Article courtesy of Law Dot News | Wills | Estate Planning

Do You Really Need 6 Types of Wills?

“One ring to rule them all.” (JRR Tolkien in The Lord of the Rings)

When it comes to making sure that you get to choose who inherits what from your estate, there really is only “one will to rule them all,” because our law recognises only one type of testamentary will: your “personal will” or “Last Will and Testament”.

But what about all the advice to put in place a whole range of other “wills” as well? Do we really need to have an “offshore will”, a “digital will”, a “business will”, an “ethical will” or a “living will”?

While calling them all “wills” is confusing (and a real problem if it misleads anyone into neglecting their foundational will as recognised by our Wills Act), these other types of “will” are all useful concepts.

We’ll have a look at them all in turn, but let’s start with the one and only…

One will to rule them all

Often referred to as your “personal will” or “Last Will and Testament”, this is quite possibly the most important document you will ever sign. Whether it’s your individual will or a will made jointly with your spouse or partner, it’s the only way to ensure that your last wishes are honoured, that your assets are distributed to your chosen heirs in accordance with your directions, and that the executor of your deceased estate is someone you can trust to act with professionalism, integrity and as much speed as possible.

Because your personal will lies at the heart of your estate planning, having a professional draw it for you is a real no-brainer. Not only must it be clear, consistent, and concise enough to avoid any possibility of doubt or dispute among your heirs, but it must comply with all the formalities required by our Wills Act.

It must be a physical document, in writing (written, typed or printed) and signed by you in the presence of two competent witnesses. While that requirement will presumably fall away as our laws evolve to allow us to draw electronic wills, video wills and the like, for now a physical, ink-signed document remains essential. If you leave only a non-compliant will, your heirs will have to ask a court to have it accepted as valid – a recipe for uncertainty, delay, cost, and dispute at the worst possible time for your loved ones.

Where do the “joint will”, “mutual will” and “mirror will” concepts fit in? Often useful for couples wanting to combine or link their personal wills with reciprocal provisions, choosing between these rests on a complex mix of personal circumstances and legal, estate and tax planning angles. Please do ask us for advice specific to your circumstances.

Do you also need an offshore will?

If you have offshore assets, you may be advised to make one or more foreign wills in addition to your South African one. You need specialist advice here, to ensure not just the validity of both your South African and your foreign will(s), but also their compatibility with each other, and their overall tax and estate planning efficiency.

What about a “digital will”?

A modern concept that’s been gaining traction lately is the “digital will” idea. It’s essential to understand that this is in no way, shape or form a substitute for your personal will. Nor is it in any sense an invitation to make an electronic or online personal will.

Your “digital will” is not the place to leave digital assets to anyone: you must still do that in your personal will. But it is the place to list all those digital assets, plus all your other online profiles, and to tell your executor how to access them. It’s also your chance to tell everyone what you want them to do with your social media accounts.

Four suggestions:

1. To avoid confusion with your real (i.e., personal) will, don’t call it a “will”. Call it your digital wishes, or digital folder, or something similar.
2. Separate it from your personal will by incorporating it into a separate document. If you don’t yet have a “Notes” folder with all the information and documents your executor and heirs will need when winding up your estate, now’s a good time to start one.
3. Make sure your list is comprehensive, or your heirs may never find out about all those crypto assets you’ve painstakingly accumulated for them.
4. Don’t ever record passwords, PINs and other security credentials in an unsecured document. Consider using a reputable password manager with an emergency-access facility.

Do you need a business will?

If you have a business, think about what you want to happen to it if you get run over by the proverbial bus tomorrow. Legally you must bequeath your business as an asset (as a sole proprietorship perhaps, or as shares in a company) in your personal will. Your business will is where you say what you want your heirs, and perhaps also business partners and managers, to actually do with it.

Without guidance, your loved ones could have no idea how they should handle things practically. If confusion and dispute set in when you die, they could tear your whole legacy apart.

Again, share your guidance in a “Notes” document supplementary to your personal will, and rather don’t call it a “business will”. What you actually need is a succession plan, so call it that, and structure it carefully.

The “ethical will” concept

More commonly encountered overseas, the “ethical will” has no legal effect and does not relate to your assets but rather to the personal legacy you want to pass on to future generations.

