October 12, 2022
Your Will Can’t Wait: The Tragic Case of a Mother Who Took Too Long
“We are such stuff / As dreams are made on, and our little life / Is rounded with a sleep.” (Shakespeare)
We aren’t comfortable thinking about our mortality, but death comes to all of us and it is our loved ones who will suffer if we don’t make plans to look after them whilst we still can.
First prize here will always be a full estate planning exercise, but at the very least put a will in place. There is no other way of ensuring that your loved ones’ interests are protected, that they inherit what you want them to inherit, and that your estate is wound up by an executor you trust to act with integrity and professionalism.
Formalities rule
Make sure that your will is a proper and valid one, professionally drawn in accordance with all the required legal formalities.
As we shall see below, our courts have only a limited ability to help out when requirements aren’t fully complied with, and that can be disastrous for your dependants.
A dying mother’s instruction to draw a will – too little, too late
A tragic High Court case from 2021 illustrates the dangers of delay –
- Dying of terminal cancer, a mother filled out a bank form headed “Will Application / Aansoek om testament”. In it she gave the bank instructions to draw her will.
- Her intentions were laid out clearly in the document – to leave everything to her minor child.
- Unfortunately she died the next day, before her will was drawn and signed. Her husband claimed that she had accordingly died “intestate” (without a valid will) leaving him to inherit a full “child’s share” with a minimum of R250,000. As their marriage was in community of property, the husband was already a 50% owner of all the marital assets, and this estate not being a large one the practical effect appears to be that he would likely inherit everything, and the child would get nothing.
- A group of relatives, trying to give effect to the mother’s wishes and to protect the child’s interests, asked the High Court to accept the bank’s instruction document as a valid will in terms of a section in the Wills Act which provides that: “If a court is satisfied that a document or the amendment of a document drafted or executed by a person who has died since the drafting or execution thereof, was intended to be his will or an amendment of his will, the court shall order the Master to accept that document, or that document as amended, for the purposes of the Administration of Estates Act, 1965 (Act 66 of 1965), as a will, although it does not comply with all the formalities for the execution or amendment of wills referred to in subsection (1).” (Emphasis supplied).
A cruel twist of fate
There was no doubt here that the bank form correctly set out the mother’s wishes. But there was a fatal problem – as the Court put it “…the content of the document in issue and the circumstances surrounding its execution indicate clearly that the deceased did not intend it to be anything other than a drafting instruction. There is nothing to support the contention that the deceased intended the document to be her will; everything points to the contrary.”
The form could therefore not be accepted as a valid will, and the child is left with little or nothing other than the Court’s expressed hope that the husband would if practicable “honour his late wife’s declared wishes regardless of the fact that due to a cruel twist of fate [the child] did not end up being entrenched in a will as she had intended.”
Without a doubt the Court would have come to the child’s assistance if it could have, but the clear wording of the Wills Act left it unable to do so.
Make a will – now!
None of us knows when Death will come knocking at our door. If you don’t already have a valid, updated will in place, make sure that “Make a Will” or “Update my Will” is at the very top of your priority list.
Your will could well be the most important document you ever sign, so getting professional advice and assistance is an easy decision here.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
May 17, 2022
Don’t Just Leave Your Loved Ones Assets – Leave Them a Legacy!
“A Legacy Letter is a way for you to share your values, life lessons, cherished memories, hopes for your family’s future, and anything else that is really important to you.”
Estate planning is key to ensuring that your loved ones are properly catered for after you are gone. Ideally go beyond the practical and financial issues and also leave something personal, something of yourself.
Follow these three simple steps to ensure that you don’t just leave behind assets, but also a lasting and valuable legacy –
- Firstly, leave a valid and updated will (“Last Will and Testament”). It’s the core and the foundation of your plan to protect the people you care for.
