The thought of your death, let alone planning its consequences, can be an uncomfortable and overwhelming exercise. As a result, many people are reluctant to conclude a will, thereby overlooking the importance of careful estate planning. This is evident from the fact that the Master of the High Court, whose office is responsible for administration of deceased estates, has stated that a large number of reported estates are not governed by a valid will. However, with proper and professional estate planning, which includes the drafting of a valid will, we can change this unfortunate narrative.
- What is a will and why is it important:
A will is a legal document in terms of which a person records and outlines how they wish their estate to be distributed after their death.
As daunting as it is to think about our inevitable demise, a will is an important tool in planning our estate and protecting the interests of our loved ones, especially minor children.
A few benefits of concluding a will include:
- Legal certainty and peace of mind;
- Nomination of a trustworthy and reliable Executor;
- Avoidance of unnecessary delays and expenses in the administration process;
- Prevention of confusion and family feuds; and
- Protection of the interests of minor children.
- What happens if you pass away without leaving a valid will:
South African law recognises the concept of “freedom of testation.” This means that every person has the freedom to decide what assets are distributed to whom upon their death. These wishes are expressed and recorded in a will. However, if you pass away without leaving a valid will, you forgo the opportunity to exercise this freedom of choice.
Below are a few practical examples of the challenges that may be encountered in the absence of a valid will.
3.1. Identification of heirs:
Your estate will be distributed to your nearest blood relations in predetermined shares, in accordance with the Intestate Succession Act 81 of 1987. Practically speaking, this means that the law will determine who your heirs are and in what proportion each heir will inherit from your estate.
Practical example: You are unmarried and have three children, namely: A, B and C. It is your intention that only children A and B should inherit from your estate.
Your intention will be honoured if this is reduced to writing in your will, meaning that children A and B will each inherit a ½ (half) share of your estate.
However, if you pass away without leaving a valid will, your intention is not recorded and therefore cannot be honoured. The law of intestate succession will then apply, in accordance with which all three of your children must inherit your estate in equal shares. This means that A, B and C will each inherit a one-third share of your estate.
3.2. Beneficiaries who are minor children:
In the absence of other recorded instructions, an inheritance due to a minor child is payable into the Guardian’s Fund, and will be held there until the minor child reaches the age of majority. The Guardian’s Fund is administered by the Master of the High Court.
Practical example: You are unmarried and have three children, namely: A, B and C. However, C is still a minor of 10 years at the time of your death. It is your intention that any inheritance due to a minor child be held in a testamentary trust or be paid over to the child’s guardian.
Your intention can be honoured if this is specified in writing in your will. This means that, upon distribution of the estate to your children, A and B will receive their inheritances. However, C’s inheritance will be held in trust until he or she reaches a certain age, or will be paid over to their guardian.
However, if you pass away without a valid will, this intention will be recorded and therefore cannot be honoured. C’s inheritance will, unfortunately, have to be paid over to the Guardian’s Fund. C’s guardian will not have direct access to the child’s funds for maintenance purposes, and payment of any claims made to the Guardian’s Fund can be a tardy and frustrating process.
3.3. Nomination of an Executor:
An Executor is the person who will handle your affairs upon your death. Their main duties include: reporting the estate to the Master of the High Court, collection of assets and settling of liabilities, drafting the Liquidation & Distribution Account, and distributing the estate to the rightful beneficiaries.
Practical example: You are unmarried and have three children, namely: A, B and C. It is your intention that your friend, X, who is an experienced attorney, be appointed as the Executor of your estate.
Your intention can be honoured if you have named X as your Executor in your will. This means that upon your passing away, the Master of the High Court will be required to appoint X as the Executor of your estate.
However, if you pass away without a valid will, your intention will be unknown and therefore it cannot be honoured. Your children, A, B and C, will then be required to come to an agreement and nominate an individual to be the Executor in your estate. This often leads to disputes between the heirs, as well as significant time delays in the administration process.
3.4. Bond of Security may have to be furnished to the Master of the High Court:
If an Executor is nominated who is not your parent, spouse or child, he or she will be required to furnish the Master with a Bond of Security equivalent to the value of the assets in your estate, before the Master will appoint them as the Executor. It is important to note that obtaining a Bond of Security can be a lengthy and onerous process, resulting in time delays in the administration process.
Practical example: It is your intention that your friend, X, who is an experienced attorney, be appointed as the Executor of your estate. However, as X is not your parent, spouse or child, X will be obliged to furnish a Bond of Security unless you state your wish that the Master dispense with the requirement for a Bond of Security. The value of your estate is 1 (one) million Rand.
Your intention can be honoured if the above is reduced to writing in your will. This means that upon your death, the Master of the High Court will be required to appoint X as the Executor of your estate without requiring a Bond of Security of 1 (one) million Rand.
However, if you pass away without a valid will, your intention will be unknown, and therefore it cannot be honoured. This means that, should your heirs nominate X as executor, he or she will be required to furnish the Master with a Bond of Security for the value of 1 (one) million Rand before their appointment as the Executor of your estate.
- Legal requirements for a valid will:
In order for your will to be legally valid, it must be in writing. In addition, the Wills Act 7 of 1953 specifically requires you to sign each page of your will, in the presence of two competent witnesses, who must in turn also sign your will. In other words, all three of you must sing the will at the same time in each other’s presence.
Once signed, it is imperative that your will be stored in a safe place. This is because, upon your passing away, the original will must be submitted to the Master of the High Court, in order for the Master to ensure that your estate is administered in accordance therewith. Therefore, if your original will has been misplaced or inadvertently destroyed, your estate will devolve intestate, as explained above.
- Amending and updating your will:
It is reassuring to know that you can amend your will at any time before your death, provided that you possess the necessary mental capacity to do so. It is advisable to review your will on an annual basis, and to update it as and when your circumstances change, which may include inter alia: a change in marital status, the birth of children, the acquisition of larger assets such as immovable property, and the death of one of your nominated beneficiaries.
- Living Wills:
Should you or a loved one be faced with a life-threatening medical condition, the existence of a Living Will is beneficial. A Living Will is a document in terms of which a person provides their family and/or medical practitioner with the consent to terminate the use of life-support or similar medical intervention should they suffer from a terminal illness with no prospects of recovery. You may include wishes relating to funeral directives and organ donation in your Living Will.
Although not legally recognised in South Africa, nor legally binding on your family and/or medical practitioner, a Living Will provides your family and/or medical practitioner with a sense of comfort and guidance in that your wishes are made known to them. This will place them in good stead to make these difficult decisions relating to your medical treatment. It will also provide them with guidance when making decisions on the financial pressure of continued life-support and other medical-related expenses.
As highlighted above, concluding a valid will forms a crucial part of your larger estate plan. Should you die without a valid Will, this will result in damaging consequences for your loved ones, as well as making the administration of your estate more difficult.