The Power of Your Will

The Power of Your Will

Should you have a will, do you even need a will? The simplest answer is most definitely, YES!

Everyone should have a will. This is the single best gift you can leave for your family – peace of mind in an emotionally difficult time.

South Africans have the power to put in writing our last wishes for our family and assets. This is called a will. From sixteen years of age, a person is eligible to write a will. This allows you to appoint someone of your choice to distribute your assets as you would have intended. This is the executor and their responsibility is to carry out your decisions at your death, in other words to wind up your estate.

Why is it important to appoint an executor to wind up your estate?

Only an executor is recognized by law to authorize the distribution of your assets to your beneficiaries, and therefore you cannot appoint someone who is not duly qualified, for example you cannot appoint your wife, husband, brother, sister, etc. if they do not have the necessary qualification or meet certain criteria. If you have not appointed an executor prior to your death, the master of the court will appoint one for you (always better to choose your own!). Once the executor is approved they are answerable to the master of the high court and responsible for ensuring all your assets are distributed to beneficiaries as per your will.

It is in your best interests to appoint an executor of your choice in your will, as the absence of a valid will and appointed executor may cause major delays in winding up your estate which could leave loved ones financially vulnerable and may even result in your preferred beneficiaries receiving nothing. In the majority of cases, one’s spouse would be the beneficiary of the estate. If there are minor children involved you want your spouse to have the financial means to maintain their and your children’s lifestyles after you are gone. With no valid will and appointed executor of your estate you run the risk of the inheritance being shared between your spouse and children (who could be minors) which may place your spouse (who would now become responsible for managing the finances) at increased financial risk forcing the sale of assets to fulfil the requirements of distribution.

Let us explore this example further:

A married father with three children dies Intestate (without a valid will). By law, the surviving spouse will never inherit less than R 250 000 as long as the value of the estate is sufficient but the problem lies in the children (who could be minors) inheriting the rest, leaving the family financially vulnerable. The issue with minors inheriting is the need to sell off assets (or even the primary residence) as minors cannot legally own property, to give them their share. If the spouse has capital from say a life policy, they can avoid this by allocating funds to the child according to their share to avoid the sale of the property. So even the house has to be divided amongst the children.

Example 1:
• Value of intestate estate is R550 000.
• The deceased is survived by a spouse and 3 children.
• A child’s share amounts to R137 500 (R550 000 divided by 4 (3 children plus spouse)).
• The child’s share is less than R250 000. Therefore the spouse will inherit R250 000 and each child will inherit R100 000. (R550 000 less R250 000 to spouse, divided by 3).
• Assuming the children are minors, in the end the spouse (mother) is left less than half of the estate to continue raising the 3 children.

Example 2:
• Value of intestate estate is R1 250 000.
• The deceased is survived by a spouse and 3 children.
• A child’s share amounts to R312 500 (R1 250 000 divided by 4 (3 children plus spouse)).
• The child’s share is greater than R250 000. Therefore the spouse will inherit R312 500 and each child will also inherit R312 500 (R1 250 000 less R312 500 to spouse, divided by 3).
• Assuming the children are minors, in the end the spouse (mother) is left a quarter of the estate to continue raising the 3 children.

Whilst writing a will may feel difficult, as it reminds us of our mortality, taking the time to put in writing our wishes after our death can actually keep our legacy alive.

*Note: This blog is merely an example of the possible outcomes of the winding up of an estate. It is merely for information purposes and does not constitute advice.

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