Did you know that over 85% of South Africans have not done any estate planning, such as setting up a will for their children? Shocking as it may be, people don’t quite like thinking of death and their responsibilities to their families after they have passed away. Many believe that they will only need to set up a will when they are rich or when they are older.
Unfortunately, death often comes as a surprise and even if you did set up a will five or so years ago, your financial circumstances and family and/or friend relations change.
If you die without a valid will in place, you will die intestate and this means that Government Laws will decide on the process of appointing an executor and will decide on how your assets must be distributed amongst beneficiaries, such as your children, spouse or other family members. This can take a long time and while the process is ongoing your assets – even the smallest ones like a bank account will be frozen. As the result, your family will have to come up with the funds for your burial and will not have any money at hand to pay for expenses you would normally have covered. The entire process is lengthy and will add to the financial burden on your estate, which may mean that your loved ones end up getting nothing from the estate.
Many South Africans also think that they can set up a will with their spouse and it will be enough. Regrettably, the country also has a high divorce rate and if the ex-spouse is the executor, he or she may not be so willing to pay out on a claim from a second wife or husband to support a child born from the second marriage, which will result in a court battle.
Another mistake often made by South Africans when setting up their wills is to appoint friends or family members as executors. Their friends or family normally does not, as executors, act according to the requirements of the law, placing risks on your estate assets.
It is thus recommended to appoint an independent third party as executor, one that has experience in setting up wills and acting as executor.
Dying without a will when having small children may also mean no record of who the guardian should be. In this instance, if guardianship cannot be established, the state will take over the role. It is already very traumatic to lose parents, ending up in state care far from people who know and love you while still being a child, in addition to the death of their parents can have a devastating effect on the wellbeing of your children.
Rather make qualified advisors or trust companies the executors and seek professional help when you want to set up a will of do estate planning. Do this as soon as possible and review the will at least every two years to ensure relevancy. You can also set up a living will and for this it is highly recommended to make use of professional, specialised institutions to handle the process.