Document your last wishes.
One of the things you cannot control is how or when you will pass away. This is why it is important that you plan ahead for the financial well-being of your loved ones, while you still can. A last will and testament is the final document you will create, outlining and detailing who inherits your estate. In other words assets, like your property, money and similar possessions. Make sure that what you’ve work so hard for, will be left to those who mean the most to you.
Sanlam has partnered with Sanlam Trust, part of Capital Legacy Group and a Sanlam Associate, to give you expert advice on wills, trusts, estates, and related services.
A will gives you the control and assurance that the people you love the most will be taken care of when you are no longer there. Without an updated will, your family could be left with financial and legal challenges and disputes that could last for years – as in the case of Paul's family in the example below. Dying intestate (without a valid will) means you have no say over who winds up your estate or what they charge.
You can save your family this undue stress by being strategic about your estate planning, and seeking the assistance of a professional estate practitioner or financial adviser – just like Andiswa did:
Andiswa was smart and got advice
She drafted a will and kept it updated
Her will is clearly worded and well-drafted
She made sure there is enough cash in her estate to cover expenses and debt
Happy heirs – she provided for her minor children in a testamentary guardian trust
Although Paul made a will, his was outdated
Didn’t adhere to the 90-day rule, so his ex-wife can inherit
(Note: Upon divorce, you have 90 days to change your will. If you don’t, it would be assumed that you intended for your ex to inherit. An ex is not automatically excluded as an heir.)
Not enough cash in his estate so his assets had to be sold, leaving less for his children
No co-guardian or trustee appointed so his ex-wife has full control over the kids’ inheritance
(Note: Even if a guardian is appointed, the mother is still deemed the natural guardian and could contest for custody. In such a situation, the High Court decides what is in the best interest of the child.)
Proceeds of estate goes into the Master’s Guardian Fund
(Note: There are currently millions in this Guardian Fund belonging to heirs that cannot be traced.)
Make sure your estate is liquid.
There are unavoidable fees such as executor, conveyancing and testamentary trust fees and other costs at the time of death. Additionally, the cash in your estate may be unavailable to your family for everyday expenses while your estate is being wound up.
You can opt to take a Sanlam Legacy Plan, which is an innovative insurance offering that complements your will and covers these fees and the other costs associated with dying. Additionally, it contributes to immediate costs as well as your family’s monthly expenses, protecting your surviving family from unforeseen financial stresses.
With the costs covered, your SLP™ ensures smoother and faster estate administration allowing us to focus on quality of service and making the loss of a loved one easier.
Download Sanlam Legacy Plan Brochure
The money you require is equal to your needs (all your debt) plus five times your annual income (to care for your family). If your needs exceed your provision, you will have a shortfall in your estate. If your provision exceeds your needs, you will have a surplus in your estate. To find out what your financial position will be, use this acid test:
The total income required to support your family is five times your annual income. Enter your monthly salary below and we will calculate the total for you.
The nomination of an executor is a big responsibility. You may nominate your spouse, but this is in most cases not a good idea, since your spouse could be emotionally shattered and not ready to make important financial decisions. Should your spouse not know what to do under these circumstances, they won’t know where to get the best advice or service. Your spouse may be exposed to someone serving their own interests, in which case the estate's chequebook might end up in the wrong hands. Generally the Master of the High Court, who actually appoints the executor or executrix, will insist on a legal professional or trust company being appointed.
Approach a reputable company like Sanlam Trust who specialises in wills, estates and trusts:
Download list of executor duties
Drawing up a will is often made complicated when there are circumstances such as ex-spouses/partners, children from previous marriages, disabled dependants, a special needs trust or any other specific wishes to be implemented. These cases will likely require a complex will to be drawn up. Here are a few circumstances that would require a complex will:
You can stipulate in your will that your children's inheritance be administered in a trust until they reach 18 years (or any later age that you may choose). Trustees manage assets in the best interests of minors, whereas guardians look after minor children. Guardians are only called for if both biological parents are deceased.
