Jocelyn Manda, PPS Fiduciary Specialist
Many South Africans are under the misconception that death happens to other people and that it will be a long time before it happens to them.
This approach leaves personal matters ‘hanging in the air’, without a clear-cut plan in place as to what should happen regarding personal affairs when they are no longer alive. A well-drafted Will means your voice will be heard from beyond the grave. There are some who think that downloading a template, filling it out and signing it is sufficient. This is not an advisable route to follow as too many things could be left to chance. Drafting a Will should be part of a well-thought-out estate plan that is put in place with the assistance of specialist advisors.
The Supreme Court of Appeal commented on this situation when it delivered a verdict in the case of Raubenheimer v Raubenheimer and Others (560/2011)  ZASCA 97. The verdict reads: “It is a never-ending source of amazement that so many people rely on untrained advisers when preparing their Wills, one of the most important documents they are ever likely to sign” and continues to say that “…the courts continue all too often to be called on to deal with disputed Wills which are the product of shoddy drafting or incompetent advice”.
Dying without a Will
A common belief is: “When I die, my partner or spouse will automatically be entitled to my assets.” This is not true. If you die without a Will, the Intestate Succession Act 81 of 1987, determines who will inherit your assets and in what proportion. The distribution may not be what you wanted and people you never intended to inherit may become your heirs.
Where clients have an advisor, it is up to the advisor to engage the services of a professional to draft their client’s Will, ensuring all loopholes and gaps are identified and avoided to ensure a smooth transfer of assets to beneficiaries. To derive the maximum legacy for your client and their beneficiaries the professional will ensure that the Will is drafted in the most cost and tax-efficient way possible.
Choosing an Executor
The Administration of Deceased Estates Act 66 of 1965 aims to formalise the role of an executor and sets out the process required to administer a deceased estate. When you die, the executor steps into your shoes, takes control of your estate, settles your liabilities, and ensures all your other legal obligations are met before distributing your estate to your beneficiaries. The Master of the High Court appoints the executor who is a person familiar with the estate administration process with experience in administering an estate as well as the necessary qualifications to fulfil the role.
It is vital that you nominate the right executor in your Will. Remember, the executor is the person who carries out your instructions to leave the legacy you envisaged. So, make a wise choice.
What happens to a minor’s inheritance if I die without a Will?
A minor is a child under the age of 18 years and lacks legal capacity. If you die without a Will, the inheritance of a minor is paid in cash to the Guardians Fund of the Master of the High Court and is invested with the Public Investment Commission, which is managed by a government-owned company. For many years, reports have emerged that the Guardian’s Fund has been subjected to theft, fraud, and corruption, thereby compromising the security of the inheritance.
According to the annual report for the 2021/2022 financial year, the rate of interest within the Guardian’s Fund was 4,25%. The minor has access to the interest for maintenance, education, and other expenses. Capital up to R250,000 can be paid from the fund to supplement the interest payout. In our present economy, the growing cost of living is so high that access to sufficient cash from the Fund may be limited.
The inheritance is held in the Guardian’s Fund until the beneficiary attains the age of 18 years. The question is: Will my child be mature and responsible enough to handle the inheritance at that age?
We are Clear About Service
- Mobile Service: My Glass comes to you, offering convenient on-site solutions
- Versatility: Not just vehicle glass. My Glass also specializes in building glass repairs and replacements
- Custom claims management: Experience seamless incident reporting with My Glass Bordereau, our bespoke online claims management system
- Extensive stock: My Glass boasts the widest range of available stock, ensuring prompt service.
How else can I protect a minor’s inheritance?
Your Will can make provision for the formation of a testamentary trust for a minor when you die. If the child is still under the age of 18 years at the time of your death, the executor will distribute the inheritance in accordance with the Will to a testamentary trust. In the Will, you can direct that the minor has access to money for his maintenance and general well-being. Unlike the Guardian’s Fund, distributions from the trust capital are not capped.
Unlike the Guardians Fund, your Will can stipulate the age of the beneficiary when the trust terminates. It should preferably be an age when you feel the beneficiary would be mature enough to manage the inheritance on their own. You can change the stipulations by revising your Will from time to time.
In a Will, your voice can be heard from the grave. It speaks on your behalf when you are unable to.
Who will manage the Testamentary trust?
You can nominate a Trustee in your Will. The role of the trustee is to preserve, protect and administer the inheritance on behalf of a minor. Trustees choose the investments best suited to the trust and which yield high returns and cater for capital growth. Proper accounting records mean that there is transparency in how the trust is being administered. Trustees ensure tax compliance and attend to payments for the minor. When you draft a Will, nominate a Trustee who will best fulfill the duties.
Nominate a Guardian
You can nominate a guardian for your minor child in your Will. A guardian is responsible for the care, development, and well-being of the child. Nominating a guardian in the Will provides guidance to family left behind as to who you intended to take up this responsibility. Without a Will in place, it can lead to much confusion and disagreements among family members, to the potential detriment of your minor child.
Review your Will periodically
Once you draft a Will, make sure it is signed correctly and stored in a safe place. But this is not where it should end. You must at least review your Will annually to ensure that it is still how you want your estate distributed. Life changes like marriage, divorce, birth, or death of a loved one are some reasons why a Will should be reviewed.
For example, if you nominated your spouse as a beneficiary in your Will, he/she will not inherit if you die within three months of divorce. If you die after three months of divorce, your former spouse will inherit if you have not amended the Will. A professional will advise you to review the Will as soon as you know that there is a pending divorce to prevent unintended consequences.
Leave your legacy or that of your client the right way, by engaging the expertise of a professional to draft the Will. You will have peace of mind knowing that your/ your client’s affairs are in order and loved ones will be cared for.