You might leave a “legacy letter” sharing with all your descendants your personal values, beliefs and life lessons, recording your family’s history and heritage, and leaving personal messages for individual family members. It’s a great way of supporting your heirs in living their lives to the fullest while preserving and enjoying the material wealth they inherit from you.

Your “living will” or “advance medical directive”

Your “living will” or “advance medical directive” has nothing to do with leaving assets to heirs, or appointing executors or guardians or the trustees of family trusts.

It’s your expression of your wishes, and your directions to your family and to your medical carers, as to what you do and don’t consent to when you are no longer able to communicate for yourself.

While the concept’s legal status is still unclear, it has a large measure of professional support and will help, guide, and comfort your loved ones when they need it most, so don’t leave this until it’s too late!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

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Article courtesy of Law Dot News |Estate Planning | Wills | Property

Estate Planning: The Ambush Tax Lurking in the Wings

“I can’t afford to die; I’d lose too much money.” (George Burns, comedian)

At the heart of any estate plan lies your will. Pair it with a file containing all the information and documents that your executor and heirs will need to wind up your estate, and you’ve laid a solid foundation for protecting your loved ones when you’re no longer around to do so.

Hopefully, most of us have already crossed those two essentials off our “to do” list. But there’s a third step which doesn’t always receive the attention it requires: planning for the costs your estate will have to pay, including a number of taxes.

As with all things to do with SARS and tax, there are many detailed requirements and grey areas involved, so what follows is a general guide only. It’s no substitute for specific professional advice.

The big costs you should plan for

• Costs: Central to your estate planning will be understanding just how much each of your heirs will actually receive from your estate after costs, the most significant of which are usually executor’s fees and government taxes.
• Taxes: There are two main taxes to consider: estate duty, and capital gains tax (CGT). In this article, we’ll focus on the CGT aspect for the simple reason that it’s often forgotten about, and even more often misunderstood.

CGT: The ambush tax lurking in the wings

CGT is one of those low-profile taxes that lurks around unobtrusively in the wings, being ignored and forgotten about until it suddenly pops out of the woodwork.

In this case, the “popping out of the woodwork” will happen when you’re no longer around to be ambushed by it. That’s because CGT is triggered by a taxpayer’s death, which is a “deemed disposal” tax event. In other words, your assets are deemed to have been sold at market value on the day you died. And that triggers a tax liability for your estate on the asset’s growth in value since you acquired it – the capital gain.

Before we get into the nitty-gritty of putting figures to that liability, let’s share a smidgen of good news.

The good news: 3 big exclusions, boosted by Budget 2026

Note firstly that no CGT at all is payable on “personal-use assets”, retirement fund benefits and most mainstream life policies.

Secondly, there’s “spousal rollover relief”: liability for CGT on assets left to your spouse is “rolled over” so that it’s payable not by your estate but later on by your spouse (on sale) or by their estate (on death). That, of course, can make a tremendous practical difference in ensuring that your spouse will be okay financially.

Thirdly, the annual exclusion in year of death, the primary residence exclusion and the small business disposal exclusion can all reduce CGT substantially. And as we note below, Budget 2026 has boosted them all. Good news indeed!

1. Annual exclusion in year of death: If you sell assets during your lifetime, your CGT liability is reduced by an annual exclusion of R50,000 (up from R40,000). In the year of your death, this exclusion is boosted to R440,000 (previously R300,000).
2. The primary residence exclusion: This is a big one for property owners in respect of their “primary residence” (the home you ordinarily live in), with the exclusion increased from R2,000,000 to R3,000,000.
3. The small business asset disposal exclusion: If you leave a small business with a market value of up to R15,000,000 (previously R10,000,000), your estate may qualify for a R2,700,000 exclusion (was R1,800,000) on the assets of the business, which are deemed to have been disposed of on your death. Many small businesses will also qualify for wear-and-tear on assets used in the business. Quantifying this requires professional assistance.

How to calculate CGT

Now for the actual CGT calculation, which will give you a rough idea of the final liability so you can plan for it:

1. Include all your assets (except those mentioned above as not being subject to CGT) at their current market value.
2. Deduct the base cost of each asset; that is what you bought the asset for plus allowable costs such as costs of acquisition and the cost of subsequent capital improvements.
3. Calculate the capital gain or loss by subtracting the base cost from the market value.
4. Deduct all exclusions from the capital gain to calculate the net gain.
5. Multiply the net gain by the 40% inclusion rate to give you the taxable capital gain.
6. Finally, apply your marginal tax rate to that taxable capital gain to give you the final CGT liability.

