Your Will- Crucial Things to be Aware of

We often come across instances where someone passes away without a will, or with a will that has not been adequately drafted, or where the will has not been signed correctly. There are various implications for all of these scenarios, which we will explain below, as well as provide some insight into why wills are so necessary.

Why do you need a valid will?

It is essential that you have a will in place, and that it has been validly signed. If you don't have a will, or it has been incorrectly signed (to such extent that it is invalid), then your estate will devolve in terms of the Intestate Succession Act 81 of 1987. This means that your estate will be wound up as if there is no will, which can result in a situation where your estate is distributed in a way that was contrary to your wishes, as your intestate heirs will inherit as opposed to your heirs whom you would have nominated in your will (if these heirs were not the same as your intestate heirs). It can also make the winding up process longer, as in some cases, intestate heirs need to be traced.

Issues commonly experienced with wills

People often use poorly drafted templates for wills, or don't deal with all aspects of their estate. For example, a person might leave certain assets to heirs but then don't deal with the residue of the estate (everything else besides the named assets). This means that a part of the estate will have to be distributed in terms of intestate law. Wills are often also not correctly signed in compliance with the Wills Act 7 of 1953. Beneficiaries of the will (being nominated heirs or the executor) should not witness the will, as the heir will then be disqualified from inheriting in terms of the will. The will also has to be signed by two competent witnesses- unfortunately, without witnesses, it will not be accepted as a validly signed will. Each page needs to be signed by the testator, and needs to be signed in?the presence?of the two witnesses. Any amendments to a will also need to be signed by the testator and two competent witnesses, in their presence. The original will also needs to be kept in a safe place, because unfortunately, a copy of a will is not acceptable, unless a court orders otherwise. You also need to ensure that your will is up to date- situations change, and your will should also always reflect your current wishes. If you have recently divorced, you should also ensure that you update your will- if you do not update your will within 3 months of your divorce, and you pass away and your ex-spouse is still a nominated heir in terms of the will, your ex-spouse will then inherit in terms of that will.

Why you need proper estate planning

There are numerous factors to consider when preparing a will. You need to have sufficient cashflow for the estate to be able to pay any outstanding debts (including taxes) due at death, as well as administration expenses (executors fee, conveyancing fees etc) as well as any capital gains tax or estate duty that may be imposed on the estate. It is not correct to think that debts "disappear" on death- all debts, including any outstanding taxes, will need to be settled on death. Proper estate planning plans ahead for expenditure, so that heirs are not left in a sticky situation on death, or in the event that there is not enough liquidity in the estate. There are also estate duty considerations to be mindful of when drafting a will, which can lawfully reduce the estate duty payable by the spouse (such as bequests to a surviving spouse, which is a qualifying deduction for estate duty in terms of section 4q of the Estate Duty Act 45 of 1955).

What you need to know about executors

Executors are entitled to charge up to a maximum of 3,5% plus VAT on the total value of the assets of the estate, as well as 6% plus VAT on the total post-death income of the estate. These fees therefore need to be factored in when going through the estate planning process. Once you nominate an executor in a will, and you pass away, and your executor accepts the appointment, it cannot be withdrawn unless ordered by a court or if the executor resigns (which is not always likely to happen). This means that you should ensure that you are satisfied with whom you have nominated to administer your estate. It may be worthwhile discussing this with family members, so that they are aware of who to speak to in the event of your death. It is also worthwhile checking who you have nominated in your will- especially if you have not updated your will in a while.

Conclusion

Seek professional advice when drafting a will, and be sure that you go through an estate planning process when doing so. Store your will in a safe place. Spence Attorneys, Notaries & Conveyancers, Cape Town and Johannesburg, can assist you with drafting your will, advise on estate planning and tax, and store your will in safekeeping on your behalf. Email?[email protected]?to find out more.

This article is for information purposes only, and should not be regarded as legal advice. Spence Attorneys will not accept any liability whatsoever, and the reader should always seek legal advice prior to acting on any information contained in our online articles. Copyright.