Consumer Information

Authors:  Roxanne Benater
Partner at Benaters Attorneys
2021

Expertise in Wills, Trusts and the Administration of Deceased Estates

There are very few certainties in life. But it was Christopher Bullock who coined the commonly used phrase in his work – the Cobbler of Preston (published in 1716), when he noted, “’tis impossible to be sure of anything but Death and Taxes”, predating Benjamin Franklin’s more famous coining of the phrase in his letter to Jean-Baptiste Le Roy by some seventy-three years (in 1789).

A good place to start, is at the beginning of the process – with a will, estate planning, the basics of a trust and the administration of deceased estates.

What is a will?

In its simplest form, a will expresses your final wishes, once you have given up the ghost. A will is a formal, signed, written document, in which the dearly departed (now referred to as the testator) voluntarily sets out their instructions in unambiguous terms as to how their assets are to be “passed down” or inherited following their demise.

Ø What can be contained in a will?

A will allows a testator to dispose of the whole or any part of their estate (now known as the deceased estate) as they please. A person’s estate is made up of the aggregate of assets and liabilities at the time of passing. This can include immovable property, jewelry, shares and unit trusts or even your beloved sheepskin slippers.

A will also enables a testator to institute heirs and appoint legatees (or their substitutes), postpone the vesting of a bequest (something that is handed down by virtue of a will) subject to a condition, create trusts, appoint trustees and administrators (and to regulate their powers), appoint executors and guardians and even make a will without naming beneficiaries (such as one in which a previous will is revoked, an executor appointed, or an heir disinherited).

Basically, as long as it is not illegal, impractical or against public policy you can leave anything to anyone in your will. Provided your will is valid. For example, you can specify in your will that you are leaving your entire estate to your beloved fur child (this happens). Or you could leave your entire estate to a charity like the SPCA or Kitty and Puppy Haven. Perhaps even your favourite church. It is entirely up to you. Which seems obvious. But it is important to note that you do not have to leave all your assets to family, if that is not your wish. You have choice. And this is known as freedom of testation.

Ø What if I don’t leave a will?

If you fail to draft a valid will, meaning you will have passed intestate (literally meaning without a valid will) the assets in your deceased estate will be distributed in accordance with the Intestate Succession Act 81 of 1987. This in essence means that with no valid will to direct your executor as to what you want to go to who, your estate will be administered and divided according to Section 1 (1) of the Intestate Act.

Always remember, you don’t just need a will, you need an estate plan. While the two terms “will” and “estate plan” are often used interchangeably, this is wrong. They are two different things. An estate plan is a set of legal documents to prepare for your death. A will is just one of those legal documents, albeit an important one. So, you don’t need to draft just one legal document and get it right, but several.

What is Estate planning?

Estate planning touches on many areas, and involves not only planning for death but also planning during your lifetime – from financial planning, health planning, matrimonial property regime planning, income tax and business planning, to offshore and retirement planning – all of which should form part of any comprehensive estate planning exercise.

It must be highlighted that estate planning is generally misconceived to be simply about ‘making a will’. Whilst a crucial part of your estate planning, a will is only one component of a comprehensive estate plan. Matters such as your marriage contract(s), capital gains tax (CGT) and any income taxes you owe to SARS must be considered in your estate plan to ensure that the process of winding up the estate is smooth.

Estate planning involves putting together and crafting a number of legal documents and processes that will have the effect of creating and maintaining a lifestyle for you and your family while you are alive and thereafter for your loved ones after your death. Planning your estate, will ensure your loved ones are taken care of. Properly.

Estate planning is crucial if you are married, have been married multiple times, have children from different relationships or support people financially. It will allow the protection of your loved ones from legal stresses and financial insecurity after your death. You have the chance to ensure that your estate duties are minimised and that there is sufficient liquidity to meet your estate’s financial obligations upon your death – ultimately ensuring that any inheritances are sufficiently distributed or protected for your younger beneficiaries.

In addition, an important part of the estate planning process involves gathering up and storing all your most important personal documents in a file or in a location that will be easy to find.

Your personal circumstances will guide us in advising you on the specific details of your estate plan. Every family situation is unique, so there is no “one-size-fits-all” approach that will adequately serve the needs of everyone. And we embrace this as we approach your estate planning process.

Note – when planning your estate, inheritance tax will come to the fore. Be sure to discuss this during your consultation!

What is a trust?

Generally speaking, when the notion of forming a trust comes up, most people associate the terminology with wealthy families looking after their own, especially upon death. And that is not wrong, family trusts (where all the beneficiaries to a trust are family members) do exist, but in South Africa, there are basically three types of Trusts –

inter vivos trusts or living trusts – is established by someone during their lifetime to manage certain assets or investments and support beneficiaries, such as family members. An inter vivos trust is a core and most effective form of estate planning and can be vested or discretionary trusts;

testamentary trusts – commonly referred to as a will trusts, these types of trusts are only created in terms of the will of a deceased person. Testamentary trusts are usually created to hold assets on behalf of minor children, since minor children cannot in terms of South African law, inherit anything. They cannot be registered with the Master of the High Court during the lifetime of the Testator (the person making the will), as they do not come into existence until the death of the Testator, and

bewind trusts – are created as trading vehicles providing trustees with limited liability and certain tax advantages.

The complexities around the type of trust you form, especially in light of your overall estate planning process, must be discussed with your trusted legal advisor who will be able to advise you on the best way forward.

Administering deceased estates

In the unfortunate event of a loved one passing away, the details of their estate need to be processed accurately (and with care) to give the family that is left behind peace of mind. This will entail administering their deceased estate.

The administration process ensures that all the terms of your loved ones last will and testament (if there is one) are carried out appropriately (keeping in mind the true intentions of the deceased). The process itself is highly technical because each individual’s assets, family wishes and circumstances vary. Because of this, the estate administration process requires a suitably qualified legal professional to undertake the task (keeping in mind that the process to be followed is prescribed by the Administration of Estates Act, 66 of 1965 (as amended).

The above information is sourced from the original article that can be viewed here:

Contact Roxanne Benater at Benaters:
Call:  082 325 8585  or email:  roxanne@benaters.com

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