- Next, address the financial and practical aspects. Will each of your loved ones have enough to support them? Will there be enough cash in your estate to ride out the inevitable delays in winding it up? Are children and any other vulnerable family members protected? Have you taken advice on setting up trusts? Do you have enough life insurance in place? Have you left a full “Important Information File” to help your executor and your family take control of and finalise your estate?
- Now go one step further – don’t just leave an estate, leave a legacy. Read “How to Preserve Your Life’s Lessons for Future Generations” on Mission Wealth for ideas on how to share a meaningful “Legacy Letter” with your family. Follow the links in that article to “Leaving a Legacy” and “The New Way to Leave a Lasting Legacy”.
Let’s close with these words of wisdom from that article: “The golden rule of all estate planning is: Don’t wait.”
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
April 26, 2022
Don’t Accidentally Disqualify Your Chosen Heirs from Inheriting!
“Death is not the end. There remains the litigation over the estate.” (Ambrose Bierce)Your will (“Last Will and Testament”) will always be the keystone of your estate planning, and a recent High Court decision sounds yet another warning to beware the “do your own will” concept. By not having his will drawn by a professional, a father inadvertently caused one of his children to be disqualified from inheriting her intended share, whilst her husband was disqualified from being appointed as executor.
Who is disqualified from inheriting?
Our law, in the form of the Wills Act, provides that no one (or their spouse) can receive “any benefit” under a will if –- They signed it as a witness (unless it was also witnessed by two other competent people not receiving any benefit), or
- They signed it for the testator (even though in their presence and at their direction), or
- They wrote out the will or any part of it in their own handwriting.
The facts of the family fight
- In poor health and realising he needed a will, the testator had asked a friend to help him draw one. The friend produced a typed will, in terms of which each of the testator’s three children (from two different marriages) received one third of his estate. In addition a son-in-law was appointed as executor.
- The will was, said the Court, “slightly unusual” in that it included a narrative on the father’s difficulties with his third wife, but the real problem (as it turned out) came from the fact that annexed to it was a four-page typed schedule of 69 assets with spaces against each of them for insertion of the name of the child to receive that asset. Critically, those names were filled in by hand by one of the daughters – on, she said, her father’s instructions.
- The will and schedule were properly signed and witnessed, and the father died five days later.
- As is regrettably all too common when a deceased leaves behind children from more than one marriage, a fight developed between them, with a claim that the schedule of assets did not reflect the father’s wishes through either fraud or undue influence.
- The end result (much bitter dispute over facts later) the Court held that the daughter who had completed the names on the schedule by hand was disqualified from inheriting any more than her share on intestacy, and her husband was disqualified from being appointed as executor.
The bottom line
All that dispute, uncertainty and legal cost could have been avoided had the father called in a competent professional to draw his will for him (preferably long before his illness struck). Don’t make the same mistake! Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.© LawDotNews
January 31, 2022
Why Life Partners Still Need Cohabitation Agreements and Wills
“Census data of 2016 reveals that approximately 3.2 million South Africans cohabit outside of marriage and that this number is increasing steadily.” (Extract from judgment below)What happens if your life partner dies without leaving you anything in their will (“Last Will and Testament”)? Do you have the same protections as married spouses do? A lot of the media coverage around the recent Constitutional Court decision dealing with this question may have given the impression that life partners are now as fully protected as if they were in a formal marriage, but that is not so – not yet anyway. First, some background.
Protections for surviving spouses only, not for unmarried life partners
As a starting point, note that the widely-believed and persistent myth of a “common law marriage” is just that – a myth. And the hard truth is that if a life partner dies intestate (without making a will), the other cannot inherit on the same basis as can a married spouse. Nor can the surviving life partner claim maintenance from the deceased estate on the same basis as a surviving spouse can. Spouses enjoy these protections in terms of two Acts –- The “Maintenance of Surviving Spouses Act” provides for a spouse to claim maintenance from the deceased estate.
