Dying without carefully preparing a Last Will and Testament that specifically outlines who should inherit your belongings, causes unnecessary distress at an already difficult time for your family and friends. The absence of a Will also means that the law will decide who gets what, and how much.
Jeremy Woods, Manager, Fiduciary Services at GTC’s Johannesburg offices, urges individuals to make preparing a Last Will and Testament one of their New Year’s resolutions for 2018, to avoid any undue stress and confusion.
“The Act according to South African law which controls how your assets are transferred is the Intestate Succession Act, 81 of 1987,” says Woods. “If a person dies without a Will in SA, it means that the deceased has died ‘intestate’.”
He cautions that if an individual dies without a Will, family members have to nominate an official Executor (administrator) to manage the intestate estate, and this person (who is required to be qualified) must first be accepted by the Master of the High Court – a lengthy process at best. More importantly, a bond of security for the full value of an intestate Estate needs to be provided by the Executor that is finally appointed.
A bond of security is a guarantee, for the full value of the Estate, required by the High Court and provided by the appointed Executor.
“While this can be done by an attorney, it comes at a significant additional cost, which is yet another unnecessary burden for your loved ones,” says Woods.
Of greater concern is that if a person has died intestate, Woods says that the Act outlines a specific method that is followed to determine who inherits your belongings. According to the intestate law a surviving spouse, in some instances, can only get a ‘child’s share’ of the total inheritance.
“There are numerous examples of the problems caused by this intestate ‘child’s share’ issue,” Woods explains. “One of the tragic scenarios that we have seen play out on a number of occasions concerns a married couple living in their family home, thinking that the survivor of them will simply continue to live in their home when one of them has died. In this scenario, the couple had four children between them and no Will. Imagine the surprise and pain when the surviving spouse found out that she/he had to vacate the home because it had to be sold and divided equally between the survivor and all the children, who rightfully demanded their share of the estate value after expenses also had to be met?”
He adds that this equal share of proceeds to spouse and children could also create concern if the value of the Estate is large. The following scenario is another one of the many seen by Woods.
“If proceeds are shared equally between the surviving spouse and, say, four children for example, not only would the entire estate be divided into five equal parts, but the proceeds which are inherited by the children will be subject to a 20% Estate Duty, once again causing enormous hardship for the surviving spouse,” he says.
By preparing a Will now, individuals will ensure that their assets are appropriately allocated to loved ones, in accordance with their true wishes and also ensure that Estate Taxes are legally avoided or minimised wherever possible.
“Freedom of Testation is one of the wonderful freedoms provided for individuals in South Africa. Forced inheritance only occurs when you have no Will or when it has been improperly drafted.
“Don’t waste this freedom. Make it one of your 2018 resolutions to prepare your Last Will and Testament. Doing testamentary planning and having a properly drafted Will prevents unnecessary conflict, confusion and despair amongst family members and loved ones,” Woods says.