“Most people do not know whether their loved ones have executed a Will, where the original might be kept or who has been nominated to wind up the financial affairs of the deceased.” South African Registry of Wills and Testaments’.While it is probably not the conversation of choice over dinner, having an updated Last Will and Testament [Will] is arguably one of the most important things you can do for yourself and your family. Your Will legally protects your spouse, children, and assets and gives you the opportunity to detail exactly how you would like things handled after you have passed on.
“Having a Will helps minimize any family fights that may arise, and clearly details ‘who’ you want to get ‘what’”
There is the perception that only “wealthy” people need a Will but
Wills contain so much more than merely how you wish to distribute assets. Let’s look at some of the most important reasons for having a Will:
1. You decide on how your estate will be distributed. While we hate to think that there might be arguments over our estate, having a Will helps minimize any family fights that may arise, and clearly details ‘who’ you want to get ‘what’. If you die without a Will you are deemed to die ‘intestate’ and your estate is then distributed according to the law of intestate succession – meaning that the Master of the High Court will appoint a curator to administer your
estate as they see fit.
2. You get to nominate the guardian of your children. Your Will allows you to nominate who should take care of your minor children. Without a Will the State will choose among family members or a state-appointed guardian and this might not be the person you would have chosen, a situation that no-one wants to put their children in.
3. Most importantly, Testamentary Trusts can be included in your Will – This is a trust which is especially suited to the protection of minors and other dependants who aren’t able to look after their own affairs. A testamentary trust is a trust created in terms of your Will and comes into effect after your death. The trust is administered by trustees appointed in terms of your Will, and usually terminates after a predetermined period or at a determined event, e.g. a minor turning 21 or the death of an income beneficiary. This trust can cover everything in your estate or else selective aspects such as Life Policies, specific assets and lump
sums of money.
4. You get to minimize the estate duty. Having a will allows you to minimize your estate taxes through understanding what can be left to family members, what can be donated to charities etc. These could reduce the value of your estate when it’s time to pay estate taxes.
5. You decide who will be the Executor of your estate. Executors ensure that all your affairs are in order, including paying bills, notifying banks and other businesses, cancelling your credit cards and other critical administrative duties. Understanding that your executor will play the biggest role in the administration of your estate, you need to be sure to appoint someone who is honest, trustworthy, and organized. [This is often not a family member as it requires specialised knowledge and an unemotional unbiased position].
While our philosophy at Harbour Wealth is to create and protect wealth, the first step in any discussion with our clients is to determine if they have a current Will and if not, assisting them in getting this done. Wills need not be complicated and there are many Banks and Institutions that facilitate this for free.
To view the criteria required for a Will to be considered valid, as regulated by the Wills Act 7 of 1953, you can visit: http://www.gov.za/faq/wills-trusts-and-distribution-estates-deceased-persons.
Acknowledging the importance of a Will is a great start but along with a Will are many other critical documents that we should have at hand. We all know the complexity we face in trying to keep track of legal documents, warranties, certificates, passwords and pins in our lives but none more so than when there is the additional trauma after an unforeseen tragedy that requires one of these documents to be presented. If something were to happen to you, would your loved ones not only be able to quickly locate your important information but would they know what is available to them?
While it is not exhaustive, these critical documents should be easily accessible by you and your loved ones:
Last Will and Testament
Death and Birth Certificates
Insurance Policies including: Homeowners, Householders, Car, Medical, Life, Disability, Funeral, Income Protection and Retirement policies
Financial Adviser/Insurance Brokers contact information and all the policy numbers
Contact details for your Company’s Human Resources Department to access policies held with the company
Financial accounts: Bank, Investment, and Credit Card/Loan accounts information, including institution names, phone numbers, account numbers and passwords or pins.
These are important because some accounts have extra benefits cover attached to them that you might not be aware of, including settlement of debt or lump sum pay outs. If families are not prepared, frozen bank accounts can make life very difficult for them.
Following on from this is the critical question “Where should I keep my Will? […And other vital documents]
Being the 21st Century, cloud based online storage is increasingly popular as an option but this would deal mostly with copies of originals so let’s look at some suitable storage options for the originals.
Safety deposit boxes are ideal as they are fire proof, safe and easy to access by family members. If you have a fire proof safe at home or the office, these too would be a good option but ensure that your loved ones know where it is and have access to it. Keeping certified copies of all original documents at a separate location is advisable as a backup and leaving a copy with your Financial Adviser is sound practice.
“Always plan ahead. It wasn’t raining when Noah built the ark.” Richard Cushing.
This article is a general information sheet and should not be used or relied upon 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 financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)