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​​​​​​​​​​​​​​​​​​​​The Importance of a Will and Succession Planning

By Linda Greeff, 8th December 2014

Have you ever asked yourself the all-important question, “Why do I need a will?” The general misconception is that a will is primarily for the wealthy. Some people say: “but I live a modest life, should I concern myself with a will?” The answer is a resounding, Yes!

What is a will? A will is a legal document that communicates a person’s final wishes, as pertaining to possessions and dependants. This last will and testament will have clear instructions on what to do with your possessions and dependants. It will outline what to do with your possessions, whether they are being left to a family member, another person or maybe donated to a charity. Regardless of how much or how little money you have, you should have a will!

Should you have minor children, your last Will and Testament should ideally indicate who will serve as Guardian for your children until they are classified as adults. In addition to this, you can provide for children from a previous relationship or children with special needs.

If you die without a valid will and you leave behind minor children, their inheritance must be paid into the Guardian’s Fund, where it must remain until their 18th birthday. Consequences of this could be the possible sale of the family home, which is quite possibly something you would never wish to happen; furthermore a minor heir may be too immature to comfortably handle the proceeds of the estate or could be physically or mentally handicapped. With a valid will, the testator can set up a testamentary trust which stipulates how the assets must be managed on behalf of the minor, thus eliminating the burden to your children.

Your circumstances are always changing. That is why it is important to revise your will regularly to ensure that it remains a true reflection of your wishes. It is a good idea to review your last will and testament especially in the following circumstances:

  • Marriage, including the marriage of an heir;
  • The birth of a child or heir;
  • Divorce, including that of an heir

If you do not have a valid will, you will die intestate. In such a case, the state will oversee the distribution of your assets and this may create a situation where your wishes could be ignored and your loved ones may not receive the assets you wished them to have. This could also lead to severe administration, taxation and legal problems and possibly financial losses for the family and dependants. You will be subjecting your family and loved ones to confusion and anxiety at what is already a difficult time.

A comprehensive will contains very important information about all the assets you have accumulated over the years, as well as your final wishes. It is vital that you understand that in order for a will to be valid, it must comply with certain legal requirements.

Some important information you need to know about your will:

  • You must be 16 years or older;
  • Only an original and signed will is valid;
  • The testator must sign the will at the end of the will and on each page, in the presence of at least two competent witnesses;
  • The will must then also be signed be these two witnesses, in the presence of each other;
  • The witnesses cannot be beneficiaries of the will;
  • Choose an executor that is capable and able to perform the duties required of them.
  • Review your will every year or as your circumstances change so that it accurately reflects your current wishes
  • Furthermore Estate Duty, Income Tax, VAT and Capital Gains Tax can take a large chunk out of your estate if not correctly provided for.

Remember, a will is not only for people who have reached a certain age when death is considered “not far away,” people die at any age. With the festive season practically on our doorstep please ensure that you do not go on holiday without a valid will and thus creating unnecessary financial hardship and emotional stress.

Sanlam Life Insurance is a licensed financial service provider.
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