During life we have so many pressing factors to consider – career, business, income, tax, education, investments... We’re dealing with the present to ensure a stable, secure future, and it may seem “unnecessary” to incur further costs to draft a will.
The truth is that a valid will is one of the foundations for achieving that stable, secure future.
When drafting a will, it’s important to ensure your affairs are in order, so the administration process is as smooth as possible, and that your family has the financial means to be looked after at your death.
Wills should also be regularly updated to take into changes in life circumstances and your wishes for your heirs.
These are the prime considerations…
Nominate an Executor, ensuring successive nominees are mentioned in case of failure of the first nominee. Not doing this can delay the administration process.
Provide for alternative heirs, in the event of them passing away before you do.
Provide for minor children. In most cases it is advisable to provide for a testamentary trust, but each case must be assessed on its merits. If you do not provide for a trust, all funds payable to a minor may be paid into the guardian’s fund if the Will does not specifically refer that payment may be made to the guardian of such minor.
Deal with your foreign assets. If nothing to the contrary is stipulated, the common-law rule is that movable assets such as bank accounts and investments are governed by the law of the testator’s last domicile. For immovable property, the law of the place where it’s situated applies.
Your Will needs to be signed by two witnesses in the presence of yourself and each other. Ensure that the witness signing the will, is not a beneficiary, executor, guardian, trustee in terms of the will or any spouse of these persons. Should any of these persons sign as a witness, although not invalidating the will, they will be disqualified from receiving any benefit from your estate.
Address liquidity constraints. Before any distributions can be made to your heirs, all liabilities – both before and after death – have to be paid. Ensure you have sufficient funds to settle your debts, and consider the consequences if funds are not available.
If there are no alternatives, assets will have to be sold from the estate, or heirs will have to have to use their own funds to settle outstanding debts.
Remember, if you have policies and investments with a beneficiary nomination, these funds will pay directly to the beneficiary, regardless of your will. Worthwhile to consider seeing as these funds might prove useful in ensuring liquidity in your estate.
With retirement funds, although a beneficiary nomination is recorded, the Trustees of the fund still has the last say as to whom the funds are to be paid. Various factors such as number of dependants, age of the dependants, etc, is taken into account in order to determine payment to a beneficiary.
Business legacy planning
If you are a business owner, estate planning takes on an even more important dimension, far beyond the crucial element of leaving a Will. Your business may be the only income your family has, and if you pass away, they may have to try to manage a business with no previous experience.
Have a conversation with your spouse, heirs and business partners about their expectation of the business after your death. Ensure you have a person who will be able to, and agrees to, take over your business.
If you have business partners, draft a buy-and-sell agreement, ensuring your co-shareholders are in a financial position to take over your share of the business when you pass away, and vice versa.
Ensure you have a trusted legal or financial adviser, who knows your business and will be able to, and agrees to, assist your family should anything happen to you.
Draft a shareholder’s agreement to deal with situations of conflict between shareholders and the situation of shareholders wanting or needing to sell their shares in the company.
Your social-media legacy
It’s also important to consider your social media and digital legacy. The solution is a Social Media and Digital Assets Will.
In South African law at present there is no inherent right to privacy after your death. However, most social-media sites and online service providers will not grant another person access to your account or its content after your demise, barring compelling and unusual circumstances as well as a court order.
Facebook, for instance allows your account to be “memorialized”, where your Facebook page remains active for friends and family to post on and visit. During your life, you nominate a “legacy contact” via a setting on Facebook, who then manages this page after you die. The alternative option is for your account to be closed and deleted by request of a family member, after certain proof has been provided.
Whether or not you wish your legacy to continue on social media, nominate a digital executor in your Social Media and Digital Assets Will and provide them with your login details for sites where your data is stored. These details should be stored in a safe or in a reputable digital vault.
Also stipulate that your digital executor should be given a copy of your death certificate, as this will be required for most actions.
Securing your legacy means understanding all factors which may influence this – legal, financial and technological. Consider speaking to a fiduciary specialist to guide you through the dynamics of proper estate planning, and how it impacts your wishes for your family and loved ones.
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