Should you divorce your spouse, you may be obliged to pay maintenance for him or her, plus your children. These obligations may be carried over onto your estate, or it can result in a claim against your estate. Some of the issues that may come to the fore are:
Disabled dependants require greater care, for which you should make provision in your will. A testamentary trust is an ideal vehicle for this. Independant trustees, who will administer the disabled person's inheritance in trust, will be able to meet this need. It is also important to determine in the will who would inherit the balance of the trust assets at the death of the disabled dependant.
Where the possibility exists that estate duty may be payable at your death, it is important to do proper estate planning. Firstly make sure that you lessen the tax through proper planning of your estate. Ensure that there is sufficient cash to pay this tax; otherwise it may lead to the forced sale of estate assets if the cash shortfall cannot voluntarily be paid or taken over by the beneficiaries. The same principle would apply if there is Capital Gains Tax to be paid.
In cases where you live with another person, both parties frequently contribute to the household (as with a marriage) and collection of assets without registering any assets on both parties' names or fully accounting for assets. The identification of assets is therefore is very important.
To avoid friction and fighting among heirs, it is advisable and practical that you and the person you are living with decide together how your assets will be inherited. This doesn't necessarily mean that you have to have a joint will, but for each to at least have their own valid will is essential.
Should you have offshore assets when you die, you'll also have a foreign estate that will have to be administered. Each country has its own legislation dealing with inheritance and the signing of wills. Your South African will won't necessarily meet with the legal requirements (or language) of the country where your assets are. That might mean that your foreign assets won't be inheritable in terms of your only will.
It is therefore important that, if you do have offshore assets, you consider having more than one will – one for your South African assets and another for your foreign assets which complies with the laws of the country where your assets are situated. This is especially important when there are immovable assets in another country.
The matrimonial law in terms of which the couple is married has a major influence on the inheritance of their assets. Generally marriages are entered into in community of property or out of community of property.
In traditional marriages and those conducted according to own customs, the inheritance of assets is usually influenced by very complex rules. Some of these rules could be bypassed by drafting a valid will. For more information on customary marriages, visit our Media Centre to find out more about the rules and legislation surrounding it.
Second or more marriages require careful planning of your will. The relationship between the stepchild and parent is a potential source of conflict. The second spouse and the children from the first marriage should ideally inherit separate assets.
If you want to donate organs, this should not be stipulated in your will. Your will only comes into effect after your death. Organ donation is only of value if you are declared braindead while your body is still functioning. Your next of kin will therefore have to give permission for an organ donation. Make sure you pass on your wishes to them.
You can also contact the Organ Donor Foundation toll-free on 080 022 6611 for more information.
Provisions clauses linked to an inheritance that had not been properly thought through could leave an heir severely hamstrung even though it was not the intention. Some of the provisions may be regarded as a non-peremptory directive or merely an indication and is not binding, unless it indicates that someone else will benefit if such directive is not carried into effect.
Provisions that are immoral (contrary to good morals of public policy), such as making your daughter's inheritance subject to the proviso that she has to divorce her husband before she can inherit, can be declared invalid provisions. The same applies to unfair discriminatory provisions that are in contravention of a country's Constitution.
If you are unsure of attaching any provisos to an inheritance, rather get advice from one of our experts.
If some of your heirs are insolvent at your death, their inheritances will form part of their insolvent estates and will be used to pay creditors.
To avoid this, the benefits should not be bequeathed directly to the heir, but to a discretionary testamentary trust to be administered to the benefit of such an heir until rehabilitated. This way, the heir's inheritance will be safeguarded for him and his children.
If you and your spouse are married under the accrual system, the spouse whose estate accrues the least in value during the marriage will have a claim against the spouse whose assets grow the most. Accrual claims are handled just like any other claim against the estate of the deceased. It is critically important that you plan your estate accordingly.