- The “Intestate Succession Act” deals with cases where a deceased spouse left no valid will and provides for a spouse to receive only a “child’s share” of the estate (in other words, to share equally with any children) – far from ideal of course if the intention was to leave them more, but a lot better than nothing.
The Court’s decision, and why life partners must still protect their positions
An unmarried man, although intending to marry his (female) partner, died before doing so. He left substantial assets but his will was outdated, leaving everything to his (since deceased) mother. The executor of his deceased estate rejected, primarily on the basis of existing law, her claims to inherit from the estate or to be granted maintenance from it. Confirming High Court declarations of constitutional invalidity, the Constitutional Court held the relevant sections of the Acts to be invalid as they stand, and ordered that they be read so as to include life partners in their protections. However there are critical limitations to bear in mind –1) The orders of invalidity aren’t in force yet.
The Court suspended the orders for 18 months (to June 2023) to give Parliament time to remedy the defects. Perhaps Parliament will move quickly on this and do the necessary before mid-2023, but perhaps it won’t. And in the meantime, your lack of protection remains.2) You will still have to prove your entitlement.
You will have to convince the executor and Master of the High Court (possibly in the face of opposition from the deceased’s other family members) that –- You were in “a permanent life partnership” (our courts apply a number of tests in assessing this),
- As partners you “undertook reciprocal duties of support” (in this case the partners were held to have been “involved in a relationship that comprised most, if not all, characteristics of a marriage”),
- For your maintenance claim, that your claim is for your “reasonable maintenance needs”, and
- For your intestate succession claim, that you have “not received an equitable share in the deceased partner’s estate”.
3) “Intestate” Succession is always second prize.
As we said above, a “child’s share” of an estate is a lot better than nothing, but if you want your partner to inherit everything, dying without a will risks prejudicing them badly. Leaving a valid will is the only way to nominate the executor of your choice, and to choose for yourself what happens to your estate on death. It could well be the most important document you ever sign.Life partners: Sign wills and a cohabitation agreement – now!
That’s a lot of uncertainty and potential for conflict and delay, and there could well be a lot at stake (in this case, some R10m worth of assets in total) but the good news is that it is all very easily avoided –- Have professional wills drawn up (or have your existing wills checked for necessary changes or updates) and
- Enter into a full cohabitation agreement recording exactly what your status is and what undertakings you make to each other. Remember there is no such thing as a “common law” marriage in South Africa – if you aren’t formally married, a cohabitation agreement is the only safe alternative.
© LawDotNews
December 17, 2021
Don’t Let Delays in the Master’s Office Leave Your Family in Financial Distress
“Someone’s sitting in the shade today because someone planted a tree a long time ago” (Warren Buffett)
Whilst the first and most important step in your estate planning is always to have in place a professionally drawn and regularly updated will (“Last Will and Testament”), there is another aspect which demands your urgent attention, particularly now…
What will your family live on while an executor is being appointed?
It is essential that you provide for your family’s ongoing financial needs during the process of winding up your estate, because all your bank accounts will be frozen as soon as the bank learns of your death, pensions and the like take time to transfer across, and your assets generally will be tied up in your estate and inaccessible to your loved ones.
The executor of your deceased estate does have the power, provided of course that your estate is solvent and has sufficient funds, to release money to your dependents and to make advances to your heirs – but only after being formally appointed. Which brings us to…
Delays in the Master’s Office are getting worse
No matter how professional and efficient your nominated executor may be, he or she is powerless to act until the local Master of the High Court (“Master’s Office”) issues the necessary “Letters of Executorship” (“Letters of Authority” in smaller estates), so applying for them is always a priority for those nominated.
The issuing process has never been a quick one, but delays have worsened substantially in the past few years with media stories abounding of major problems in Master’s Offices around the country and reports of “unprecedented backlogs” and “an almost total breakdown in services”.
