Estate planning is one of those things that often fall by the wayside. We all know that drafting a will is something we should do, but we often find ourselves thinking, “I’ll sort that out another day; there’s plenty of time….”
It may seem morbid or depressing to think about death, but the fact is if you leave it too long to sort out your affairs, you might very well end up running out of time to get everything organised and your affairs/estate in order.
Although the law has planned for this possibility in the form of the Intestate Succession Act 81 of 1987 (which provides for matters related to intestate succession), if someone dies without a valid will, it is not advisable to fall back on this as its one-size-fits-all approach may not be what you had in mind at all.
Now during lockdown may be just the time and space you need to discuss this with your spouse, or significant other; or simply to consider how you want your estate to devolve.
Some examples of the pitfalls of dying without a valid will (or failing to update it when your situation changes) are:
1. If you have prepared a will but it does not comply with the formalities for wills set out in the Wills Act 7 of 1953, your will is not valid and the Master of the High Court, who oversees the administration of deceased estates, cannot accept it as your final will and testament. Your descendants can apply to court to have a non-compliant will condoned, but this is a lengthy and potentially expensive process.
It is far simpler to ensure that your will complies with the formalities, namely:
- The testator (the person making the will) must be over the age of sixteen;
- The will must be in writing but it can be either typed or handwritten. If the will is handwritten, the person who writes the will is not allowed to be mentioned as a beneficiary;
- Each and every page of the will, including the last page, must be signed by the testator and by two competent witnesses of at least fourteen years of age. The testator and witnesses must all sign in front of each other. Witnesses should not be beneficiaries in terms of the will.
2. When you draft a will, you have the choice as to who will benefit. You can choose friends, family members or even organisations such as charities or universities as your beneficiaries and heirs. You can even use your will (or a letter of wishes) to leave specific items such as jewellery, furniture or other assets to particular beneficiaries.
However, if your estate is distributed in terms of the Intestate Succession Act, a standard formula is followed to determine your heirs. The formula is as follows:
- If you are survived by a spouse and no children, the spouse will inherit your entire estate.
- If you are survived by your children and no spouse, then your children will inherit your entire estate in equal shares.
- If you are survived by your spouse and your children, your estate is divided by the number of children you have plus one. If the amount of each share is less than the amount set by the Minister (currently R250 000), your spouse will get R250 000. If the amount is more, your spouse and each child will each get an equal share.
- If you are survived by both of your parents, each parent will inherit half of your estate.
- If you are survived by one parent, that parent receives a half share and the deceased parent’s half share is shared between that parent’s descendants (i.e. your siblings through that parent) or, if the deceased parent does not have any living descendants, the inheritance will revert to the surviving parent.
- If you have no living spouse, children, parents or siblings, then other blood relatives will inherit your estate in the order set out in the Act.
While the formula allows for distribution to your closest family by blood (and adoption), it does take away the element of choice which many people find important in deciding how they want their estate to be distributed.
3. Drafting a will allows you to nominate an executor (or executors), who will handle the administration of your estate, with the assistance of a professional such as an attorney or accountant where necessary. Your chosen executor is known as an executor testamentary. If you die without a will, the Master of the High Court will appoint what is known as an executor dative. The Master will often request that a deceased person’s family nominate a family member or professional to take up the position, but ultimately the Master has discretion whether or not to accept the person nominated by the family and may also choose to appoint additional joint executors.
Unfortunately, this process can add to the delays that are likely to arise in finalising an intestate estate, which risks putting your family in a difficult and uncertain financial position.
4. While it is a key part of financial and estate planning to ensure that you have a valid and up-to-date will in place, it is particularly important if you fit into one or more of the following categories:
- If you have children under the age of 18 and want to avoid their share of your estate being managed by the Guardians Fund;
- If you own your own business;
- If you own assets or property in more than one country;
- If you are living with a partner but are not married;
- If you are married in community of property (since this creates a joint estate which must be administered as one); and
- If you have divorced your spouse. (Note that the Wills Act presumes that you intended to disinherit an ex-spouse if you die within 3 months of the divorce without changing your will, but if you fail to make the change after that window, your ex-spouse will inherit in terms of the will.)
Having a will drafted for you and updating it periodically when there are major changes in your life is a relatively simple and inexpensive process. Most importantly, it can allow you to control how your estate is distributed and assist in ensuring that your family is protected from unnecessary delays in the process of administering and finalising your estate.
Author: Katherine Timoney, Associate, Gillan & Veldhuizen Attorneys: BA (LLB) LLM (University of Cape Town)