Here are four reasons why it is important to have a last will and testament:
1. To leave a legacy
- A last will and testament gives you the ability to nominate your heirs, beneficiaries or legatees.
- This eliminates an estate battle when you die.
2. Provide for your family’s future
a) Nominate a guardian
- This is the place of safety that your children will go to should both parents die simultaneous or they die within a short period.
- With you nominating a guardian it assists in the application process.
- Remember to tell the nominated guardians of your choice that you have nominated them, as it might surprise if they don’t feel up to it and decline the appointment.
- This will also give you peace of mind knowing that your children will be taken care of.
- If no guardian is nominated, anyone in the family can apply for guardianship.
- If there is no family or close relative, then the court might place them in foster care.
b) Set up a testamentary trust
- Important to make provision for the trust if there are minor children or handicapped beneficiaries.
- If no provision is made, monies are payable to the guardian’s fund (not the best option — there have been instances of guardians being declared bankrupt).
- This ensures that your minor or handicapped beneficiaries’ inheritance stays safe.
3. Nominate an experienced and professional executor and trustee
To nominate an executor and trustee who will assist the family during their time of bereavement in order to give them peace of mind, knowing that there is a responsible person taking care of your affairs.
Here are a few tips when choosing an executor:
- You need to be comfortable, but also informed, when nominating an executor as there are fraudsters who have no intention of ensuring that your last wishes be fulfilled.
- Not everyone is suitable to be an executor so, even if you feel that you would like a family member to be the executor, the master will ask that he/she gets someone to assist — as our firm can do.
- It is better to nominate — in advance — an independent third party, such as an attorney, trust company, bank or auditor
- Remember to nominate someone who deals specifically with estates in order to avoid any unnecessary delays.
- You need to nominate a person who you know and trust to ensure that your minor or handicapped beneficiary’s interest will be safeguarded.
- This goes hand-in-hand with the executor and applies similarly to the above point.
- You need someone who knows the minor or handicapped beneficiaries, bearing in mind that — as protection — an independent third party should also be appointed.
4. Minimize estate duty taxes
You are in control of how the prescribed abatements will be used to your advantage. This will minimize the death duties payable to SARS when you die.
Finally, and, perhaps most important, what happens should you die without having a valid last will and testament?
The intestate succession act applies and this means:
- The act prescribes who your heirs or beneficiaries are
- There is no protection for your minor or handicapped beneficiaries.
- The beneficiaries are in control of nominating an executor and this may cause them to nominate the wrong people while they are still in the bereaved period.
- No control of use of the abatement for death duties payable to SARS.