Putting together a comprehensive estate plan, anchored by your will, is essential to ensure that your loved ones are properly catered for after you’re gone. You know who to call if you need any help!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

© LawDotNews

Article courtesy of Law Dot News | Wills | Estate Planning

Why People Don’t Make Wills, And Why You Must

“All that lives must die, passing through nature to eternity.” (William Shakespeare, in Hamlet)

Master’s Office records suggest that less than a third of us leave behind a will when we die. That’s astonishing, given the fact that death is one of the few absolute certainties in our lives.

Why do so many of us put our families at risk like this?

“I don’t have a will because…”

It’s easy to find excuses for doing nothing about a will, with surveys conducted both locally and overseas suggesting that people’s failure to act is normally rooted in one or more of these common excuses:

We’ll help you structure a will and estate plan that honour your last wishes and provide proper protection for your loved ones. 

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

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Article courtesy of Law Dot News | Life Partners – Family Law | Property | Wills and Estate Planning

“An ounce of prevention is worth a pound of bandages and adhesive tape.” (Groucho Marx)

It’s a perennial topic of dispute in our courts. A couple lives together, sharing the same roof and everything else in perfect happiness and harmony.

Until it all goes south. Then the gloves come off and, particularly if our erstwhile couple end up dragging each other through the courts, everyone takes a beating. Bloodied, battered and bandaged, they’re going to wish they’d implemented Groucho’s “ounce of prevention” in the first place.

We’ll explain how to keep things amicable. But before we do, let’s consider the case of the life partner who failed to persuade a court to give him a cut of his ex-partner’s house.

Trying to prove a “universal partnership”

Bearing in mind that our law recognises no such concept as “common law marriage” (a pervasive and dangerous myth that just won’t go away), many an ex-life partner has fallen back on trying to prove that the couple had formed a “universal partnership”. Depending on the type and form of the partnership they claim existed, that would give them a cut of the assets of their relationship. But it isn’t easy to prove.

The facts in a recent Limpopo High Court fight illustrate this point. A couple in a romantic relationship had lived in the woman’s house with her daughter. Each of them contributed equally towards household expenses. They decided to extend the house, and the man contributed R416k out of his pension payout for this purpose.

When their relationship broke down after five years, the man tried to convince the Court that a universal partnership had been formed between them, and he asked for a liquidator to be appointed to divide the partnership’s assets equally between the partners.

The Court’s thorough analysis of the law relating to universal partnerships (there are actually two types, both with fancy Latin names) will be of major interest to lawyers. But what really matters most to you on a practical level is that:

• The onus is on you to prove that a partnership existed, and its terms.
• You must prove that you agreed to pool your assets in order to make a profit.
• A universal partnership needn’t be agreed to in writing – it can be formed verbally, by consent, or by the conduct of the parties. That requires inferences to be drawn so it’s a recipe for misunderstanding and dispute. Without a written agreement it’s never easy to prove and our case law is littered with failed attempts.
• Perhaps the most pertinent factor of all is this comment by the Court (emphasis added): “The mere fact that parties cohabitate does not entitle them to a proportionate share of the other party’s estate.”

In the end, the applicant failed to prove that the relationship had been anything more than cohabitation, so he leaves with nothing (other than, of course, a large legal bill).

An ounce of prevention…

All that litigation and unhappiness could have been prevented had the parties, when they first decided to live together, entered into a cohabitation agreement.

Don’t make the same mistake, and be sure to draw up a document covering, at the very least, the following aspects of your relationship as they apply to you:

• When your relationship began or when the agreement takes effect.
• List who owns what both before and during cohabitation (furniture, vehicles, investments and so on).
• Who is responsible for which debts.
• Who owns (or rents) your house, who will pay the bond instalments if any, who will pay for what upkeep, who will pay for any major extensions or repairs, and so on.
• Who will pay what in ongoing contributions to shared living expenses.
• Will you use joint bank accounts and, if so, how will you manage them?
• Will you run your own businesses, a joint business, or no business at all? What will you each contribute, what will you each take out, how will you manage the business/es?
• Who will be responsible for the children’s financial support, schooling etc?
• If your relationship ends:
  • How will you terminate it?
  • Who will get which assets?
  • Who will be responsible for which debts?
  • How will you terminate any business relationship you have?
  • Will either of you be entitled to ongoing spousal maintenance?
  • What happens to your children, to their financial support, and to your parental duties and rights of contact?
  • Think of adding a dispute resolution clause to kick in if you can’t agree on anything.
• Anything else? Your circumstances are going to be unique to the two of you, so brainstorm for anything else (who gets the pets, for example) that you’d like to record or agree on at this stage.

