It’s not nice to think about death and no-one wants to start that conversation with a loved one. But why not? Surely you would want the best for your family after you die. Having the conversations, taking the time to plan, and doing the necessary admin is all part of the process to make things as easy for your family as possible once you have passed on. That’s why you need a Will in place; to ensure that your plans actually come to fruition and that your family aren’t left with the burden of unnecessary admin.
70% of South Africans die without a will, leaving their families to deal with a great amount of unnecessary administration, while grieving.
What is a Will?
So for us laymen who don’t understand the legal jargon out there, a Will ls simply the legal document that states what should happen to all your money and possessions once you die. It’s formally known as one’s Last Will & Testament but generally abbreviated to just “Will”.
Think about your family and dependants and how you would like to divide your investments, property, life insurance, etc. For some it’s quite simple whilst for others it’s more complex. Especially when there are children involved, possible ex-spouses or other individuals that are dependant on you. And of course, you may wish to leave a percentage of your estate to charities, leave money to look after your pets and ensure that a specific aunt gets that sentimental piece of jewellery.
Having a Will in place is equally important to young and single people though. As you’re starting your career and building up wealth, you need to ensure that everything you’re working towards will be distributed according to your wishes in the event of your death. Lingering admin or disputes due to lack of a Will can be a nightmare for your family.
What happens if you die without a Will?
It may not seem like such a big deal. One could discuss your wishes and plans with your family and leave them a note to deal with it all. However, it’s unfortunately not that simple.
If you die without a valid Will * your estate (everything you leave behind) will be divided between your spouse and children in accordance with the Intestate Succession Act. This is a lengthy legal document detailing how an estate should be divided up. The basic guidelines are that the surviving spouse inherits the greater of R250,000 or a “child’s share” and the child’s share is determined by dividing the total estate by the number of children and the spouse.
There are of course rules to cover all sorts of scenarios and these are all dealt with by the Government gazetted Act. You nor your family have no say in the process.
Ensuring that your family, loved ones and organizations benefit as you would want them to is one of the reasons why it’s important to have a Will.
* To get back to the valid Will; an unsigned Will or incorrectly signed Will is not valid. Nor are emails, electronic copies or handwritten notes. There are a whole host of issues that could invalidate your Will.
How can you draw up a Will?
Well now you’re probably wondering how you actually draw up a Will. It’s clear that you’ll need some sort of professional help in this regard. There are several options available to you though, all with their pros and cons.
Banks and most life insurance companies offer a free service of drawing up you Last Will & Testament. This has the advantage of being free now, but such an offer will almost always include the requirement of appointing the said company as the Executor (the person or company that legally manages the distribution of the estate). The Executor will obviously need to get paid and free services often charge high Execution fees. Best to do your homework in this regard.
Your Financial Advisor or Planner can also usually assist in drawing up a Will for you. If they are not able to do so themselves, they will certainly have good recommendations to offer. In this scenario you pay a fee upfront, but you also get to choose your own Executor and thus can negotiate (or at least discuss) the fees upfront.
Another option though is use “DIY Will” which is a blank template that you can purchase from most stationary shops. In very few and in quite simple scenarios could this possibly work to have the desired outcome, provided that your estate is really simple and not worth very much. It’s better than leaving it to the government to decide, but it’s not the best option.
The Executor fee is calculated as a percentage of your gross Estate value, and then VAT is added on top. Currently the fee may not exceed 3.5%. This meaning that if your estate is worth R1,5million, the maximum fee payable would be R52,500 + R7,875 VAT; totaling R60,375. Just negotiating 0.2% off the fee would save you R5,175 – well worth the few hundred rand to draw up a Will. Of course, if you own several properties and have large life insurance cover your estate could be worth several million – that’s when these fees really hurt!
The Executor fee and VAT are not the only expenses that can eat away the value of your Estate. Estate administration fees consist of: the Executor fee + VAT Estate duty, transfer costs, master’s fees, standard postages and petties. Estate duties and property transfer costs are therefore levied in addition to the Executor’s fee. Remember your large life insurance cover mentioned earlier? It can really hurt when you have to pay the Estate Duty.
The easiest way to draft your own Will online
QuickWill.co.za offers a new option to South Africans. An online service to draft and store your last Will & Testament. It’s really comprehensive, easy to use and fully customisable to your needs; including the option to select your own Executor. Once printed, signed and uploaded they will validate it for you and optionally store the original copy.
In support of the current Covid-19 health crisis, QuickWill is allowing customers to sign up and self-draft their Will for FREE using the coupon code: COVID-19. This will allow you to not only draft your Will quick and easy, but for free as well.
Visit them here: www.quickwill.co.za
Thanks for your post! I finally drafted a will for my husband and myself after months of researching and asking people for assistance. We tend to rely on financial advisers and banks to take care of our affairs because we simply don’t have the time. The same applies to insurance policies that we hand to financial advisers to take care of and pay each month not knowing how much they score out of us! Having a will is paramount to taking care of your estate for your family members to avoid squabbles when we die. The more we learn about everything finance related, the better our future shall be.