Drawing up a will can give your loved ones a lasting legacy
This week is National Wills Week, which serves as a reminder for South Africans to get their affairs in order or risk jeopardising the financial future of their loved ones.
The initiative was introduced by the Law Society of South Africa to encourage South Africans to get their last will and testament drafted as well as address the statistic that 7 out of 10 adult South Africans die without a valid will.
A 2024 Sanlam Legacy Survey has revealed 51% of South Africans believe that they don't need a will because they think they don’t own enough assets while 40% of them admit they want one, but haven't taken the step to draft it yet.
Dying without a will can result in families fighting over assets and money in long drawn out court battles or family members seeking the help of the courts to sort out estates.
One such case is the case of South African rapper Riky Rick, who died without a will.
Capital Legacy said that due to the rapper dying intestate (without a valid will) his partner Bianca Naidoo launched legal action to be appointed Executor of His Estate and recognised as Rick’s wife and a Beneficiary of his Estate.
According to Capital Legacy, Riky Rick’s (Rikhado Makhado) estate was conservatively estimated to be worth R2 million.
Naidoo who had a child with the rapper brought the action against the Johannesburg High Court and the then Minister of Home Affairs Aaron Motsoaledi.
Capital Legacy said that in her application, Naidoo gave the following reasons why she should be appointed Executor of his Estate as well as recognised as the rapper’s wife and as a Beneficiary including:
– Makhado moved into her Bryanston home with her and her daughter because he wanted have a long-term commitment with her.
– She supported him while he was trying to start his music career.
– She left her job to become the rapper’s business partner and manager.
– Makhado was in Naidoo’s medical care as a life partner.
– According to Naidoo, their families have recognised them as a married couple since 2013 and she had the support of the rapper’s family in her motion to the court.
Naidoo would later be appointed as executor of the rapper’s estate. A EWN report stated that the Department of Home Affairs had abandoned its bid to stop Naidoo from executing Makhado’s estate.
It was reported that Home Affairs objected to recognising Naidoo as Riky’s spouse but instead, declared that she was a permanent opposite sex life partner which would allow her to become the executor of the rapper’s estate.
While Naidoo was appointed as executor of the estate, it is essential that people take steps to avoid being in a situation like this.
Below two experts answer some important questions about drawing up a will and estate planning.
Dying without a will
According to Seugnet Moggee, Partner at Citadel Fiduciary, the Intestate Succession Act determines, by order of preference, what happens to your estate if you die without having executed a will.
If the deceased has no descendants but is survived by a spouse, which now includes a permanent life partner in situations where the partners undertook reciprocal duties of support, then the spouse or permanent life partner will inherit the intestate estate.
If the deceased is survived by a descendant but not a spouse or permanent life partner, then such descendant will inherit the intestate estate.
If the deceased is survived by a spouse or permanent life partner as well as a descendant, then such spouse or permanent life partner shall inherit a child’s share of the intestate estate or an amount of the intestate estate that does not exceed the fixed value of R250,000, whichever is the greater. Then the descendant will inherit the residue.
According to Moggee, a child’s share is calculated by:
– Adding the number of children and the spouse or life partner, so if there are two children and a spouse, a child’s share of the estate is 1/3.
Then if a child’s share is less than R250,000, the spouse will get R250,000 and the two children will share what’s left equally.
An example to illustrate the situation more clearly: if the intestate estate is R500,000, the spouse will receive R250,000 and the two children will receive R125,000 each. If the estate is worth R200,000, the spouse will receive the entire R200,000.
Moggee said that if the deceased is not survived by any relative only then will the intestate estate transfer to the Guardian’s Fund and if no one takes a claim within 30 years it will go to the State.
Dying with a will
Jeffrey Wiseman, head of Momentum Trust, said that process of administering an estate when a person dies with a will have eight steps.
Administering an estate is a complex and requires administrative expertise.
“It is for this reason that we encourage South Africans to ensure that the Executor nominated in theirs is qualified and able to do the work,” Wiseman said.
Protecting the financial future of future generations
According to Wiseman, a will provides clear instructions to the executor on how to distribute estate assets to the correct beneficiaries.
This means that the deceased can give clear instructions on what their loved ones should receive from their estate.
Moggee said that a will is especially important to protect the financial future of:
– minors,
– special needs heirs
– family members who are struggling with substance abuse or have lost mental capacity, as existing or testamentary trusts can be used to receive their inheritance on their behalf by trustees to be administered for their benefit and wellbeing.
Consulting a financial adviser
Wiseman said that it is critical to consult with an expert/financial adviser who can draft a legally valid will. However, a legally valid will is only part of the journey.
“A financial adviser is key in ensuring that there is a financial plan that backs up the wishes contained therein by ensuring that there is enough money in the estate to cover estate administration costs, taxes and settle liabilities.
“Provision is usually made in the form of death cover,” Wiseman said.
A will without a financial plan is like a sports car without an engine it is nice to look at but going nowhere slowly.
Is there a difference between drafting a will and estate planning?
According to Moggee, estate planning is the process by which you and your family arrange the transfer of assets in anticipation of death.
“Estate planning is part of a holistic financial plan that can include wills, trusts, donations, and Powers of Attorney,” Moggee said.
An estate plan should be reviewed and updated regularly to cater for changing laws and circumstances and to provide for different scenarios.
Are there costs involved with drawing up a will?
Moggee said that unlike the executor’s fee tariff (3.5% of the gross value of the estate) and the requirement that the fees of trustees be reasonable, there is no tariff for drafting a will.
However, this depends on the service provider. Some providers do not charge for drafting the will but can charge an annual fee for storing the will.
“A will is a very important document, and it is worth paying a fee for the peace of mind that the will is clearly drafted, correctly executed and reflects your wishes and intentions,” Moggee said.
According to Wiseman, if you are speaking with a financial adviser they will normally include a will as part of the broader estate planning process at no additional cost.
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