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Most people think of a will as a document that simply says who should inherit what when they die. In reality, a properly drafted will needs to do considerably more than divide assets. It needs to anticipate what could happen before an estate is eventually wound up.
What if the person you appointed as executor is no longer able to act? What happens if your spouse dies before you? Who manages an inheritance left to a minor child? And what powers will the person managing that money actually have?
ALSO READ: What a valid will actually protects
Johann van Vuuren, Estates Manager Inland of Legatus, says these are the kinds of questions that should be dealt with while a will is being drafted, rather than leaving families to resolve them after someone has died.
According to Van Vuuren, there are five important contingencies every sound South African will should address.
1. Make it clear that previous wills are revoked
People often update their wills as their lives change. They marry, divorce, have children, acquire property or simply change their minds about how they want their estate distributed. But if you have made a will before, that earlier will remains legally valid unless it is explicitly revoked. A new will does not automatically cancel an old one. Van Vuuren says every will should therefore begin by revoking all previous wills and testamentary acts. This removes uncertainty about which document represents the deceased’s final wishes.
2. Decide who should wind up your estate
The executor plays one of the most important roles after a person dies. An executor is legally responsible for winding up the estate, dealing with assets and liabilities and overseeing the administration process. If no executor has been named, the Master of the High Court appoints one. That person may not necessarily be someone the deceased or the family would have chosen. A will should therefore clearly name an executor, Van Vuuren says, as well as an alternative in case the first choice dies, declines the appointment or is unable to act.
3. Think about who may need a trustee
Leaving an inheritance directly to a beneficiary is not always the best option. A minor child, vulnerable dependent or even a young adult who is not yet ready to manage a significant amount of money may need additional protection. In these circumstances, assets can be held in trust. The will should name the trustee and alternative trustees, but it should go further than simply identifying them. It should also deal with questions such as whether capital may be released for education or healthcare and at what age beneficiaries should ultimately take control of their inheritance. These are decisions that can have a significant effect on how an inheritance is managed for years after a person has died.
4. Deal with security for executors and trustees
Another issue that is easily overlooked when drafting a will is the requirement for security. By law, an executor or trustee may be required to furnish security to the Master of the High Court, which can add both expense and administration to the process. South African law allows a will to exempt an executor or trustee from this requirement where someone trusted by the testator has been nominated, such as a spouse, adult child or professional fiduciary. Van Vuuren recommends that South African wills include an appropriate exemption clause, as this can help simplify the administration of the estate and reduce costs.
5. Give trustees the powers they will actually need
Naming a trustee is only part of the job. A will should also spell out what that trustee may do. Without sufficiently clear powers, a trustee’s discretion can be restricted and decisions that should be relatively straightforward may require approval from the Master’s Office. A comprehensive will can give trustees the authority to invest and reinvest funds, sell or lease property, borrow money on behalf of the trust, make payments of income or capital to beneficiaries and appoint professional advisers where necessary. The aim is to ensure that the trustee can administer the assets effectively rather than repeatedly encountering obstacles that could have been dealt with in the will itself.
And then there are the “what ifs”
The five core provisions are important, but Van Vuuren says a sound will should also anticipate some of the circumstances families may not immediately think about.
What happens, for example, if your spouse dies before you? Your will should make provision for your children or other alternative beneficiaries if your spouse predeceases you. If you have minor children, guardianship should also be considered. A parent can nominate a guardian in a will rather than leaving that question entirely unresolved after death.
Marriage can introduce another layer of complexity. If you are married in community of property, half of the joint estate belongs to your spouse by law, something that needs to be taken into account when deciding how the estate should ultimately be distributed. The marital regime of a beneficiary can matter too. Where a beneficiary is married in community of property, Van Vuuren says an inheritance may in certain circumstances become exposed to claims involving the beneficiary’s spouse or creditors. A properly structured bequest to a trust can provide additional protection.
A will should prepare for more than one outcome
The difficulty with drafting your own will is not necessarily deciding who should inherit your house, savings or other assets. It is anticipating all the circumstances that could interfere with those wishes being carried out as intended. An omission that seems insignificant when the will is signed can become a serious problem years later when the document has to be interpreted and implemented. That is why professional will drafting is about more than recording who gets what.
A well-drafted will considers the people who will administer the estate, the beneficiaries who may need protection and the circumstances that could change before the document eventually comes into effect. In partnership with Legatus Trust, this article forms part of the Estate Matters series on Legal Notice Publishing.
For professional estate planning advice and will drafting services, contact Legatus Trust:
Johannesburg: +27 861 722 626
Cape Town: +27 21 914 4925
Email: info@legatus.co.za
