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Wills
& Estate Planning |
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Wills &
Estate Planning
Who are the people who mean the most to
you? The ones you really care about?
If you were to think about what would happen to your assets after
your death, you'd probably easily identify the people you'd like
to inherit from you. The only way you can be sure that they do,
in fact, receive your possessions is to record your wishes in a
Will, a document recognised in law as the expression of your wishes
when you are no longer available to speak for yourself.
If you haven't written down your intended beneficiaries in a valid
Will, all is not necessarily lost. It's not true - as most think
- that all your assets end up in State coffers. However, what could
well happen is that people from whom you're estranged will inherit
from you. And that may make you turn in your grave!
In estate succession, the name given to the administration of a
deceased person's affairs when there isn't a valid Will, is governed
by certain legal rules. The outcome could be identical to what you
would have stated in your Will, but that's often not the case. In
essence, these rules look for the closest relative as the beneficiary.
But imagine the horrible situations that this sometimes causes!
Life-long partners left destitute because everything has to be given
to the closest relative, an estranged sibling. Or, an incredibly
wealthy parent getting even more, at the expense of a struggling
lover or friend.
So, this is a crucial reason why you should have a Will - and why
you should constantly be checking it to ensure that its contents
still reflect your wishes.
In addition, a Will can be a vital part of an estate plan. In order
to limit an estate duty liability, for instance, it may be appropriate
to bequeath R1 million to your spouse and the rest to a trust; if
you don't state this in a Will, there is no way in which this result
can be achieved. Another example is the use of a Will to protect
the inheritances of minors. It's wise to keep their money out of
the Guardian's Fund, but you'll only be able to ensure this if you've
made provision in your Will for it. |
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The motivations
for drafting a first-time Will and for reviewing it are the same.
Most commonly, life situations necessitate action in respect of
your Will. Some typical scenario's are:
- 1 Getting married. Presumably, you'd want your new spouse
to inherit from you - and vice versa. You could also use this
opportunity to cater for the children you intend producing from
your marriage.
- 2 Other changes in marital status. Divorce
is a particularly significant change of status - and often there's
family tragedy because the necessary revision of a Will hadn't
been done. Divorce could also generate related issues, like maintenance
of children, for example, and planning for this situation becomes
really important, too.
- 3 The birth of children, whether
your own or friends', will probably require you to have another
look at your Will. Have you stated that each grandchild, say,
should receive R10 000 on your death? Or that your new godson
is entitled to your collection of war medals?
- 4 Investing
in a substantial asset - a house or a business - could change
your picture. Not only do you now own something that someone
else must receive when you die, but you may well also have created
a large liability in your estate. If you were to die while the
debt still exists, is there sufficient liquidity in your estate
to settle it? (Use the Liquidity Calculator (link to liquidity
calculator) on this site to assess your current liquidity position.) And, even
if there is, you may not have wanted the debt to reduce the inheritance your
family is due. Estate planning and a suitable Will are indispensable tools
in avoiding financial catastrophe among those dearest to you.
- 5 If you're
involved in your own business, you absolutely have to consider
what would happen to the business if you were to die unexpectedly.
You need to know that someone you can trust would be there the
next day to open the shop, or to harvest the farm crop, etc.
Business succession planning is a crucial part of estate and
financial planning, and the issue of creditors is a further element
you ought to consider, to prevent the loss of family assets to
business creditors.
- 6 As your savings take off, you'll
start accumulating wealth, and this puts your estate at risk
of being taxed heavily. Estate duty is a particular worry. Although
the threat of the levying of Capital Gains Tax may make planning
in the usual way a difficulty, it's still possible to work towards
reducing the ultimate knock your estate may take. (To work out
your likely estate duty liability today, use our Estate Duty
Calculator). (link to Estate Duty Calc)
People in same-sex unions, and those living together but not
married, as well as people married in terms of religious law,
need to be aware of a new estate-planning opportunity that has
become available to them - something that could significantly
save on Estate Duty.
If you'd like to apply for a Will in the comfort
of your own home or office, we offer an online application. (link
to online application) In addition to the Will itself, we can also
provide you with a Living Will if you request one. Please note that,
should you want to donate your organs, you cannot do so by means
of your Will.
For more information Contact Keller &
Neuhaus.
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