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Category Life Insurance

To have and to hold a signed Will

08 September 2021 Jocelyn Manda, Fiduciary Specialist at PPS Fiduciary Services

National Wills Week will be held from 13 to 17 September 2021. This is an ideal opportunity to draft a Will or to review an existing Will. In recent times, we have come to realise that death can happen to anyone, at any time. Death does not discriminate against age. Whether you’re young or old it is therefore important to ensure your affairs are in order.

There are many advantages to having a valid Will in place. Some of these are:

• You decide how you would like your assets distributed
• You can ensure that a minor’s inheritance is protected in a trust until they attain a specified age
• You can nominate a guardian for a minor child
• You can nominate an executor to administer your estate on death
• You can nominate a trustee to administer a testamentary trust
• You can protect your beneficiaries’ inheritances from forming part of a joint estate with their spouse
• You can structure the Will in a tax efficient manner

The process involved in taking instructions for the drafting of a Will is quite detailed. The discussion goes beyond simply knowing a client’s intentions for the distribution of his estate. Some important considerations are listed below:

• A planner will need to analyse the liquidity in an estate and plan how liabilities, estate administration fees and taxes will be settled.
• How does the type of marriage affect the distribution of assets in the Will.
• Maintenance obligations resting against a client do not automatically fall away on death. One must therefore plan ahead and ensure that these obligations can still be met
• Although an inter vivos trust is separate from a Will, a planner must take the terms and conditions of the Trust Deed into consideration, especially if the trust is to become a beneficiary in the Will.
• If there is a loan account outstanding in an inter vivos trust, in favour of the client, what are the implications when the client dies and how does this affect the estate
• Succession planning for a client whose business entity is also part of the discussion.
• You will need to ascertain whether a beneficiary can afford to take care of an asset bequeathed to him/her in a Will, and if not, what measures can you put in place.
• In recent times, executors have experienced unforeseen delays in the administration of a deceased estate. Beneficiaries only receive their inheritance at the end of the estate administration process. A client must therefore put measures in place to ensure that their dependents’ needs are still met, without having to wait for the finalisation of the estate.

In the case of Raubenheimer v Raubenheimer and Others (560/2011) [2012] ZASCA 97, the Supreme Court of Appeal stated: “It is a never-ending source of amazement that so many people rely on untrained advisors when preparing their Wills, one of the most important documents they are ever likely to sign”.

The court also stated: “…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”.

Having a discussion with a professional adviser is therefore vitally important. A professional adviser will also ensure that the provisions required for the correct signing of a Will is adhered to.

Quick Polls

QUESTION

As National Treasury mulls a two-bucket retirement system, mandatory contributions and preservation, regulation 28 is being amended to allow up to 40% of retirement fund assets to be invested in SA-based infrastructure… Which of the following retirement fund ‘tweaks’ would you consider most beneficial to your clients?

ANSWER

Give fund members emergency access to retirement savings
Let fund members invest 40% in infrastructure
Let fund members invest 40% offshore
Mandatory preservation when resigning from a fund
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