By Remay de Kock, Legal Advisor, BDO Wealth Advisers
It is known as the cycle of life: you go to school, get a job, buy a house, settle down, get married, have children – your mid-life stage. During this stage you will tend to spend most of your energy on possibilities of settling the financial liabilities incurred in order to finance all the aforementioned. You spend so much time carrying the weight of financial liabilities and the decisions associated with it, that you tend to ignore, forget and overlook the effects of your after death legacy. Your circumstances change on a daily basis - have you made time to consider updating your Will? Do you even have a Will?
Should you die without leaving a valid Will, your estate will devolve according to the provisions as stipulated in the Intestate Succession Act. In the event that your family are sure of the fact that you did indeed have a Will, but same cannot be found, your estate will have to be administered as if you have no Will. The Intestate Act then involves having your assets transferred to persons as mentioned in the Act, resulting in your assets possibly devolving to persons who you may not have wanted to inherit any assets, not to mention said person having to inherit your entire estate. In the unfortunate event of yourself as well as your spouse dying simultaneously, you will die intestate and your estate will devolve upon your children (section 1(1)(b) of the Act). Taking this into account, as well as the fact that should other circumstances arise where your children inherit in terms of this Act, if your children are still minor, such portion of your estate, due to each of them, will be held by the Guardian’s Fund at the Master of the High Court until said children reaches majority at the age of 18. Your children will then have to claim from the Fund, which can take a number of years before it will be paid out.
If you have a valid Will in place, you are allowed the opportunity to appoint a guardian whom you trust and regard as a fit and proper person to look after your child. The Children’s Act regards the parents as the natural guardians of a minor child – along with the High Court, who is considered to be the upper guardian of minor children. You, as a parent, consequently have the right to appoint a guardian of your minor children. If you and your spouse pass away, the nominated guardian will then be appointed as such and all funds will be payable to the guardian – should you have a Trust in place (Inter Vivos or Testamentary), the funds will be paid to the Trust for safekeeping and payable by the Trustees to the guardian on behalf of your children. In the absence of a valid Will and any nomination to this regard, a Tutor will be appointed by the Master of the High Court to attend to the affairs of your minor children. The effects hereof are explained in section 43 and 44 of the Administration of Deceased Estates Act which stipulates that a minor is allowed to inherit cash, movables and immovable assets, but subject to the following:
- In terms of Section 43 of the Act an inheritance of immovable assets can be transferred to a minor by the executor;
- However, section 43 and 44 further states that an inheritance of movable assets and cash can only be received by the minor if his guardian accept such on his behalf. The acceptance of cash or transfer of movable assets on behalf of the minor by the guardian is also subject to the condition that the Will of the Testator has to direct this and if security has been given by the guardian to the satisfaction of the Master. If neither of the above is provided for, the executor will have to pay the cash (both by way of liquidity which already existed in the estate and by way of movables that has to be sold), into the Guardian’s Fund.
The Guardian’s Fund is administered by the Master of the High Court free of charge. Should the minor have maintenance needs, these claims will have to be lodged at the Guardian’s Fund. The minor is however not allowed to lodge the claim. The claim will have to be made by the guardian or the tutor of the minor. The funds of the minor will only be made available to the minor when he attains the age of 18 years.
The consequences of not having a Will in place, as can be seen, are extensive. In managing your everyday life, you need to take the time to consider the effects of not having a Will or the effects of having an outdated Will in force. To ensure that your estate will be properly administered, that your wishes will be met after your death and that you have a plan in action in place for the emotional and financial care of your children, you need to have a valid, updated Will. This allows you the luxury of making an informed decision and further allows for proper estate planning of and for your family.
When seeking the advice of an estate planning professional, who will be able to assist you in making informed decisions as to your specific situation, you will be able to rest assured knowing your spouse and, most importantly, your (minor) children will be taken care off.
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