Less than 15% of South Africans have a Will when they die

In his seminal book, The Drafting of Wills, Harry Barker concludes that “One’s Will is possibly the most important document of one’s lifetime”. This the best way of ensuring that you minimise unhappiness and conflict among your family members because there are now clear instructions on how to distribute your assets.

Given the horror stories we hear daily about family feuds over a deceased’s assets, one would think that most people would conclude their Wills in a hurry. Shockingly, statistics obtained in 2022 from the Master of the High Court of South Africa show that less than 15% of South Africans have a Will when they die.

We all want our family members and loved ones to be cared for when we are no longer alive. Sadly, our best intentions are often lost in translation.

The topic of estate planning is often avoided and perhaps it is because we do not want to deal with the thought of death. Estate planning is, however, a vital part of good financial planning because it forms the basis of the legacy we would like to leave through our Will.

What is estate planning?

Investopedia defines estate planning as “the preparation of tasks that serve to manage an individual's asset base in the event of their incapacitation or death”. The estate planning process generally starts with the drafting of a Will.

In a case where there is a Will in place, we often find that drafting and planning mistakes can either render it impractical for specific provisions to be carried out or, worse still, for the laws of Intestacy (Intestate Succession Act 81 of 1987, pre-determines the heirs) to apply. This can lead to unintended and lengthy consequences, to the detriment of loved ones left behind.

Steps to take to preserve your legacy

To ensure that your legacy is not lost in translation, you must take a more considered approach to your estate and financial plans. You need to understand the legislative directives and implications and have a valid, signed Will in place.

- The first step is to consider a financial plan carefully. Your plan is critical in mapping your financial journey and the best way to get there. You also need to pre-determine the future financial needs of your family and loved ones.

- By drafting a Will, you can be assured that your beneficiaries reap the rewards of your life’s work and that it will be distributed, protected and managed according to your wishes. Your circumstances may change; therefore, we advise you to revise your Will at least once a year or when you experience a significant life-changing or financial event.

- Estate planning ensures that your inheritance will be managed and fulfilled according to your wishes. A carefully considered estate plan results in the family’s wealth being preserved and shared across generations. By embarking on this process, you will also be able to ascertain whether or not your chosen heirs are prepared to take over this responsibility.

What to consider when doing an estate plan

1. Your marital regime, including your marital status and nuptial contract, impacts your estate plan. Your marital regime can limit your estate plan, so you must carefully consider the consequences of your marital status. Understanding your marital regime’s impact will allow you the opportunity to plan carefully for death’s consequences.

2. Consider the objectives and needs of your beneficiaries carefully and link that to the role you play from a maintenance perspective and costs related to the estate. This could include:

a. the funding of children’s education;
b. replacement of income of your spouse; and/or
c. estate administrative cost, taxes and liabilities.

The age of the beneficiaries also plays a crucial role. A minor’s inheritance (under 18 years old) should preferably be placed in a testamentary trust. One should consider whether the capital and/or income is released when the minor reaches the age of majority or at a specific age thereafter. If no provision is made to create a trust, the inheritance is paid to the Guardian’s Fund (which is administrated by the government) and released to the beneficiary at the age of 18 years.

3. When it comes to your business, succession planning is essential and may reduce the angst of deciding who will inherit the family business. Not only will this result in the company’s wealth being preserved but in a smoother transition of ownership and management.

a. The proper structure, wording, signing and other legal requirements around a Will are all points a professional specialist knows to guide you on to ensure that your last wishes will be legally executable.

Given all of the above and many other reasons, it is clear that proper estate planning and the professional drafting of one’s Will is indeed one of the most important plans of one’s life.

Are your instructions clear and does your plan make sufficient provision for your loved ones, or will your final wishes be lost in translation? Contact your trusted financial adviser for a fiduciary specialist today. Knowledge is power, especially when used wisely.