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By Malissa Anthony* 

There’s no secret that a will is one of the most neglected and least thought of legal document. This is evident from the 70% of South Africa’s working population that do not have a valid will in place.

Malissa Anthony

Simply, if you have something to leave behind and someone to receive it, a valid will is needed, enabling you to secure your financial legacy without leaving it to the laws of Intestate Succession to determine who will inherit your assets.

Two things in life are certain – DEATH and TAXES, it is discerning how we neglect to plan for inevitable occurrences, particularly where consequences can be detrimental to our dependant’s financial future.

By having a will in place, you can 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.

There are several legal formalities prescribed in terms of the Wills Act which need to be met for a will to be rendered valid, namely: –

  1. Be in writing.
  2. The testator must be over the age of 16 and capable of appreciating the nature of the effect of the act.
  3. The Testator and witnesses must sign the will in the presence of each other and the Testator must sign on every page; and
  4. The witnesses must be over the age of 14 and not receive any benefit in the will.

Together with several factors to consider: –

  1. Adhering to the strict legal requirements when drafting a will.
  2. Guardian nominations – If your minor child does not have a natural guardian, it’s important to nominate someone to act as a guardian to them. If you have no will in place, your child may end up with an unintended guardian.
  3. Minor’s inheritance – assets left to a minor will require a guardian to sign documents on their behalf, additionally, minors may not receive their benefit until reaching age of majority. Consider creating a testamentary trust (if there is no inter vivos trust) in order to administer assets in the child’s best interests, avoid assets being liquidated, and from inheritances being placed in the Guardians Fund and only released to them on age of majority.
  4. Effective estate planning will help reduce estate duty and ensure sufficient liquidity to cover estate and administration costs and ensure distribution of specific bequests.
  5. Changes to personal circumstances – marriage/divorce, birth, or death a loved one. Consider the impact of a divorce, in terms of Section 2B of the Wills Act, if an ex-spouse has 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 more than 3 months have passed since the dissolution of the marriage and the will is not amended, the former spouse will remain in the will, and considered the intended beneficiary of the estate.
  6. The location of the will and entrusting someone with the location or person to notify on death.
  7. Negotiating reduced executors’ fees. The prescribed maximum executors fee of 3.5% excluding VAT, including an additional executor’s remuneration of 6% excluding VAT earned assets in the deceased estate that generate income after your death until such time as the estate is wound up.
  8. If a separate will for offshore assets is required.

When dealing with offshore assets and determining whether a separate will for those offshore assets is necessary or whether one can deal with those offshore assets one worldwide will, various factors need to be considered, like the type of offshore asset involved and succession laws of that jurisdiction. That is why consultations with qualified professionals should be had, to determine this.

Do not be mistaken in believing that by having a separate will, the requirement to report these assets for estate duty purposes in the country for which you are a tax resident can be evaded. In South Africa, tax residents worldwide assets are liable for income tax earned on worldwide income, estate duty and capital gains tax.

South Africans may, however, be exposed to laws of double taxation in the country of residency and South Africa, having entered into an estate duty agreement with the following countries only: US, UK, Zimbabwe, Botswana, Lesotho, and Swaziland.

Qualified professionals will have experience and knowledge in this field to ensure the will adheres to the strict requirements of drafting a valid will, and keep up to date with estate planning information, changes to tax rules and trends on a global scale that may be relevant to your estate.

They are also able identify issues that may arise and advise you in avoiding such issues or mitigate them as far as possible, whilst also ensuring that the will complies with your express wishes and that your assets of your estate are allocated as you have intended.

By also nominating a qualified professional you can negotiate a reduction in executors fees, as opposed to imposing the maximum executors fee which is prescribed by the Master of the High Court, being a fee of 3.5% excluding VAT.

The winding up of deceased estates is no easy task, no matter the level of complexity. A great deal of time is dedicated in effectively winding up estates as quickly and smoothly as possible and therefore executors’ fees are well justified. A simple estate can take roughly 16 months to two years to finalise.

Read more about estate planning.