Herein lies the rub

Setting out an agreement doesn’t mean you’re planning for failure! In fact, you’re increasing your chances of success. Break-ups are a fact of life, and even if you do grow old and wrinkly together, your cohabitation agreement will still come into its own when one of you dies.

On that note, don’t forget to make or update your will (“Last Will and Testament”) at the same time. Both documents are essential, and the two must be compatible with each other, so make a big note to review/update both together.

Bottom line: you and your life partner should have a cohabitation agreement as well as wills. We’ll help you put all that together.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

© LawDotNews

Article courtesy of Law Dot News | Second Will and Estate Planning

Do You Need a Second Will for Your Overseas Assets?

“Only put off until tomorrow what you are willing to die having left undone.” (Pablo Picasso)

If you own assets outside South Africa, you may have wondered: Is my local will enough? This is a question many South Africans are asking, and the answer will depend on your own unique situation. Let’s break it down.

Why your South African will may not be enough

A South African will can cover all your local and global assets and typically will do so unless otherwise specified. But practical and legal challenges can arise when dealing with foreign laws, tax regimes and regulations:

• Delays and costs: If your executor has to deal with assets in another country this can take considerable time and incur additional legal fees for authentication/translation of documents, applications to recognise appointments and so on.
• Legal conflicts: Many countries have “forced heirship” rules that will override the provisions of your will and require that specified portions of your estate must go to “protected” heirs. In France, for example, your children will inherit up to 75% of your estate. Worse, some legal systems may not recognise your local will as being valid at all.

The case for a foreign will

You might anyway benefit from a foreign will if:

1. You own immovable property abroad: Immovable property is generally subject to the laws of the country in which it is situated, making a foreign will advisable.
2. You have significant movable assets overseas: Movables such as investments, shares, bank accounts etc, although likely subject to South African legal principles, could still be easier to manage with a separate will.
3. You spend a lot of time in another country: Regular visits or dual residency could complicate estate administration and make a foreign will an advantage – even if it’s not strictly necessary.
4. You want to minimise your estate’s tax bill: A foreign will might be recommended to you as part of tax planning, which is essential to minimise the risks of double taxation, estate duties and other financial penalties on your foreign assets. This is because we have a residence-based taxation system so SARS will – with few exceptions – be looking at all your assets worldwide.

How a foreign will works

A foreign will is drafted according to the laws of the country where your assets are located, and should:

• Ensure compliance with that country’s laws and regulations.
• Work alongside your South African will to avoid duplication or conflict.
• Simplify the process for your loved ones when the time comes to administer your estate.

Key considerations

Legal advice is crucial as your South African and foreign wills must align. Contradictions might render one or both wills invalid or open to challenge. When drafting your will(s) be careful to:

• Ensure that your various wills clearly specify which of your assets each applies to.
• Avoid inadvertently revoking your other will/s – specify in each will that it does not replace your other wills, which are to remain valid concurrently.
• Not allow duplication or conflict to creep in over time – diarise regular reviews of all your wills on an integrated basis.

Remember that drafting and maintaining multiple wills may incur additional expenses – but it can also save your heirs lots of money and time. Separate wills should be structured to streamline and simplify the administration process in different jurisdictions.

Protecting your legacy at home and abroad

Ensuring that your wishes are honoured and that your loved ones are protected starts with the right legal advice. If you’re unsure whether you need a foreign will, let’s talk. A consultation can give you peace of mind – and save your loved ones time, money, and stress in the future.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

© LawDotNews

Article courtesy of Law Dot News |Wills and Estate Planning

In the Land of the Will, Clarity is King

“The golden rule for the interpretation of testaments is to ascertain the wishes of the testator from the language used. And when these wishes are ascertained, the court is bound to give effect to them, unless we are prevented by some rule or law from doing so.” (Quoted in the judgment below)

When drawing up your Will (“Last Will and Testament”), remember that “clarity is king”. Ambiguity is one of the cardinal sins of will-drawing because it exposes your loved ones to the risk of uncertainty, dispute, rancour, and quite possibly expensive litigation.