The recent ransomware attack on the Department of Justice and Constitutional Development is just the latest in a litany of woes afflicting these offices – pandemic-related lockdowns, office closures and remote working, staff shortages and a surge in the number of deaths, a Special Investigating Unit investigation into allegations of misconduct and corruption in some offices (with two officials suspended so far and many others reportedly in the firing line) – the list goes on.
Nominated executors are complaining of inordinate delays in being appointed, and of extreme difficulty in communicating with Master’s Office officials by phone, email or even by personal office visits.
Here’s how to fund your loved ones in the interim
The bottom line is that you will leave your grieving family dealing with financial worries at the worst possible time if they have to wait for your chosen executor to be appointed.
You need to find another way of giving them immediate access to funds, enough to cover their living expenses and any new expenses like funeral costs.
There are a few tried and tested ways of providing this cash flow, with separate bank accounts and investments being probably the simplest and most quickly accessible options. Consider also other assets in family members’ own names, family trusts, businesses held in entities that will survive your death, and so on. Another popular choice is life/endowment policies, TFSAs (Tax Free Savings Accounts) based on a life product, living annuities and the like – be sure to nominate beneficiaries for these products otherwise they will fall into your estate and not be paid out to your loved ones direct. Be certain that your loved ones know what measures you have taken and how they can access these funds quickly and easily.
Your own situation will be unique and you need to structure everything correctly, so there is no substitute for professional advice here!
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
September 7, 2021
Estate Planning and Wills: A Checklist to Protect Your Family
“Don’t fear death, plan for it” (Anon)Amazingly, here we are in the middle of a deadly pandemic yet still some 70% – 80% of working South Africans are said to have no will in place. That’s crazy for two reasons –
- Without a will your loved ones are exposed When you die your grieving family must start learning to cope without you, don’t expose them to the added uncertainty and worry that they will face if you haven’t left in place a valid will (often referred to as a “Last Will and Testament” to distinguish it from a “Living Will”). Without a will, your estate will be wound up in accordance with our laws of “intestate succession”. You have forfeited your right (and duty) to ensure that your loved ones each receive what they need from your estate, that your children and their inheritances are properly looked after, and that your estate is wound up by someone you trust.
- Estate planning is essential Estate planning in this context is the process of arranging your financial affairs in such a way that the legacy you leave is as large and as well-structured as possible. This needn’t be overly complicated or expensive, and everyone should have their own estate plan regardless of age, health or financial position. In a nutshell you are looking to maximise assets, to reduce estate costs and the taxman’s cut, and to streamline the process of winding up your estate so your heirs are paid out as quickly as possible. No will means no estate plan, and no estate plan means unnecessary worry, cost and delay for your grieving family.
How to protect your family with a 15-point checklist
Use this checklist to make sure you provide for your family’s happiness and financial wellbeing long after you are gone –- Make a will: See above – a will is a no-brainer! The consequences of dropping the ball on this one are so serious, and it is so easy to make a proper will, that endangering your family’s security and happiness by not having one just makes no sense at all.
- Don’t Procrastinate: Procrastination is human and, when it comes to contemplating one’s own mortality, entirely understandable. But it’s not forgivable – death is inevitable, and absolutely no one, no matter how healthy or young, can assume that they will be alive tomorrow. All too often death comes without knocking, so don’t fear it – plan for it. Now.
- Beware the DIY route: As tempting as it may be, going the DIY route (online will templates are easily found) is a bit like packing your own parachute for your first jump without assistance – great if you are an expert, but for most of us getting professional help makes a great deal more sense. It’s not you but your loved ones who have to live with any mistakes you make now!
- Ensure validity: Your will to be valid must comply with all legal formalities, and although the courts have a discretion to declare a “defective” will valid that process is uncertain, slow and expensive. Rather get it right upfront.
- Avoid ambiguity and dispute: Any lack of clarity in the wording of your will is fertile ground for dispute, and our courts are regularly called upon to sort out bitter, divisive and expensive family feuds that could have been avoided with a professionally drafted will setting out clearly and concisely exactly what the deceased’s wishes and intentions were.
