Your last will and testament is one of the most important documents you’ll ever execute. While most of us would prefer not to talk about or plan for a time when we’re no longer around, your family will be grateful if you’ve seen to it that your affairs are in order and that your wishes are clearly stipulated. Your will should be regularly reviewed, especially if legislation or your circumstances change. Here’s a handy checklist to help you determine whether your will is still up to date.
1. Is the date of signature on your will more than five years ago?
If it is, you should make an appointment with us to update your will. Personal circumstances often change over the course of a few years.
2. Does your current will revoke previous wills made by you?
Your will should have a clause that specifically states that it revokes previous wills or other testamentary dispositions made by you. If you have more than one will dealing with assets in different jurisdictions, you should make sure that these wills do not unintentionally revoke each other.
3. Do you have wills that deal separately with your South African and non-South African assets?
The administration process is easier if the wills are separated. South African legal terms used in wills are often different to those used in other countries in which you may have assets – this may cause interpretation issues, with additional cost and time implications.
Some jurisdictions have forced heirship rules instead of our wide powers of testamentary disposition. Immovable properties situated in such countries may therefore not devolve in terms of the directions in your will, but in terms of these rules, to specific persons. If your worldwide will drafted in South Africa is in Afrikaans and you have foreign assets, further delays and costs may occur as a translation of the will may be needed to deal with the foreign assets. Some jurisdictions do not accept wills signed in terms of the laws of other countries and you should then sign a will in that jurisdiction dealing only with the assets there.
4. If your answer to question 3 is yes, does the will that deals with the respective assets in and outside South Africa clearly state that it deals only with those assets, and that it revokes only wills dealing with the respective assets situated in the particular jurisdiction?
If not, one will may unintentionally give rise to the different will provisions being in conflict with each other. Even worse, one will can revoke the other, resulting in you potentially dying intestate in respect of certain assets.
5. Have you established the cash requirements in your estate?
Cash shortfalls may delay the winding up of your estate, and/or may cause some of your assets to be sold. Cash shortfalls may be as a result of outstanding liabilities in your estate, including bonds over fixed property, suretyships signed by you which are now being claimed against your estate, transactional debt, medical and last illness expenses, executors’ fees, estate duty and capital gains tax on death, or cash bequests in your current will. If a SA trust has advanced a loan to you, to for instance use for your foreign investment allowances and invest outside SA, you should consider how your SA estate will repay this loan on your death, to avoid foreign assets having to unnecessarily be brought back to SA to settle the loan to the SA Trust.
6. Have you negotiated the executors’ fees with your nominated executor and have you included the agreed fees in your will?
The maximum legal tariff is 3.5 % of the gross value of the assets administered by the executor, plus VAT in many instances. A further 6% plus VAT may be charged on income collected by the executor after your death. You can agree on a discounted fee with your nominated executor and ask the drafter of your will to place it on record in the will.
7. Have you nominated guardians to your minor children in your will?
The nomination of guardians in your will serves as an indication of your wishes in this regard. A conversation should be had with the nominated persons to ensure that they are aware of this (and in agreement).
8. Have you directed that bequests to minor children (below 18 years of age) be handed to their legal guardians or kept in trust until at least majority age?
If not, bequests to minors may be paid into the Guardian’s Fund and kept under control of the Fund until the children are majors.
9. Have you exempted the nominated executor as well as the trustee(s) of a trust created in your will from the requirement to provide security to the Master of the High Court?
If not, the Master may require them to furnish security, which may be expensive and cause them to not accept appointment as such. Possible delays may occur as a result.
10. Have you considered the consequences of your marital regime on your death (if married)?
A marriage in community of property may mean that you can only dispose of your half of the assets in your communal estate in your will. The accrual system may have unintended consequences if not taken into account, for instance that your surviving spouse would first receive the accrual claim proceeds, which may reduce the size of bequests to other persons in terms of your will.
11. Have you dealt with loan assets in your will?
You can bequeath loan assets in your will to the persons owing you the loan amounts, thereby cancelling the loans – with the effect that these persons don’t have to pay the loan amounts to your estate on your death.
12. Have you considered the effect of US or UK situs assets, and the potential liability for inheritance taxes in the US and the UK on your death?
Assets situated in the US or in the UK, such as fixed property and shares listed on an exchange in those countries, may cause your estate to incur inheritance taxes in those jurisdictions at much higher rates than in South Africa. In addition hereto, the winding up of your estate can be delayed with years to deal with the disclosure thereof to the tax authorities in those jurisdictions.
13. Do you maintain your parents or provide towards their maintenance or medical expenses?
You should consider how these expenses will be paid when you are not there to do so. Your parents can be maintained from a testamentary trust or as a condition to a bequest in your will.
14. Do you have a maintenance liability towards a previous spouse or to children in terms of a divorce order?
Depending on whether the liability carries on after your death, you should provide for payment thereof in terms of your will to avoid your estate having to make monthly payments for years to come. This could mean that your executor won’t be able to finalise the estate, as he or she may not be able to distribute the residue of the estate.
15. Do you have bank accounts in overseas jurisdictions? If so, are you the only account holder or do you hold accounts jointly with someone else?
If you hold a bank account in joint tenancy with your spouse, the bank will on receipt of your death certificate remove your name off the account, and it will carry on in the name of your spouse. No probate will be required in the overseas jurisdiction (eliminating the associated costs) to transfer the bank account to your spouse in this way.
16. Do you own business interests? If so, have you provided for continuity in the business?
You can enter into a buy-and-sell agreement with an associated life policy to provide the liquidity to your business partner to buy your share of the business. Alternatively, you should provide for succession in your business in terms of a shareholders’ agreement or a bequest in your will. You can also provide for continuity by passing a resolution to appoint a director to succeed you as such, and make sure that signing powers are in place to such a person to seamlessly continue with the day to day running of the business.
17. Have you nominated beneficiaries for the proceeds of life assurance and/or pensions benefits?
Proceeds will pay out to nominated beneficiaries outside your estate, and won’t be subject to executors’ fees, providing beneficiaries with liquidity at an earlier stage without having to wait for the administration process of the estate to take its course.
18. Do you have assets outside SA, and would like your heirs to be able to keep it there?
You should make sure that your entire estate (including your non-SA assets) are not bequeathed in your will to a SA trust. In terms of exchange control regulations in place at present a SA trust may not hold foreign assets (other than asset swaps) and such bequests may then have to be sold and the proceeds repatriated to SA to be held by the SA trust.
If you need assistance with any of the above, please contact Marteen Michau at marteen@fidelisvox.co.za to help you, with pleasure.