Worse, if in the end a court has to try and decipher what you actually intended, there is no guarantee that it will be able to correctly ascertain your true wishes.

A case of different interpretations and a bitter dispute

A recent SCA (Supreme Court of Appeal) case confirms once again the need to express your wishes clearly and unambiguously in your will –

• A bitter dispute between a widow on the one hand and her three step-children on the other had its roots in a deceased father’s ownership of two plots. On the one plot the father had built houses for his two daughters, with his son building flatlets for renting out on the same plot. He and his wife lived in their house on the other plot.
• The dispute centered on two different interpretations of a clause in the father’s will in which he had left both plots to his daughters, but subject to a right of habitatio in favour of his wife. That, said the executor of the deceased estate, gave the widow the right to live in, and to rent out, the buildings on both plots.
• The widow’s step-children on the other hand argued that it could not have been their father’s intention to give his wife such rights to the plot in question in light of all the “surrounding circumstances”. They made much of the fact that their parents’ ante-nuptial contract referred only to the other plot (the one with the marital home) in that context. They also pointed out that they had all agreed informally to each of the siblings being allocated a “portion” of the disputed plot.
• The siblings accordingly refused to pay out any rentals to the executor, and the dispute eventually found its way into the courts – first the High Court and then the SCA.
• In confirming the widow’s right to live in the buildings and to let/sub-let them out and receive rentals from both plots, the SCA confirmed that a court will establish the intention of the deceased from the language used “in its contextual setting”. In other words, “the will must be read in the light of the circumstances prevailing at the time of its execution.” Thus, in this case it was relevant that the father had not changed his will to reflect the informal allocation of “portions” of the disputed plot between his children, and that he had probably intended his wife to benefit from the receipt of rentals for her financial well-being and maintenance.
• But beyond that, there is no place for the introduction of “extrinsic evidence” or “surrounding circumstances” if the wording of the will is clear and unambiguous – as it was in this case.

Bottom line – it is critical that the wording of your will be drawn professionally to correctly, clearly, and concisely set out exactly what your wishes are.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Article courtesy of Law Dot News | Wills & Estate Planning | Family Law | Wills

What is a “Universal Partnership”?

“Marriage is the chief cause of divorce” (Groucho Marx)

This Valentine’s Day, think about the legal aspects of your romantic relationship. They’re a lot less exciting than the traditional declarations of love backed up by chocolates and flowers, but they’re just as important in ensuring a strong, committed life partnership in which both of you is clear as to how your respective financial and legal responsibilities are defined.

A recent High Court decision once again puts a spotlight on the fact that “life partner” couples are at ongoing legal and financial risk unless they sign both cohabitation agreements and updated wills.

The problem – there’s no such thing as a “common law marriage”

Our law does not recognise the concept of a “common law marriage”. Either you are formally married, or you miss out on many of the legal protections available to married couples. The result – if you split, or when (not if) one of you dies, the less financially strong life partner could well be prejudiced, perhaps even left destitute after many decades of life together.

The solution – a cohabitation agreement with updated wills

Luckily these two documents give both of you quick and effective protection –

1. A cohabitation agreement tailored to meet your particular circumstances and needs. It should at the minimum cover questions such as whose name assets and liabilities will be in, who will cover what expenses, how you will split your financial affairs if you part ways, your undertakings to each other regarding financial support and maintenance, parental rights and duties regarding children and so on.
2. A will (“Last Will and Testament”). You could make two separate wills or one joint one but either way make sure to comply with all formalities to ensure validity and set out your respective wishes clearly and unambiguously. A vital (and all-too-often overlooked) aspect here is to diarise regular reviews of your will/s in case they need updating to take account of ongoing life and financial changes.

Let’s turn now to a “second prize” alternative – proving a “universal partnership”.

What is a “universal partnership” and how do you prove it?

If for whatever reason you don’t have both a cohabitation agreement and wills in place, you may still have a “get out of jail free” card in the form of a universal partnership.