- Foreign assets: If you have assets in another country, you may need a foreign will as well as a South African one – ask a professional.
- Consider business continuity: If one of your assets is an operating business, or an interest in one, put a continuity plan in place so it can be carried on without interruption.
- Review your will regularly: This one is easily (and commonly) overlooked. You finally get a will in place and think “great, that’s it then”. Not so! Personal circumstances change, laws change, taxes change – diarise to review and if need be update/replace your will no less than annually.
- Choose your executor wisely: This can be make or break for your family. Choose someone you can depend on to wind up your estate quickly and professionally.
- Pay special attention to your minor children’s needs: Firstly, this is your chance to leave each of your children what they will need financially. You could split your estate in equal portions, or you may decide to differentiate based on each one’s situation and needs (a tip here to avoid a family feud – explain to everyone upfront the reason for your decision). Now is also where you nominate your choice of guardian for your minor children – don’t leave that choice to others! Ensure also that your minor children’s’ inheritances are held in trust for them, with your choice of trustees.
- Reduce costs and taxes: To maximise what your heirs receive you need to look at all the costs your deceased estate will have to pay out. A professional can guide you through the process of minimising estate duty, executor’s fees and costs (beware of false economy here – “cheap” could also be “nasty”!). Taxes – income tax and capital gains tax in particular – can take a sizeable chunk of your estate without proper planning.
- Nominate beneficiaries whenever you can: Where you are able to, nominate beneficiaries for your life policies, annuities, tax-free investments etc to ensure payout directly to chosen recipients, without all the delay inherent in the process of winding up your estate and in many instances reducing costs and taxes. Take professional advice here – different rules apply to each of these categories.
- Plan for liquidity issues. Plus, what will your family live on? You don’t want the executor to be forced to sell an asset (your house or business perhaps) that you have left to a particular heir, but that will happen if there is insufficient cash in the estate to meet the various costs and taxes of winding it up. Similarly, your bank accounts and the like will be frozen once the bank becomes aware of your death, so you need to find another way to ensure that your family has cash to live on whilst your estate is being wound up (it can be a lengthy process with all the red tape). Separate bank accounts, life policies (see above), family trusts and the like might work in your particular circumstances, but specific professional advice is key here.
- Leave your loved ones an “Important Information” file: This is critical. There are too many heartbreaking stories of grieving spouses and children floundering in a sea of confusion and worry because they have no idea where the deceased’s will is, how the estate is structured, what assets there are, what debts, how to access password-protected computers, where important documents are kept, who they should contact for help. Sometimes they are even at sea as to what assets they have in their own names. The list is endless.What should be in the file? In short, everything that your survivors might need, starting of course with details of where your will is. Put yourself in their place – what would you need to know if you were the survivor? What information and documents would make it easier for you to get on with life? Once again, professional advice and assistance will save your loved ones a mountain of trouble and concern.A last thought on this aspect – have “that conversation” with your family as soon as possible. It’s not easy but they deserve no less. Ideally bring them in at the start of your planning and the creation of your “Important Information” file. At the very least they must know about it, where it is and how to use it.
- What else? No generalised estate planning checklist can ever be comprehensive. Tailor your plan to your particular needs. Brainstorm, ideally with family and professional input, what else needs attention.
© LawDotNews
April 20, 2021
Be Prepared for The Cost of Dying
“No matter how much you’ve been warned, Death always comes without knocking” (Margaret Atwood)No one wants to contemplate their own passing, but the reality is that sooner or later it is inevitable, and particularly in these dangerous times we need always to be prepared. The loss of a loved one is always distressing. It can however be compounded by the challenge of dealing with their assets. Few people appreciate all the costs involved in settling an estate. Understanding these expenses and planning for how to deal with them can make a big difference to those left behind.
