to determine how to distribute the wealth that you have built up in your estate, to your heirs and/or beneficiaries after your death.
What is a will?
I see a will as a last letter of wishes, however a will is a legal document, recording the free and independent wishes of the testator or testatrix to distribute the assets in his estate at his death. A will can either be typed or handwritten.
There is a vast number of technical factors to take into consideration when drawing up a will, with respect to the legal capacity of all parties, the rules of signing of a will, appointing guardians, the execution of the will and a lot more.
It is thus important to make sure that your last wishes can be honored and executed by means of a proper and valid will.
Who can draw up a will?
A person of 16 and older in his right mind, ie mentally able to understand the consequences of his actions,may draw up a will to distribute his or her assets at death according to his or her own wishes. This person is called a testator in the case of a male and a female is called a testatrix.
If it can be proven that this person has acted under duress or improper influence, the will can be declared nil and void.
What parties must sign on a will?
The testator must sign the will on each page and at the end. The will must be signed in the presence of at least two competent witnesses older than 14.
What assets are included in the will?
An estate is the sum of the total of all assets of a person acquired over a lifetime, invested in different asset classes, including property. An estate comprises of the net value of an individual, whether alive or dead. The net value means that there can be assets, accumulated over the lifetime of the individual, as well as liabilities in the estate. These assets then need to be distributed at the individual’s death, after settling debts, claims and costs.
All distributable assets that belong to a person can be bequeathed in the will. It is important to understand that the marital regime plays an important role on the financial planning of bequests. A person married in community of property can only bequeath 50% of the assets in the estate, with certain property like eg inheritances and others, which might be excluded.
In the event of marriage with ante-nuptial contract with accrual, there may be an accrual claim against the estate.
The Matrimonial Property Act, the Marriage Act, the Customary Marriage act and the Civil Union Act play a role on contractual capacity and also on the right to bequeath or alienate assets.
What assets are not normally included in a will?
Retirement funds are governed under the rules of the Pension Fund Act and do not form part of the distributable estate. The trustees of the retirement fund have the authority to make decisions on the distribution of the retirement fund to the dependents.
It is important to understand that minor children and the surviving spouse might have a maintenance claim against the estate, which may have an effect on the distribution of assets bequeathed by the testator.
What other wishes can I put in my will?
A guardian for minor children needs to be appointed in one’s will.
A person has the right to request cremation or burial and having a tombstone. It is however important to firstly understand that this is a wish expressed in the will that may be honored, but not a stipulation which can be enforced. Secondly it is important to communicate this wish with your next of kin. If the next of kin were unaware of your wishes in this regard and the content of the will is only read after a person has already been buried or cremated, it will be too late.
A person who wishes to be and organ donor, must register with the Organ Donor Foundation and mention it in your will. It is also important because of the above reason, that this needs to be communicated with the family. The wear of a medical pendant is also advisable.
Remember, wishes expressed in life cannot be executed in one’s will.
When must I revise or update my will?
It is important to revise your will when:
There may be reasons other than the above as to why one would prefer to change your will.
Remember, it is in any case advisable to revise your will once a year.
What is the role of the executor?
When drawing up a will, one has the right to choose your executor.
The executor has the role to administer the estate, pay all the debts, estate duty and will also distribute the assets in the estate according to the will of the deceased. Executor’s fees are normally calculated at 3,5% (3,99% VAT incl) of the gross estate handled by the executor. The executor can also charge 6% on income accrued and collected after death. If the deceased was married in community of property, the executor’s fee is charged on the total joint estate.
What are the implications if a person dies without a will?
The responsible way to dispose of possessions at death is by means of having a valid will. A person who dies without a valid will, dies intestate, which means that his possessions will be transferred according to the fixed rules of the Intestate Succession Act. It has the impractical consequence that an executor needs to be appointed, which can be a time-consuming and expensive process.
The testator thus loses his free will of the distribution of his assets at his death to heirs and beneficiaries of choice. I always wonder who in his right mind would prefer to work for a lifetime to build up an estate, to then not exercise the right of choice on how to distribute your assets after death and consequently have the wrong people inherit.
Dying without a will can further lead to financial losses, administrative, tax and other legal problems in the estate.
Who can assist you who to draw up a valid will?
A person can have a will drawn up by an attorney, through the bank or through a financial intermediary. It is critically important, that whoever assists one in the drawing up of the will, must also take the financial implications of enough cash to execute the estate into consideration.
In closing ….
The above summary serves the purpose of making one aware of the importance of having a valid will and the consequences of not having a will. It is providing valuable information, but can only scratch the surface of a complicated topic with a vast array of legal and technical detail.
It is important to consult with the experts to assist you to get the required end result of your hard work and well deserved earnings. Do not even try to attempt a do it yourself approach with all the potential pitfalls, resulting in a potential completely different result than what your intention was. Allow yourself the privilege to die in dignity one day.
I trust that you have found this insightful and that it will serve to prompt you to take action and plan properly to protect your hard earned assets, by making sure that you have a valid will.
Like I said before – never be penny wise and pound foolish …… do not delay
- contact your experts today. Tomorrow may be too late!
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Author: Erna Rossouw
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