These extracts from the High Court judgment (formatting supplied) set out what you’ll need to prove –

• “A universal partnership is an agreement between individuals to share their property and their gains and losses. The partnership need not be formed for a commercial purpose.
• It regularly comes into existence, whether expressly or tacitly, between unmarried cohabitees, although cohabitation is not essential.
• The requirements for the existence of a universal partnership are the same as those for partnership in general.
• Where a tacit universal partnership is alleged, a court will confirm its existence if the conduct of the parties is such that it is more probable than not that such a partnership agreement had been reached between them.
• A partnership exists if “each of the parties brings something into the partnership or binds themselves to bring something into it, whether it be money, or labour, or skill”; if the agreement is struck for “the joint benefit of both parties”; and if the object of the partnership is material gain.
• The question is … whether, on evaluating those facts as a whole, the probable inference is that there was a universal partnership.”

A bitter family fight shows why it’s second prize

• In the case in question, life partners had for 26 years shared all their assets “akin to a marriage in community of property”. Importantly, they had shared the “benefits and burdens” of a number of property development ventures. They had, said the Court, each brought something into the partnership, her contribution being mostly financial, his (as an architect) mostly in “sweat equity”. Their partnership was not just a life partnership, it “was also plainly at least partly about material gain.”
• Their relationship was terminated by the death of the one partner, who died “intestate” (leaving no will in place) after developing dementia. The other partner had suggested they each execute wills leaving everything to each other and he had done so, but she had declined as she was unwilling to contemplate her mortality
• Her daughter as executor of her mother’s deceased estate refused to recognise any claim by the surviving life partner. Quarrels and evictions followed, with ultimately a hard-fought High Court battle.
• The Court found that the survivor had on the facts succeeded in proving the existence of a universal partnership. Critically, it held that the parties’ partnership “was also plainly at least partly about material gain” and that the surviving partner should anyway inherit half of the deceased’s estate in terms of a principle previously accepted by our courts that “partners in a permanent life partnership in which the partners have undertaken reciprocal duties of support are entitled to inherit as spouses would.”
• Accordingly, the survivor gets a full half of the deceased partner’s entire estate, whilst the daughter is removed as executor and ordered her to pay the legal costs.

The winner is…

The bottom line however is that the element of “material gain” which so clearly applied to the joint acquisition of assets in this particular life partnership will be absent (or at least extremely difficult to prove) in many other cohabitation agreements.

First prize must therefore always be to avoid the risks, delay, stress and cost of trying to prove the existence of a universal partnership and/or reciprocal duties of support by having in place both a comprehensive cohabitation agreement and a joint will or reciprocal wills.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Article courtesy of Law Dot News | Family Law – Wills & Estate Planning

Your Will Can’t Wait: The Tragic Case of a Mother Who Took Too Long

“We are such stuff / As dreams are made on, and our little life / Is rounded with a sleep.” (Shakespeare)

We aren’t comfortable thinking about our mortality, but death comes to all of us and it is our loved ones who will suffer if we don’t make plans to look after them whilst we still can.

First prize here will always be a full estate planning exercise, but at the very least put a will in place. There is no other way of ensuring that your loved ones’ interests are protected, that they inherit what you want them to inherit, and that your estate is wound up by an executor you trust to act with integrity and professionalism.

 

Formalities rule

Make sure that your will is a proper and valid one, professionally drawn in accordance with all the required legal formalities.

As we shall see below, our courts have only a limited ability to help out when requirements aren’t fully complied with, and that can be disastrous for your dependants.

 

A dying mother’s instruction to draw a will – too little, too late

A tragic High Court case from 2021 illustrates the dangers of delay –

 

• Dying of terminal cancer, a mother filled out a bank form headed “Will Application / Aansoek om testament”. In it she gave the bank instructions to draw her will.
• Her intentions were laid out clearly in the document – to leave everything to her minor child.
• Unfortunately she died the next day, before her will was drawn and signed. Her husband claimed that she had accordingly died “intestate” (without a valid will) leaving him to inherit a full “child’s share” with a minimum of R250,000. As their marriage was in community of property, the husband was already a 50% owner of all the marital assets, and this estate not being a large one the practical effect appears to be that he would likely inherit everything, and the child would get nothing.
• A group of relatives, trying to give effect to the mother’s wishes and to protect the child’s interests, asked the High Court to accept the bank’s instruction document as a valid will in terms of a section in the Wills Act which provides that: “If a court is satisfied that a document or the amendment of a document drafted or executed by a person who has died since the drafting or execution thereof, was intended to be his will or an amendment of his will, the court shall order the Master to accept that document, or that document as amended, for the purposes of the Administration of Estates Act, 1965 (Act 66 of 1965), as a will, although it does not comply with all the formalities for the execution or amendment of wills referred to in subsection (1).” (Emphasis supplied).

