Your Last Will and Testament is one of the most crucial documents that you will ever sign during your lifetime, irrespective of your personal or business circumstances and the estate planning that relates thereto.
A Will is a legal statement that details who will inherit your assets after your death. This document only comes into force and effect when you pass away. In South Africa, you mostly have freedom of choice to distribute your assets as you wish, save for taking public interest into account, legislative restrictions and excluding certain unlawful provisions.
One area where this freedom of choice is restricted is in the management of your pension funds. According to the Pension Funds Act, death benefits from your pension-, provident-, preservation-, or retirement annuity cannot be included in your Will. However, if you bequeath all or a portion of these funds to your minor children, you may specify that it should be kept and administered through a testamentary Trust, instead of being paid directly to a guardian.
Assets held in an inter vivos Trust cannot be included in your Will as these Trust Assets belong to the Trust and does not form part of your estate. If you exclude your spouse from your Will, they may institute a claim for spousal maintenance under the Maintenance of Surviving Spouses Act.
It is a requirement for your Last Will and Testament to be in writing and signed on each page, in ink, by yourself, the Testator, in the presence of two witnesses whom are over the age of fourteen years.
One critical aspect to consider when drafting your Will is the appointment of an Executor. This person will carry out your wishes when you pass away and ensure the proper administration of your estate.
The Executor of your late estate carries the responsibility to report your estate to the Master of the High Court and to, amongst others, close accounts, settle expenses and debts, and distribute the remaining assets to the heirs as per your Will.
When choosing your Executor, consider a person who is trustworthy and organised, as they need to act in your estate’s best interests at all times. Your Executor will deal with your personal and financial matters and family dynamics.
The Master of
the High Court makes the final Executor appointment. If the individual you have
appointed in your Will lacks the necessary skills and knowledge to administer
your late estate, a skilled professional i.e. an attorney, accountant, or
fiduciary specialist will be appointed as an agent to assist in the
administration process. If your estate is complex you may want to consider
appointing an experienced professional from the onset.
One needs to bear in mind that an Executor must maintain good relationships with multiple parties during the administration process and is it essential to choose someone who can communicate effectively with your family, beneficiaries, and other role-players.
Appointing the correct individual as Executor of your late Estate can save your estate significant costs and ensure efficient administration. For the best results, consider having your Will professionally drawn. This will help navigate any restrictions and ensure that the best outcome for your family is obtained.
By Ariza Vermeulen | Senior Associate, FPSA®
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