Executor’s fees and costs
Every estate must be wound up by an executor. Ensure that in your will you nominate an executor you can trust to act with integrity, professionalism and speed. An executor can charge a maximum fee of 3.5% plus VAT. That equals 4.025% of the value of the estate. Depending on the size and complexity of your estate this fee may be negotiable. The executor will also incur costs such as advertising to find any outstanding creditors, bank charges, accounting fees, conveyancing on the transfer of property and paying the fees due to the Master of the High Court. Together, these could run into tens of thousands of rands.Taxes and estate duties
The South African Revenue Service (SARS) levies 20% estate duty on the value of any estate, but there is no estate duty payable on an estate with a net value below the R3.5 million abatement (allowable deduction). Any amount above R30 million will be taxed at 25%. An estate worth R40 million will therefore have to pay estate duties of R7.8 million (R5.3 million on the first R30 million, after the R3.5 million abatement, and R2.5 million on the next R10 million). These taxes will not, however, be paid on any assets left to a surviving spouse. In that case they effectively ‘roll-over’ and will only be charged upon the spouse’s death. The estate will also have to pay capital gains tax on any assets that are sold. SARS will also conduct a final income tax assessment. In addition, South Africans need to consider that if they have assets in other parts of the world, they may be liable to pay estate taxes in those countries as well. There are double taxation agreements in place with many countries that prevent most assets from being taxed twice, but where taxes elsewhere are higher than in South Africa, the estate will still have to pay the difference. Inheritance tax in the UK, for instance, is 40%.Outstanding debt
The estate will have to settle any debt such as credit cards, loans, or bonds on property. Interest on these debts does not stop accruing when someone passes away, so it is best to deal with them as early as possible. It is most critical to consider how to handle home loans, especially if they are held over a property in which surviving family members are still living. Sometimes these individuals may not qualify to take over the bond due to their own financial position, which means that the house may have to be sold if the debt can’t be settled.Being prepared – check what cash the estate will have
Even though an estate may have sufficient assets to meet all of these expenses, it can still be a problem if it doesn’t have enough available cash. That is because the executor may have to sell assets to free up money. This not only leads to potential extra costs and taxes but can be traumatic if something like a house where a loved one is living or a car that someone needs for transport has to be disposed of. This is why it is important to prepare an estate to make sure that there is enough cash available. One way of doing this is to take out a life insurance policy that will pay cash into the estate. This will ensure that your family members aren’t left with a potentially major financial burden and face additional stress after your death. The above is of necessity just a summary of the cost considerations involved, so speak to your attorney about how your will and estate are structured and how you can plan to meet all the costs.Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
November 9, 2020
Is Your Will Valid?
“Death knocks at all doors alike” (John Dunton 1692)
Sooner or later we must leave our families to face life without us, and of course these are particularly dangerous times for us all.
Make sure that your own affairs are in order now –
- A valid will is the only sure way to protect your loved ones after you are gone.
- If you have an old will, check whether it needs updating or changing.
- Leave a file with all the important information and documents that your estate’s executor will need.
Five mistakes which can invalidate your will
The last thing you want is to leave your loved ones grappling not only with the tragedy and grief of your passing, but also with a bitter feud over the validity of your will. Avoid these mistakes in particular –
- Not complying with all the required formalities when making your will: Although our courts do have a discretion to order the Master of the High Court to accept as valid any document not complying strictly with the various required formalities (the court must be satisfied that the document “was intended to be [your] will or an amendment of [your] will” you will want to spare your loved ones all the delay, cost and risk of dispute involved in a court application.
- Not complying with formalities when changing your will: The same applies if you want to change or revoke your will. In addition, a court can declare your will to be fully or partially revoked if you did anything (such as leaving something written on your will, an action on your part, or another document) that satisfies the court of your intention to revoke the will. Again a scenario to avoid at all costs with a properly-drawn replacement will or codicil.