 

A cruel twist of fate

There was no doubt here that the bank form correctly set out the mother’s wishes. But there was a fatal problem – as the Court put it “…the content of the document in issue and the circumstances surrounding its execution indicate clearly that the deceased did not intend it to be anything other than a drafting instruction. There is nothing to support the contention that the deceased intended the document to be her will; everything points to the contrary.”

The form could therefore not be accepted as a valid will, and the child is left with little or nothing other than the Court’s expressed hope that the husband would if practicable “honour his late wife’s declared wishes regardless of the fact that due to a cruel twist of fate [the child] did not end up being entrenched in a will as she had intended.”

Without a doubt the Court would have come to the child’s assistance if it could have, but the clear wording of the Wills Act left it unable to do so.

 

Make a will – now!

None of us knows when Death will come knocking at our door. If you don’t already have a valid, updated will in place, make sure that “Make a Will” or “Update my Will” is at the very top of your priority list.

Your will could well be the most important document you ever sign, so getting professional advice and assistance is an easy decision here.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

 

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Article courtesy of Law Dot News | Wills & Estate Planning

Don’t Just Leave Your Loved Ones Assets – Leave Them a Legacy!

“A Legacy Letter is a way for you to share your values, life lessons, cherished memories, hopes for your family’s future, and anything else that is really important to you.”

Wills and Estate Planning is key to ensuring that your loved ones are properly catered for after you are gone. Ideally go beyond the practical and financial issues and also leave something personal, something of yourself.

Follow these three simple steps to ensure that you don’t just leave behind assets, but also a lasting and valuable legacy –

1. Firstly, leave a valid and updated will (“Last Will and Testament”). It’s the core and the foundation of your plan to protect the people you care for.
2. Next, address the financial and practical aspects. Will each of your loved ones have enough to support them? Will there be enough cash in your estate to ride out the inevitable delays in winding it up? Are children and any other vulnerable family members protected? Have you taken advice on setting up trusts? Do you have enough life insurance in place? Have you left a full “Important Information File” to help your executor and your family take control of and finalise your estate?
3. Now go one step further – don’t just leave an estate, leave a legacy. Read “How to Preserve Your Life’s Lessons for Future Generations” on Mission Wealth for ideas on how to share a meaningful “Legacy Letter” with your family. Follow the links in that article to “Leaving a Legacy” and “The New Way to Leave a Lasting Legacy”.

Let’s close with these words of wisdom from that article: “The golden rule of all estate planning is: Don’t wait.”

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

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Article courtesy of Law Dot News | Wills & Estate Planning

Estate Planning and Wills: A Check List to Protect Your Family

“Don’t fear death, plan for it” (Anon)

Amazingly, here we are in the middle of a deadly pandemic yet still some 70% – 80% of working South Africans are said to have no will in place.

That’s crazy for two reasons –

1. Without a will your loved ones are exposed   When you die your grieving family must start learning to cope without you, don’t expose them to the added uncertainty and worry that they will face if you haven’t left in place a valid will (often referred to as a “Last Will and Testament” to distinguish it from a “Living Will”).Without a will, your estate will be wound up in accordance with our laws of “intestate succession”. You have forfeited your right (and duty) to ensure that your loved ones each receive what they need from your estate, that your children and their inheritances are properly looked after, and that your estate is wound up by someone you trust.
2. Estate planning is essentialEstate planning in this context is the process of arranging your financial affairs in such a way that the legacy you leave is as large and as well-structured as possible. This needn’t be overly complicated or expensive, and everyone should have their own estate plan regardless of age, health or financial position. In a nutshell you are looking to maximise assets, to reduce estate costs and the taxman’s cut, and to streamline the process of winding up your estate so your heirs are paid out as quickly as possible.
   
   No will means no estate plan, and no estate plan means unnecessary worry, cost and delay for your grieving family.
   

