The importance of estate planning and having a will in place

By Naeelah Williams, Cape Town

Estate planning can be defined as planning and preparing for the transfer of a person’s assets upon death. Policies, pension funds, immovable and movable property all form part of one’s deceased estate. However, so does one’s debts and liabilities.

This article aims to amplify the significance of estate planning and will elicit important factors to be considered when doing so.

Planning one’s estate is crucial to ensure that your loved ones are looked after when you pass on. Having a Will drafted is therefore a vital part of getting your financial affairs in order and the foundation of every person’s estate plan.

ProBono.Org Cape Town has seen a number of clients who require assistance with the winding up of a loved one’s estate, only to discover that the deceased estate does not have the necessary liquidity required to settle the debts in the estate, or that people who have never cared for the deceased are to inherit. In most instances this results in extremely trying times for the family members, heirs and dependants of the deceased.

Here are four important factors to consider when doing the necessary planning:

1. Have a Will drafted by a qualified professional.

There are certain formalities in terms of the Wills Act, 7 of 1953, that have to be complied with in order for a Will to be accepted as valid by the Master of the High Court. Many clients approaching ProBono.Org present Wills that often do not comply with all the prescribed formalities which, in essence, renders the Will invalid.

– Once drafted, it is of utmost importance to review your Will on a continuous basis and to ensure that it is up to date, especially after major life events such as death or divorce, and
– Leave clear directions with someone you trust as to where your Will can be found.

2. Take care of who you appoint as the Executor of your estate.

Understanding the importance of this becomes apparent when one understands the role of the Executor. The Executor is the person you appoint to be in charge of your financial affairs after your passing. The Executor’s role is an important one and it is essential that you consider whether the person you are appointing understands the responsibilities of administering a deceased estate.

3. Nominate legal guardians for your minor children.

This is of utmost importance if you have minor children. A testator has the freedom of testation and may appoint in his or her Will the person who will act as the children’s guardian upon his/her death. In almost all instances, the surviving parent becomes the guardian, and for this reason many people tend not to appoint a guardian when drafting a Will. However, we urge people who are in the process of getting their affairs in order to nominate a guardian in the event that the surviving parent passes away. This is essential as every parent would want the person acting as the guardian of their minor child/ren to give him/her the same love and care the parent would have given.

4. Consider how your debts may affect your estate.

The heirs to your estate are often burdened by the debt you incurred during your lifetime. It is thus important to be honest with your heirs and to start paying off your debt while you are still alive or, alternatively, to consider taking out some form of life or debt protection insurance.

It is of paramount importance to take heed of the implications of passing on without leaving a valid Will. In South Africa, if a person passes on without a valid Will, his/her estate will be administered in terms of the Intestate Succession Act, 81 of 1987. Intestate succession involves matters around ‘blood’ relationships. If one passes on intestate, one’s estate will be inherited by his/her closest blood relatives. This would entail that the deceased’s spouse will receive R250 000, 00 or a child’s portion, whichever is greater. The residue of the estate will be inherited by his/her children in equal shares. Should the deceased pass on without leaving behind a surviving spouse, the entire estate will be inherited by his/her children in equal shares. If the deceased passes away without being survived by a spouse, or any descendants, the estate will be inherited by his/her parents and thereafter by his/her closest blood relative/s.

Comprehending and dealing with the loss of a loved one is devastating. It is however advisable and strongly recommended that family members make contact with the Master of the High Court and all other relevant financial institutions as soon as is reasonably possible, as fraud and criminal activity are rife even during trying times such as death.

 

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