You had meant to finish your will, but you did not get around to it. Your spouse approaches the family attorneys to help finalize your estate, but receives the upsetting news: There was no will!
Now, your estate must devolve via intestate succession and the consequences of this might not be what you intended.
Without a will you have no control over how your things will be divided up in the event of your death, so why leave it to the system. Make sure you have an updated will.
If someone dies without a will in South Africa, his estate will be administered in terms of the Intestate Succession Act 81 of 1987. 'Intestate succession’ means that your property and money will be passed on according to blood relationships.
This is not always easy to understand. What it means is that your property and assets will be passed on in one of the following ways:
- If you had a spouse, but no children, your spouse will inherit everything.
- If there is a spouse and children, your estate will be divided among them according to a specific formula. Your spouse will inherit R250 000 or a child’s share, whichever is greater. This is best explained by an example. Say you had a wife and two children and your estate is worth R800 000. The amount is then divided by three (= R266 666). Everyone will receive this amount – your wife gets a 'child's share' as the amount for each person is higher than R250 000. Alternatively, if your estate was only worth R500 000, your wife will get R250 000, and the rest will be divided among the children.
- If there is no spouse or children, but there are parents, they will inherit your estate in equal shares.
- If there is only one surviving parent they will inherit half of your estate and the other half of the estate will be inherited by the descendants of the deceased parent (your siblings). If there are no descendants of the deceased parent the full estate will pass to the surviving parent.
- If there are no surviving parents, your estate will be divided among your brothers and sisters.
- Should there be no brothers and sisters: Other blood relations will inherit nearest in degree, in equal shares. (Nieces and nephews.)
- In the event of the deceased having no relatives, the estate will be forfeited to the state after 30 years if no legitimate heir comes forward.
You choose who you want to inherit – you have control
The most important advantage of having a will is the fact that you can select your beneficiaries. The selection need not be only family. Anyone can be named in a will. Anyone can be excluded too.
You want to leave a friend or charity some money
You can bequest a specific amount to a friend or even to a charity. On the other hand, if you die intestate, only your blood relatives will get a fixed and identical portion each of the total estate.
You can protect your beneficiaries
In choosing to have a will, you can protect ultimate beneficiaries. For example, you can nominate a guardian to care for your minor children or create a testamentary trust for them.
Cost implications
If you have a will, you can also choose to employ estate duty savings which will be lost without a will. Without a will, there will also be additional costs to your estate in the form of legal fees, income tax or VAT.
Most people know they need a will but can’t find the time to have one drawn up. They don’t know how to draw one up themselves and are reluctant to fork out R1000’s. So they keep putting it off.
On the other hand, some people draw up their own wills without any input from a professional.
This could be risky, as you might inadvertently draw up a document that is unclear, confusing and perhaps invalid.
The global village and the Internet has changed our world. Technology has made it possible to invest and manage all your affairs online and also makes it possible to create your personalized will online anywhere at any time.
Where there’s a will – there’s your way, don’t leave it to someone else to decide!
OUTvest firmly believes that a solid, updated will is a vital component of a good financial plan. As such we are considering offering an online solution to support our clients with a facility to draft their own wills.
But before we make this decision we need your thoughts. If you have 20 seconds please click here and let us know if this is something you would use.