Why you need a will
Lesbian and gays should be aware that in the event of a the death of a same-sex partner where there is no will, the surviving partner is unlikely to inherit anything.
July 10, 2003
A will is a document in which you set out how your possessions are to be distributed after your death. You may amend or replace your will at any time.
Why is it important to have a will?
We all accumulate assets during our lifetimes. Even if they are of no great monetary value, they will be of sentimental value to ourselves, our families and friends. When you draw up your will you ensure that your special people will be looked after when you are no longer there for them and that items of monetary and sentimental value are properly protected according to your wishes.
Should you die without having prepared a valid will, your assets will be distributed according to a set formula which may be far removed from your intentions. This situation, known as intestate succession, may lead to the inadvertent sale of your house or business. It may also result in lengthy delays in winding up your affairs and will increase the cost thereof. Lesbian and gay people in particular should be aware that should they die without a will, it is very likely that their partner will not inherit anything. This is because the law of intestate succession does not yet recognise same sex partners as family.
Responsible financial and estate planning must provide for the ongoing management of your assets during and beyond your life. A carefully thought-out plan minimises the impact of estate duty and other taxes on the value of your estate. Your will is an essential element in your plan. By example, it is very important for lesbian and gay people to identify their partners in their will as such, failing which they may be subject to a very heavy inheritance tax.
It may be appropriate for a trust to be formed and for the inheritances of your minor children to be held in trust until they reach a certain age. This type of trust known as a testamentary trust, can be specified in your will and a nominee, such as the Trust division of a bank, can be nominated. If you do not have a will, or do not direct that a trust should be formed, it will not happen.
Your will enables you to direct the proportions or specific items that each person is to receive. You may wish to make a bequest to your your favourite charity, you may name beneficiaries who are not members of family. All these wishes will be ignored if you have not set them out in the form of a will.
The importance of your drawing up a will cannot be stressed too strongly. Of course, nobody wants to think about dying and it is just too easy to put off the making of a will. Your will might be a very simple, straight forward document. In fact, in most cases, lengthy and complicated wording is unnecessary. Yet this single document can have a profound effect on the wellbeing or otherwise of those you care most about.
What are the requirements for making a will?
Any person of 16 years or more - and who is of sound mind - may make a will. Provided you know the legal requirements, you may draw up your own will. It is advisable, however, to seek professional assistance to ensure that your wishes are set out clearly and that all legal aspects are covered.
The Trust divisions of all the banks are in a position to provide this service. For lesbian and gay people, it is also a good idea to make use of the services at the Gay and Lesbian Legal Advice Centre at the Lesbian and Gay Equality Project.
How long will it take to prepare my will?
Unless there are unusual circumstances, your will should be ready for signature within a few days.
How much will it cost?
If you draw up you own will, then of course there will be no cost. However, as already pointed out, there may be disadvantages. Banks will charge between R 300.00 and R 500.00 for drafting a will. The Gay and Lesbian Legal Advice Centre charges an administrative fee of R 350.00, which includes not only a will, but also a Living Will (see future article) and partnership agreement.
In any event, the charge is negligible in comparison to the value of having a correctly prepared will that adequately expresses your wishes and covers all eventualities. This, surely, is no more than your loved ones deserve.
What is an executor?
An executor is an individual or company whom you nominate in your will to administer your estate after you die. This process involves gathering together all your assets, paying off all debts and distributing the net assets of your estate in accordance with your wishes (if you left a valid will) or as per a legal formula (if you died intestate).
Who should you nominate as executor?
Your first thought might be to nominate your brother, sister, favourite uncle or best friend as executor of your estate. There is logic in this, of course, because of the trust you have in these people. But beware, there are potential pitfalls!
Firstly, if you nominate an individual and the person dies before you do, or before your estate is finalised, a new executor will be appointed.
Secondly, the administration of a deceased estate is not a simple process. Documents must be prepared for submission to the Master, assets must be valued and perhaps sold. Debt must be settled, accounts prepared and inheritances distributed.
Thirdly, an individual may have to furnish security to the Master. The cost thereof will be borne by your estate which means, in effect, those who are to inherit from estate. Think carefully before nominating an individual as executor. Does he or she have the knowledge, resources and time to carry out all these functions? Is it fair to place this burden on somebody close to you? The Trust Divisions of most banks have the resources to do the job professionally and objectively. The drawing up of your will and the subsequent administration of your estate are of such vital importance that nothing should be left to chance.
Make use of the professional service that is available from these firms. If you wish, you may nominate a relative as co-executor, thus taking care of the emotional side as well.
What is a trust?
There are two types of trusts:
a Testamentary Trust is provided for in your will and only comes into being after your death. Furthermore, the trust might only be established if certain circumstances apply - eg. if your children are still minors when you die.
a Living Trust (also known as an Inter Vivos Trust) which you create while you are alive.
What is a trustee?
In both types of trusts, the person who creates the trust or who directs in his/her will that a trust should be created nominates an individual or company to be the legal owner of the assets in the trust. This person or company is the trustee and is responsible for the administration of the trust and its assets for the benefit of the beneficiaries.
What will does it cost to administer my estate?
There is a legislated fee, currently set at 3,5% of the gross value of the estate.
Whether or not the full fee will apply depends upon the nature of the assets, the amount of work involved and what has been agreed with the client or his/her beneficiaries.
Who will look after my will?
Your attorney or the Trust Division of your bank will keep copies. You will obviously wish to keep a copy and may also wish to give a copy to a relative or close friend. –Qfn
For a free personal assessment of your financial risk profile, your retirement plan or a general portfolio assessment, email us.
A living will is for same-sex partners who cohabit - see our example
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