- Leaving any doubt as to your “testamentary capacity”: Anyone aged sixteen years or more may make a will “unless at the time of making the will he is mentally incapable of appreciating the nature and effect of his act”. Although it is up to anyone challenging your capacity to prove that you were mentally incapable at the time, there are grey areas here and our law reports are full of bitterly-fought disputes over the question of testamentary capacity. So if there is any chance at all of that sort of challenge arising ask your lawyer to advise on the best way to leave proof of your capacity at the time of signing.
- Leaving any doubt as to fraud or forgery: All too often our courts have had to decide disputes over whether the signature on a will is genuine or forged, or over allegations of fraud. Again if there is any risk of that happening, get legal advice on how to put the genuineness of your signature, and of the correctness of your will, beyond doubt.
- Leaving any doubt as to coercion or “undue influence”: As with the previous two warnings, this isn’t likely to be a danger for most people, but on the “better safe than sorry” principle don’t risk any chance of someone challenging your will with accusations that you were subjected to some form of duress (threats perhaps, anything that would cause you to act unwillingly or against your better judgment) or undue influence.
If you don’t have an updated will in place contact your attorney now – one of the commonest (and most tragic) mistakes people make is thinking “I’m too busy right now, it can wait”. It can’t!
© LawDotNews
May 21, 2020
In Times of Great Change, Make Sure Your Will is Updated!
“Death always comes without knocking” (Margaret Atwood)
Particularly in these times of pandemic, deadly infections and uncertainty, no one can ever say with any confidence that we will still be alive tomorrow, or next month, or next year.
Now more than ever having a valid and updated will in place is no luxury to be attended to “when I have the time” or “when I am older”.
The risk is that without a proper will (your “Final Will and Testament”) you die “intestate”, in which event the law and not you decides which of your heirs gets what from your estate. You have forfeited your right to ensure that your loved ones are properly looked after when you are gone. You have lost your right to decide how your assets will be distributed on your death. And you have no say in who will wind up your estate as Executor. Executing a valid will is the only way to avoid all that.
Then – just as importantly – once you have your will done and dusted, avoid the very common mistake of forgetting to update it regularly.
Nine events to trigger an update review
Don’t leave your loved ones struggling with an outdated will. Firstly diarise frequent review dates. Then keep in mind the many changes in circumstances that will require interim review –
- Times of great change in your health risk profile: The current COVID-19 pandemic exposes us all to the threat of a sudden and radical change in our health status, and that (or indeed any new diagnosis or other actual change to your risk profile) calls for an immediate review of your will. Now more than ever it has to be fully up to date.
- Marriage: Have I or any of my heirs married, re-married, changed marital regime (in or out of community of property, with our without accrual), entered into or left a life partnership or the like? Does my will tie in with my marital regime and ante-nuptial contract if any?
- Divorce: Have there been any divorces? This is vital because so many couples leave everything to their spouses. And if for example that applies to you and you divorce, you have only a three month window period within which to change your will. For three months your ex-spouse is effectively disinherited; but if you don’t change your will within that window period your ex-spouse inherits everything.
- Birth or adoption: Have there been any births or adoptions, do you have new children or grandchildren? This is particularly important if your will specifically names all heirs without a catch-all phrase that will include new children/grandchildren.
- Death: Has anyone died and if so must any specific bequests or anything else change?
- Other changes in personal circumstances: Have any of your heirs undergone a relevant change in circumstances, perhaps become more financially vulnerable for whatever reason (serious illness or motor vehicle accident causing disability, loss of bread-winner for example)?
- Changes in assets, liabilities, financial and business structures etc: Have you sold any assets named in your will, or acquired assets that you would like to bequeath specially to a particular heir or that necessitate a re-allocation of bequests? Perhaps existing assets have changed dramatically in value? What about new liabilities, such as perhaps a new bond over a property which will reduce its value to a particular beneficiary?Have you formed or deregistered any trusts or asset-holding structures? Have you started or acquired or sold a business to be earmarked for a particular beneficiary? Do you have any new assets overseas that may call for a separate foreign will?
