Talking about your death is not the most uplifting topic of conversation to have with your partner. No one really wants to contemplate dying, or what will happen to your spouse and children if you were no longer around. This is true of many couples, especially younger couples who are still raising young children and who somehow can’t contemplate the need for Estate planning. While you’re young, fit, healthy and full of vitality, having a conversation about death is akin to being struck by a soggy blanket on a sunny, African day. As I’ve said before, lifestyle financial planning is about planning for both the foreseeable and the unforeseeable events in life. Planning for the foreseeable is the ‘easy’ part of financial planning – saving for your first home, planning tertiary education for your children, investing for retirement. These are all the events in our lives that we can (to a large extent) control, plan and be strategic about. The real challenge lies in counselling clients about the unforeseeable events that life can and may very well deal one. Retrenchment, dismissal, cancer, a debilitating disability, your untimely death or the death of a loved one. Admittedly, these are the tragedies we hope life won’t throw at us. Sound financial planning, however, means putting cost-effective and appropriate mechanisms in place to make sure you and your family are best protected against any of life’s unforeseeable, and not-so-pleasant, events. One of the greatest legacies you can leave to your spouse and your children is a Will. And if you think that Wills are only for high net worth individuals, think again.
Unfortunately, the well-intended Will has received shockingly incorrect publicity from the over-simplified US film-industry. And just as a matter of interest, American estate planning legislation is not based on Roman-Dutch law that forms the basis of South Africa law – which makes the American version of a Will even more inappropriate for us South Africans. So, forget everything you’ve ever seen in the movies about Wills, disinherited step-sons and embittered widows. As South Africans operating under a highly-developed legal system, the reality is that we should all have a valid Will.
Contrary to popular opinion, the Will is not the privilege of the wealthy few. In terms of our law, if you die without a Will (i.e. Intestate), all important issues such as the guardianship of your children, the distribution of your assets, and the administration of your Estate will be done by the South African courts, which is certainly not an ideal situation given our already over-burdened courts. By having a written, signed and witnessed Will, you are able to avoid having your Estate wound up by the State, no doubt subject to massive delays and bureaucracy. Besides for using a Will to appoint your own executor of your Estate, there are loads of other sound reasons for having a Will.
If you have minor children, we strongly recommend that you prepare a Will. Why? Because in your Will you may appoint a legal guardian to your children in the event of your death. What’s really important to know (and we can’t stress this enough) is that, if you and your spouse were to die intestate, the State would appoint a guardian for your children – and it may not necessarily be the person you would have chosen. As awkward and uncomfortable as the discussion may be, we encourage you to sit down with your spouse and talk about who you would appoint as legal guardians for your children. After our children were born, my husband and I had an in-depth discussion about appointing legal guardians for our children if we were to die. Although we both have siblings, we nominated my parents as the legal guardians for our children. Whilst our siblings would undoubtedly love our children and raise them well, we felt that ‘inheriting’ three additional children whilst in the prime of one’s life may be unfair to any of them. Our Will therefore makes provision for my parents to be the legal guardians of our children, and the proceeds of our Estates would be held in Trust for the children and administered by my parents on their behalf until each of them reaches adulthood. We’re acutely aware that there’ll come a time in the future where we will need to reassess the guardianship of our children, especially as our parents age. At this point, we will reconsider the options and update our Will.
On the topic of guardianship, we also strongly believe it’s something you should discuss with your children – when the time is right. Our two eldest children reached a stage (at around 10 years) where they became acutely aware of the concept of mortality. They started questioning what would happen if either of us were to die. As parents, our natural reaction is to brush it off with a careless, “Don’t be silly, nothing’s going to happen to Mommy and Daddy”. However, the fear of losing one’s parents is a very real fear that plagues children and we owe it to them to reassure them. Our children know that if we were to die, they will be raised by Granny and Grandpa. While it’s not a happy topic of conversation, knowing the answer to the ‘what if’ question has definitely settled their young minds.
Another compelling reason for having a Will is to ensure that your children don’t inherit under the laws of intestate succession. If you don’t have a Will, your assets will be distributed between your surviving spouse and your children according the the Intestate Succession Act. Because you died without a Will, the money inherited by your children will be transferred the the State’s Guardian Fund and will be administered by this fund until your children reach adulthood. On the other hand, if you include a simple clause in your Will which provides for a Testamentary Trust to be formed when you die, all money inherited by your children will be managed by your Testamentary Trust and by your appointed Trustees. It really is a standard, uncomplicated clause that will ensure that your children’s inheritance will be handled by your appointed loved ones who will, undoubtedly, have your children’s best interests at heart. I don’t know about you, but I’d like to leave a well-managed and properly administered legacy for my children that will cause them no additional stress and heartache after I’m gone.
Like the topic of money, the “What happens when I die?” conversation is never something to look forward to. Instead of viewing a Will as a complicated, legal document for the seriously high net worth individuals, consider viewing a Will as an act of love for the precious people you’ll leave behind. Without being offensive, having a Will is not about you – it’s about them! A well-written Will which documents how you’d like your assets distributed and which makes provision for a Testamentary Trust for your children shouldn’t cost you more than a couple of hundred Rand. Having witnessed the heartache experienced by those who’ve inherited intestate, I have a very real appreciation for how essential it is for every one of us to have a Will.
Having a Will is a lot less complicated that dying without one. Get thy Will done!
Have a blessed day.
Categories: Lifestyle Financial Planning