How important is a will?
To ensure that your estate devolves efficiently, cost effectively and with a minimum of delay upon your chosen beneficiaries, it is important that you draw up a valid Will and that you seek professional advice in doing so.
Your Will must take many things into consideration, the most obvious being the nomination of heirs and the appointment of an executor to administer your estate.
A Will trust can be created to control any assets being awarded to a minor child and it is also possible to stipulate your choice of guardian to care for your minors, in the event of the untimely death of your spouse and yourself.
However, issues which are less apparent but of the utmost importance should always be considered in conjunction with the drafting of your Will.
- Will there be sufficient liquidity in your estate to pay your debts and provide financial security for your family?
- Do you have business interests which may be vulnerable?
- Can estate duty(tax) be minimized?
- Is your mortgage bond covered by insurance?
- If applicable, where will the funds come from to meet your obligations in terms of a divorce order?
- What are the Capital Gains Tax implications?
- Is your will correctly structured to cover your offshore assets?
If you have an inter vivos trust which is set up during your lifetime, the trust deed may need to be reviewed with regards to the appointment of suitable trustees to manage the trust after your death.
Any or all of these aspects may have relevance for you and by seeking the best possible professional assistance, you will be able to identify problem areas, investigate solutions and achieve the Peace of Mind of knowing that you have done everything possible to streamline your financial affairs and to ensure that your Will is a sound legal document.
Should your Will be reviewed regularly?
Yes. Events which shape one’s life, such as marriage, the purchase of a property, the birth of a child, the death of a loved one, a divorce or immigration, all lead to a change in personal circumstances which may require the updating of your Will.
Should you create a Will trust?
A Will trust can be created and does not require any further formalities. Such a trust comes into operation upon your death and may have several advantages, for example:
- You can ensure that minor beneficiaries receive their inheritance at an age when you feel they will be sufficiently responsible to manage it.
- Your surviving spouse and children can be protected by ensuring that they receive income or capital in predetermined amounts.
- Beneficiaries can be given right to receive an income from specified assets- given that the preservation of the Trust capital is prioritized. Ultimately, the beneficiary will inherit the estate assets
What is an inter vivos trust and how can it benefit you?
An inter vivos trust is an entity which is set up by you during your lifetime and is effective as soon as you have complied with certain formalities.
Such a trust can be a useful tool in planning your estate with a view of minimizing the estate duty that will be payable on your death. Estate duty is currently payable at the rate of 20% on the amount by which the value of your net estate exceeds R3.5 million and 25% on the portion of such net value which exceeds R30 million subject to certain rebates.
By acquiring assets in the name of an inter vivos trust as opposed to in your personal capacity you can ensure that any increase in the value of such assets over the years will be the property of the trust and will not form part of your dutiable(taxable) estate. In addition, it is advisable to periodically review your existing inter vivos trust deed so that any potentially problematic areas can be identified and rectified where necessary.
We are able to advise you whether, depending on your personal circumstances, the creation of an inter vivostrust would be advantageous.
How is a deceased estate wound up?
The Administration of Deceased Estates Act prescribes the formal procedure which must be followed to wind up the estate of the deceased.
The executor who is nominated in the will must make an application to the Master of the High Court for Letters of Executorship to be granted in his favour. No executor has any power to act on behalf of an estate before he has been issued with this document.
An executor who is not himself proficient in estate administration normally chooses a professional agent, commonly an attorney, to assist him with his application to the Master and to attend to the administration process on his behalf.
The executor must attend to the following:
- Handling each asset forming part of the estate in an appropriate manner.
- Settling all liabilities.
- Obtaining all necessary tax clearance, i.e., estate duty, income tax, capital gains tax.
- Complying with the provisions of the Administration of Deceased Estate Act, including the placing of statutory advertisements and formal accounting to the Master.
- Communication with the heirs and all other interested parties.
- Collection and investment of all cash forming part of the estate; and payment and transfer of inheritances to the heirs entitled to same.
Can executors’ fees be negotiated?
Yes. There are ways to ensure that this will be possible.
Where is mine kept?
You are free to keep the original copy of the will. However, for obvious reasons, we discourage this. Our facilities are well equipped to keep your original will in safe custody. All you should do is advise your loved ones about this arrangement to avoid unnecessary delays after your passing. We will not charge you for holding your original will in safe custody.
We can assist you
We have a Deceased Estate Administration department which offers a professional, efficient, personal, and cost-effective services. Our fees regarding will preparation and safe keeping are competitive.
The firm
Makgale Law is a boutique law firm based in Rustenburg focused on serving a niche market, both business and select individuals. By understanding our clients’ needs and objectives we strive to deliver cost-effective legal solutions for all business and personal matters. We are committed to developing close working relationships enabling us to succeed consistently on our clients’ behalf.