Wills and Estates in South Africa - Frequently Asked Questions | Legal Articles

 

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Wills and Estates in South Africa - Frequently Asked Questions

Finweek is a South African weekly business magazine and is one of the country’s largest circulating business titles which focuses on business and investment issues in the country.

With their primary audience being executives and investors, we were honoured to be approached by one of Finweek's business journalists to answer frequently asked questions related to wills and estates in South Africa.

Below are the questions they asked regarding wills and testator fees in South Africa. The answers provided by us will be used by Finweek to publish an article on personal finance.

wills and estates in south africa

Wills an Estates in South Africa – Frequently Asked Questions

Why is it important to get a will?

During your lifetime you have absolute control of your estate and can therefore exercise any intention you wish to. 

Upon death you no longer have this ability and must, while being able to do so and in order to ensure that your wishes are carried out, record same in writing. 

Leaving verbal instructions or having the intent to execute a will, but never actually doing so, is insufficient.  Moreover, attempting to draft a Will yourself or acquiring one from a news agency and not complying with all the prescribed formalities may render the Will completely invalid. 

A Will regulates what happens to your estate (assets and liabilities) after death and should make provision for the maintenance and care of your minor children and other dependents, who may inherit from you. 

Professional drafting and applying the appropriate estate planning strategies ensures the plans you worked so hard to put into place become a reality.  Otherwise, your life’s work could be needlessly devalued.

At what point in life should the average person consider drafting a will?

Every person of the age of 16 years or more may make a Will, unless he/she is mentally incapable at the time to do so. 

Our circumstances change and it is advisable to reconsider our financial positions often and at certain life events such as the birth of a child, a divorce, entering into a new marriage and perhaps the purchase of a second immovable property.

How should one think about constructing one’s will when it comes to their immovable property, moveable property and intellectual property?

To ensure that you are not, by accident, leaving any asset or legatee out of your Will, one should specifically address assets such as intellectual property rights in your Will by name and detail as it is critical to draft your bequests correctly. 

The same applies to any other asset, whether movable of immovable, bequeathed to a specific person.  Further consideration should be given in the event that specially bequeathed assets are encumbered by way of mortgage bond and/or credit agreement. 

The common law assumption is that an encumbered asset is bequeathed unencumbered, unless the Will stipulates otherwise. 

Should no credit life cover exist, the debt in respect of the specifically bequeathed asset must be extinguished from the residue in the estate and in such instance perhaps leaving nothing to residual heirs, which event may not have been the testator’s true intention.

Who should the executor of the will be, if not a professional?

The role and duties of an executor is not a simple task and should preferably be a person or institution familiar with and specialising in deceased estate administration.  It is also an option to appoint a skilled executor together with a surviving spouse or a direct family member such as a parent or child. 

The executor will definitely do the bulk of the work, but at least the surviving spouse or direct family member will feel included and can, where applicable, bring important family issues into consideration.

What happens in instances where spouses or partners die commorientes?

Where persons lose their lives in the same disaster (commorientes), it may be important to determine which of them died first, especially where they stand to inherit from each other. 

The general rule is that if it cannot be established beyond doubt who died first, no presumption of either simultaneous death or of survival exists.  In the absence of evidence to the contrary, the courts will find that commorientes died simultaneously. 

To overcome the inquiry, the wills drafter should provide for the appropriate clauses and wording in a Will not only for testators dying simultaneously, but dying within a short period of each other in order that their joint or separate estates may devolve directly upon substituted beneficiaries.

What are the considerations in setting up a trust mortis causa?

The trust, mortis causa or better known as the testamentary trust, is created by Will of the testator (founder) and comes into existence upon the death of the testator (founder). 

It is suited for i.e. the protection of minor or mentally incapacitated individuals’ interests who may inherit in terms of the testator’s Will.  The Will should contain the provisions of the trust, the powers and duties of the trustees as well as the event/s that would lead to termination of the trust. 

A wills drafter should apply careful consideration to the trust provisions to be incorporated into the Will, which will provide the Testator with the assurance and comfort that his wishes will be carried out upon his death.

What are the benefits and pitfalls of a joint will among spouses/partners?

A joint Will is perhaps the most popular form of Will, especially among spouses married in community of property. 

Depending on its form, it might constitute massing and the wills drafter should make it perfectly clear whether massing is intended or not.

A joint Will also operates upon the death of the survivor, should the survivor (last dying) not have made his/her own testamentary dispositions later on.

Executor Fees

How should a testator think about the execution of his/her will in terms of executor’s fees?

A testator should apply careful thought as to who to nominate/appoint to the role of the executor in his Will, as a disinterested or inefficient executor could prove disastrous.  An executor skilled in the field of deceased estate administration will save much time and hassle and can be well worth the fee.

Executor’s fees can rack up to 3.5% and more of the total estate value. What in the estate is excluded when executor’s fees are calculated?

Asset value in respect of assets dealt with by the executor within the deceased estate (or in the liquidation and distribution account) is considered when executor’s fees are determined. 

However, for estate duty purposes, the Estate Duty Act declares that the estate of any person shall consist of all property of that person as at the date of death and of all property which is deemed to be property of that person as at that date.

Can a testator negotiate these fees before they die?

Most definitely.  It is advisable that such an agreement be reduced to writing and recorded in the testator’s Will.  An executor’s remuneration may not exceed the prescribed tariff which is currently 3,5 % of gross asset value. 

In addition, an executor is further entitled to an income fee of 6 % on post death income accrued and collected and in the event of the executor being a VAT-vendor, same will be applicable to the executor’s fee as well as the income fee.

Further Advantages of a Properly Drafted Will

1.      It gives your loved ones clarity and transparency, speeds up the administration process and avoids conflicts and disagreements;

2.      It protects your estate from paying excess tax and/or having to sell estate assets due cash shortfalls or insolvency and may ensure that your nominated heirs receive their full inheritance as you intended;

3.      You are able to ensure that your loved ones are taken care of in financially savvy and cost-effective ways;

4.     It ensures your wishes regarding matters such as pets, organ donation, bequests to charities and burial versus cremation are carried out precisely as you wish;

5.     Through your Will, you can not only appoint an executor but the most suitable person/s as trustee/s and guardian/s (where applicable).

Van Deventer & Van Deventer Incorporated – Wills and Estates in South Africa

Our attorneys can provide you with expert, legal assistance with drafting your will in a way that ensures your estate is administered according to your requirements.

If you would like more information on the importance of having a properly drafted will, or for assistance with drafting yours, please contact us.

 

 

Comments are closed for this post, but if you have spotted an error or have additional info that you think should be in this post, feel free to contact us.


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