Image: iStock
A last will and testament is important for those you leave behind, especially if some of them are financially dependent on you, such as minor children, a life-long partner who you are not married to, or aging parents.
Research conducted by Sanlam shows that 75% of South Africans do not have a last will and testament and it is unfortunately a fact that your estate will not always be distributed according to your wishes if you die without a will, especially if you leave behind unmarried long-term partner.
In 2020, the Constitutional Court held in the Bhanya matter that Parliament was best suited to set out the rights of long-term partners who relied on the deceased for financial support and should enact laws that would be enforceable.
Allison Alexander, practice head of the trusts and estates practice of Cliffe Dekker Hofmeyr, says contrary to popular opinion, living together or cohabitation is not a recognised legal relationship in South Africa.
“This means that should you die without a will in place, all your assets are distributed according to intestate succession law, which means that your partner will not have a say in how it is distributed in the end, leaving your loved ones in turmoil.”
ALSO READ: Considering taking out a funeral policy? Here’s how to avoid getting scammed
This is also something many consumers learned during the pandemic: life is unpredictable and our circumstances can change at any given moment and you must have your financial matters in order as part of your savings and investments process, says Mariska Comins, head of technical support at PSG Wealth.
She says estate planning is a crucial building block for your savings and investment journey and perhaps even the most important one.
“Your life is fluid and will change and so will your needs and goals. Therefore, your financial plans must be flexible enough to be adapted to achieve your goals, even if they change. However, once you have passed on, there is nothing you can do to change your plans.”
The last thing you want to do is leave your affairs in disarray and leave a challenge for your loved ones to deal with. “Experience teaches us that an untimely death in a family, where the deceased did not have an estate plan in place, can often cause a major family feud.”
ALSO READ: How to build your investment portfolio 101
An estate plan is designed to preserve and legally protect your assets during your lifetime, while ensuring that they are distributed effectively to succeeding generations when you die.
An estate plan provides the opportunity to choose your beneficiaries and what you want them to inherit, name a guardian for your minor children and decide who will manage the funds left to your minor children and ensure that these financial obligations are met.
It will also ensure that your financial dependents are well looked after, structure your affairs in a way that minimises taxes and ensure that there is enough money in your estate to cover daily expenses while the estate is being wound up.
Comins points out that an estate plan is not only about creating a will and covering the financial aspects of dying, but also putting a plan in place that will make it easier for those left behind by ensuring that your family is well looked after when you are no longer there.
You can add other considerations, such as what will happen to your pets, your domestic worker, other financial dependents such as parents and people who are not financial dependents, but who you want to inherit something from you, such as an adult stepchild.
It is also important for people close to you to know where all your important documents, such as passport, driver’s licence, firearm licences, updated tax returns, marriage certificates, divorce orders, store cards, loyalty rewards/programmes, social media accounts, memberships, car registration documents and property title deeds are stored.
ALSO READ: LISTEN: Generational wealth explained – What it is and how to create it
You also have to make sure that your family members are aware of your wishes and finer details, such as what your wish is regarding your remains?
Comins says many people simply mention cremation but say nothing of what should be done with their ashes.
If you die without a will, South African law of intestate succession will determine the distribution and beneficiaries of your estate and the end result could be very different to what you would have chosen while alive.
Moremadi Mabule, head of wills operations at Sanlam Trust, says there are several factors to consider when drawing up a will. “When couples get married in community of property, they create what is called a joint estate.
“This means that the instructions they set out in the will deals with half of the joint estate and that half of the joint estate will belong to the surviving spouse. These are important things to consider when weighing up how to divide your estate.”
ALSO READ: Saving for a comfortable retirement? Here are five steps to ensure you have enough
Also keep in mind:
Drafting a will can be a relatively easy and inexpensive process depending on your circumstances, Mabule says and this makes it more inclusive and accessible to those struggling financially.
If you have fairly straightforward requirements, you can complete a will application form, prepare a list of assets and liabilities and write up instructions on what must happen to your estate with the details of beneficiaries.
These wills can be prepared for free online via the Sanlam website and is perfect for married couples who are leaving their respective estates to each other and people who would like to leave everything to their young children, but rather get legal advice for more complex wills.
Download our app and read this and other great stories on the move. Available for Android and iOS.