 How to protect your family with a 15-point checklist

Use this checklist to make sure you provide for your family’s happiness and financial wellbeing long after you are gone –

1. Make a will: See above – a will is a no-brainer! The consequences of dropping the ball on this one are so serious, and it is so easy to make a proper will, that endangering your family’s security and happiness by not having one just makes no sense at all.
2. Don’t Procrastinate: Procrastination is human and, when it comes to contemplating one’s own mortality, entirely understandable. But it’s not forgivable – death is inevitable, and absolutely no one, no matter how healthy or young, can assume that they will be alive tomorrow. All too often death comes without knocking, so don’t fear it – plan for it. Now.
3. Beware the DIY route: As tempting as it may be, going the DIY route (online will templates are easily found) is a bit like packing your own parachute for your first jump without assistance – great if you are an expert, but for most of us getting professional help makes a great deal more sense. It’s not you but your loved ones who have to live with any mistakes you make now!
4. Ensure validity: Your will to be valid must comply with all legal formalities, and although the courts have a discretion to declare a “defective” will valid that process is uncertain, slow and expensive. Rather get it right upfront.
5. Avoid ambiguity and dispute: Any lack of clarity in the wording of your will is fertile ground for dispute, and our courts are regularly called upon to sort out bitter, divisive and expensive family feuds that could have been avoided with a professionally drafted will setting out clearly and concisely exactly what the deceased’s wishes and intentions were. 
6. Foreign assets: If you have assets in another country, you may need a foreign will as well as a South African one – ask a professional.
7. Consider business continuity: If one of your assets is an operating business, or an interest in one, put a continuity plan in place so it can be carried on without interruption.
8. Review your will regularly: This one is easily (and commonly) overlooked. You finally get a will in place and think “great, that’s it then”. Not so! Personal circumstances change, laws change, taxes change – diarise to review and if need be update/replace your will no less than annually.
9. Choose your executor wisely: This can be make or break for your family. Choose someone you can depend on to wind up your estate quickly and professionally.
10. Pay special attention to your minor children’s needs: Firstly, this is your chance to leave each of your children what they will need financially. You could split your estate in equal portions, or you may decide to differentiate based on each one’s situation and needs (a tip here to avoid a family feud – explain to everyone upfront the reason for your decision). Now is also where you nominate your choice of guardian for your minor children – don’t leave that choice to others! Ensure also that your minor children’s’ inheritances are held in trust for them, with your choice of trustees.
11. Reduce costs and taxes: To maximise what your heirs receive you need to look at all the costs your deceased estate will have to pay out. A professional can guide you through the process of minimising estate duty, executor’s fees and costs (beware of false economy here – “cheap” could also be “nasty”!). Taxes – income tax and capital gains tax in particular – can take a sizeable chunk of your estate without proper planning.
12. Nominate beneficiaries whenever you can: Where you are able to, nominate beneficiaries for your life policies, annuities, tax-free investments etc to ensure payout directly to chosen recipients, without all the delay inherent in the process of winding up your estate and in many instances reducing costs and taxes. Take professional advice here – different rules apply to each of these categories.
13. Plan for liquidity issues. Plus, what will your family live on? You don’t want the executor to be forced to sell an asset (your house or business perhaps) that you have left to a particular heir, but that will happen if there is insufficient cash in the estate to meet the various costs and taxes of winding it up. Similarly, your bank accounts and the like will be frozen once the bank becomes aware of your death, so you need to find another way to ensure that your family has cash to live on whilst your estate is being wound up (it can be a lengthy process with all the red tape). Separate bank accounts, life policies (see above), family trusts and the like might work in your particular circumstances, but specific professional advice is key here.
14. Leave your loved ones an “Important Information” file: This is critical. There are too many heartbreaking stories of grieving spouses and children floundering in a sea of confusion and worry because they have no idea where the deceased’s will is, how the estate is structured, what assets there are, what debts, how to access password-protected computers, where important documents are kept, who they should contact for help. Sometimes they are even at sea as to what assets they have in their own names. The list is endless.What should be in the file? In short, everything that your survivors might need, starting of course with details of where your will is.  Put yourself in their place – what would you need to know if you were the survivor? What information and documents would make it easier for you to get on with life?  Once again, professional advice and assistance will save your loved ones a mountain of trouble and concern.A last thought on this aspect – have “that conversation” with your family as soon as possible. It’s not easy but they deserve no less. Ideally bring them in at the start of your planning and the creation of your “Important Information” file. At the very least they must know about it, where it is and how to use it.
15. What else? No generalised estate planning checklist can ever be comprehensive. Tailor your plan to your particular needs. Brainstorm, ideally with family and professional input, what else needs attention.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews