Why Should I Have a Will?
September 7th, 2010 Filed under: Estate Planning — Estate Planning Author
The longer I spend time in the Financial Services industry, the more I see certain issues that are prevalent.
One of them is the fact that you really should have a will if you die in South Africa.
One of my personal experiences with this comes from a brother that died without a will. Leaving behind an ex-wife, a common law spouse and 3 children. His view was that he would leave those left behind to fight it out.
And what do you think happened…?
Inevitably, those left behind have ties to the person that may or may not be the reality, but it is their perception. Which means they will fight to protect their perception.
So, this is one issue…the emotive.
Whilst in a period of grief, the “small” issues simply get bigger. Rather, leave happiness that you are in a good place behind(hopefully), than leave anger behind.
Another issue is what actually happens when you die without a will, or with a will for that matter?
To give you an idea (please note that this is not a legal opinion), should you die without a valid will in South Africa you are regarded as dying intestate.This means that the law of intestate succession is applicable.
An example under the law of intestate succession:
A couple that are living together in a permanent relationship are regarded as spouses. So, if neither party in this union had any descendants (e.g.children), and one of the partners dies leaving no descendants only the spouse…the surviving spouse would inherit the entire intestate estate.This could cause problems with the remaining family, etc. As well as perhaps not being the intention of the deceased. The will would stipulate who is to inherit what and this would remove the “uncertainty” of having no will.
One can therefore see that having a will is the way to go (pardon the pun).
Unless, you are the spouse inheriting the whole estate in the above scenario and that was not the deceased’s intention.
So, lets assume that you now have a will and you die. What happens then?
The executor would attempt to settle your estate in the manner that you wanted. However, there are issues here…what if your estate cannot be properly settled as there is no liquidity in your estate. e.g. you leave a house to someone, but you have liabilities that need to be settled and have not arranged for this. The house could be sold to accommodate the liabilities. In essence, the intentions of your will are not able to be carried out.
So, contrary to popular belief…when you draw up a will, make sure that someone qualified to look at the requirements of your estate does so.
This does not have to be a huge exercise, simply a look at your assets and liabilities and your intentions on death and determining whether you have your estate planned in a way that your intentions can happen. Look carefully at how you nominate beneficiaries on your life policies…it is best to let the estate settle itself. As opposed to, the executor having to ask policy beneficiaries for money to settle the estate.
If you have drawn up a will without being questioned regards your assets and liabilities…be careful.
Kenny Williamson is a financial planner in Cape Town, South Africa. His main areas areas of interest are life risk planning and Health Insurance/ medical aid. You can learn more from his site http://www.businessowner-cover.com.