- Executor, Trustees, Guardians: Is there any need to review your appointments of Executors, Trustees, Guardians?
- Changes in the law: Have there been any changes in relevant laws, either through legislation or new court decisions? Tax laws in particular can change unexpectedly and affect the continued suitability of your estate planning.
How to update your will
If you plan major changes to your will, consider making an entirely new one but if the changes are minor a codicil may suffice. In both cases you need to comply with important legal requirements so professional advice is critical here!
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September 20, 2019
Your Will: What You Can and Can’t Do
“Where there’s a will, I want to be in it” (Anon)
Your will (“Last Will and Testament”) is quite possibly the most important document you will ever sign. Without a properly-executed will you put your loved ones at risk of financial and emotional hardship, you forfeit your right to nominate who administers your deceased estate, and most importantly you forfeit your right to choose who inherits what from you.
But just how wide is your right to choose? Can you leave anything to anyone? Is your freedom to decide limited in any way? Must your executor blindly carry out your last wishes?
Your fundamental right to “freedom of testation”…
For centuries our common (i.e. unwritten) law has recognised “freedom of testation” as a basic principle, subject only to being balanced against a restricted list of specific limitations.
Moreover our courts have confirmed that this freedom is supported by our Constitution. To quote the Supreme Court of Appeal (SCA): “The right to dignity allows the living, and the dying, the peace of mind of knowing that their last wishes would be respected after they have passed away.”
…and the limits
Even as far back as Roman times there were limits to freedom of testation, and these have grown over time to incorporate the following general principles against which your will’s validity can be tested –
- You cannot have anything in your will that is illegal, immoral, or “against public policy”, or impossible to fulfil, or so vague as to be unenforceable.
- Legal obligations for maintenance of dependants and of your “surviving spouse” (where he/she qualifies) will generally take preference over bequests.
- How you were married could well be relevant. Thus if you were married out of community of property with the accrual system, your surviving spouse may have a claim against your estate for half of the combined increase in the value of your separate estates during the marriage (specific rules apply).
- Courts also have a variety of other statutory powers such as the power to alter trust provisions and to remove or modify restrictions on immovable property.
- Pension and retirement fund benefits may not be paid out to your nominee – the fund’s administrators must first identify any dependants with possible claims on them.
- Constitutionality: Your bequests also stand to be tested against our Constitution. Thus in 2010 the SCA removed a discriminatory clause in an educational fund bequest open only to “European girls born of British South African or Dutch South African parents”, commenting that “In the public sphere there can be no question that racially discriminatory testamentary dispositions will not pass constitutional muster” (emphasis added). Similarly in 2006 the High Court struck down provisions in a will limiting a bursary fund to white non-Jewish males.
On the other hand, the SCA in a 2018 judgment upheld a private trust’s provisions benefitting only the deceased’s biological descendants to the exclusion of two adopted grandchildren. “There is much to be said for public trusts being judged more strictly than private trusts”, said the Court, noting that the public nature of the bequests in the earlier judgments was “a determining factor in the weighing up process in those specific cases.” Note that the particular facts of that case also played a part in the Court’s decision, so adopted children and grandchildren might well succeed in different circumstances.
Clearly, there will always be a balancing act in play here because, as we saw above, freedom of testation is itself regarded as a constitutional right.
Critical: A well-drawn and valid will
The last thing your grieving loved ones will need is a long and bitter court battle over whether your will is valid – or over any areas of uncertainty or dispute.
Bear in mind that of necessity the list above is only a brief summary of the legal principles involved – there are many “ifs and buts”, grey areas (such as the balancing act referred to above in regard to the question of constitutionality), and considerations beyond the scope of this article.
That’s why there can be no substitute here for legal advice specific to your circumstances. Have your attorney draw your will for you (or check it if you already have a will). It must be properly drawn, it must correctly and clearly reflect your wishes, it must be validly executed – and it must pass muster when tested as above!
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
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