Recently I have lost a few friends, all of whom had family that experienced numerous problems when trying to wrap up their loved one’s estate. I have also just read about the fact that Joost van der Westhuizen did not have a valid will. The scary thing is that his death was by no means unexpected. It shocks me that this situation still occurs, particularly when I thought iFacts was being quite forward thinking in terms of adding social media details to our wills and wider estate planning.
The following information is borrowed from a friend, Lynda Smith of Refirement, and I urge everyone to carefully consider your estate planning and will (no matter how difficult you may perceive this process it to be). Having everything properly in order not only makes it much easier for your loved ones that you leave behind, but also means that you don’t have to worry about dealing with these administrative matters in your final days.
iFacts has asked a few executors to help put together these points. We urge you to go through each one carefully, and to make sure that all of your affairs are in order.
1. Leave a copy of your will and marriage contract with your executor or financial planner, as well as a friend. The will must be valid. It might be worth reading up on this by clicking here. (http://www.gov.za/faq/wills-trusts-and-distribution-estates-deceased-persons/what-are-requirements-valid-will). Make sure that your loved ones know where the original will is being held, as it is almost impossible to convince the Master (without the intervention of the High Court) to accept a copy of your will. Each situation may differ, but preferably your spouse should be familiar with the contents of your will. It is not good enough to merely say: “You will be ok, honey. Off course I’ll make sure you are fine.” Why should it be kept a secret? We urge all couples to talk about it, and to have everything out in the open.
2. Making provisions for your funeral can be helpful. If payment for the actual funeral might be problematic, then you might consider a funeral policy. Even wealthy families sometimes find it difficult to fund a funeral because the bank accounts of the deceased person may be frozen already. While it might seem difficult or even ridiculous to talk about now, make your wishes about your funeral known to your loved ones, or at least have some level of conversation about this issue.
3. Spouses should have their own bank accounts. This is very important to ensure that the spouse and family that are left behind have funds which are available, up until the time that the estate is finalised. At present it is not all that unusual for estates to take up two years to finally wind up.
4. Make sure to keep all the details of bank accounts, investments, title deeds and policies in one place. Let your spouse, executor or financial planner know where you are keeping these documents or records. It is especially helpful if you update this list regularly. Remember that if you keep these details stored electronically, your family will need a password to access them.
5. The more information you can leave behind for your spouse or loved ones, the better. Keep an updated budget that includes sufficient details regarding monthly accounts that need to be paid, as well as a list of liabilities. This might include such items as mortgage bonds and vehicle financing agreements. It is helpful to keep one copy of an account for each of the expenses and liabilities. This makes it easier to find account numbers and other details.
6. Monetary provision should be put in place which will enable your family to cover all their expenses up until the time that the executor can finalise the estate. This might include money in a bank account, or even a life insurance policy that pays out to your spouse. These provisions can help to tide your family over until everything else has been finalised.
7. Ideally, the executor should be known to the family. Negotiating the executor’s fees at the time that your will is drafted is a good idea, especially when dealing with a large estate. Alternatively, if a family friend is made executor, he/she can negotiate the fees and terms with a competent executor. These days, executors need to have specialised knowledge and experience. It is therefore not advisable for a family member or friend to actually deal with the Master and SARS. We strongly advise that this function be taken care of by a professional executor (with the exception of an estate that is very simple and not urgent).
8. Ensure that there will be enough liquidity in the estate to cover outstanding creditors, executor fees, and estate duties. Once again, even wealthy families with asset rich estates, sometimes get caught out here. You do not want to have to sell the family home nor a sentimental holiday home in order to pay for fees and taxes. Ask an expert to calculate the potential duties and taxes that you might be liable for. If required, take out insurance to pay for these.
9. Pay attention to your marriage contract. If you are married in community of property, or even with accrual, some of the remaining spouse’s assets may become part of the deceased estate. Again, you could end up paying fees and taxes on your own assets.
10. Make provision for minor children in your will, especially if there is any doubt over the remaining spouse’s ability or willingness to take care of the children (or if both parents pass away). There should be a testamentary trust stipulating the duties and powers of the trustees.
I hope this information is useful to you. Please use it to carefully reconsider what you have in place, and whether you need to make any changes. The more organised you are now, the less of a burden you will place on your family and loved ones should you pass away.