Much has been said about wills being your last word here on earth. They could also be described as a manual for the execution of the last wishes of the deceased. This is not wrong, but what about the wishes of the heir? How does this affect him or her? Normally one doesn't hear from those who inherit, until they complain about delays in the Master’s Office or get involved in litigation involving claims for or against the estate. It may sound strange to say that a person does not need to accept an inheritance, but it can happen – usually for financial reasons.
It is known in legal circles as doctrine of election. In more fancy language it is known as adiation (acceptance) and repudiation (refusal) of the inheritance as set out in a will. To use an example: a father bequeaths certain assets to his son or daughter, but places a certain obligation on one of them, such as to stipulate that the heir must give a part of the inheritance to another member of the family or look after that person.
In short, the doctrine of election makes it possible to receive something in exchange for the heir paying or giving something to another person. This is when the heir has the choice of accepting or refusing his inheritance.
In Islam, it is mandatory to have a will to ensure that your estate is administered in terms of the Islamic Law of Inheritance. A Shariah will differs from other wills – one of the main differences is that the heirs are determined upon the death of the testator and not during his or her lifetime.
At Sanlam Trust, we have qualified drafters that can help you draw up a compliant Shariah will. Find out more about the requirements or contact us.
Please have a look at our frequently asked questions if there is anything that you’re unsure about – otherwise, contact us directly.
It is not advisable to describe your wishes for your funeral arrangements or cremation in your will. The content of your will is frequently only read after the funeral, which makes it too late to see to your wishes. Rather convey such wishes to your next of kin before your death.
Avoid any codicil to a will, since it carries risks. The law sets strict requirements with which one must comply and which could cause both the will and a codicil to be invalid. It’s advisable to incorporate what you want to describe in the codicil into the main body of the will and avoid the risk.
As you progress through life, your needs and those of your family may change. Life-altering events often have an impact on the content of your will, so you should review it regularly (at least every two years) to allow for any changes in your family or financial position. Examples of changing circumstances that could affect your will include: the death of a spouse, the birth of a child or grandchild, divorce, a money inheritance, a property or business acquisition, and so forth. A well-drafted and up-to-date will cannot easily be disputed, and could prevent many sticky and unpleasant situations for your heirs.
It is not advisable to try and describe all your assets in your will, as you risk omitting assets obtained after drafting the will. Describe only those assets that will be bequeathed to specific heirs and bequeath the rest of your assets in set proportions to specific heirs.
Terms such as "cash" and "movable goods" should not be used unqualified in a will, since this may be interpreted in different ways. This could lead to serious problems and fighting among heirs. To avoid any misinterpretation, each bequest should be clearly defined. For instance, when referring to “cash” you need to clearly state whether you are referring to the cash in your vault at home or the cash in your savings account. Movable goods must also be defined in clear detail as it could include almost everything from clothes and jewellery, to vehicles and furniture. This is different from “immovable property” like houses and land.
Your death does not mean the end of contracts entered into before you died, unless it was a contract of a personal nature that requires your personal skills (such as an ordinary employment contract of course). In all other cases, the executor of your estate is bound to your contracts. It may be necessary to grant express and specific authorisation in your will to the executor in order to execute contracts. Companies or closed corporations which you control will also not be freed of any of their contractual obligations to clients and staff.
If some of your heirs are insolvent at your death, their inheritances will form part of their insolvent estates and will be used to pay creditors. To avoid this, the benefits should not be bequeathed directly to the heir, but to a discretionary testamentary trust to be administered to the benefit of such an heir until rehabilitated. This way, the heir's inheritance will be safeguarded for the heir, spouse and children.
An executor administers your estate affairs and executes your final wishes according to the stipulations of your will. It is best to choose someone yourself, who you trust to ensure that all the terms of your will are carried out.
A financial adviser can help you make the most of what you have - contact us today.
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