Will you get a will? Pun intended 😊
Having a valid will in place is often overlooked by so many people and forms an imperative part of your financial plan. In this article, I am going to discuss why it is a good idea to have a will in place and why it should not be overlooked.
- The first reason why a will should be in place is to ensure that your wishes are carried out. If no will is in place your assets get distributed according to the intestate succession act. The result is that your assets are not distributed according to your wishes.
- A second reason why having a will in place is a good idea is that the process takes much longer for your estate to be wound up. If you die intestate the government takes over the process and an executor needs to be appointed. This is usually a lengthy process and can delay matters substantially and your family will wait unnecessarily long for their share of their inheritance to be allocated to them.
- Closely related to the second point is not having sufficient liquidity in your estate. People that do not have a will usually have not made provision for liquidity. If no provision is made for estate expenses and taxes it means that these costs would need to be recovered from the estate. The result is that assets need to be sold and the family is left with a smaller estate. This delays the process and assets often get disposed of at lower values than their fair value.
- The fourth reason a will and together with that, estate planning is essential is it enables efficient tax planning in your estate. I once heard someone say “you think it’s expensive to live? Try dying.” The sad truth is except for the big expenses associated with a funeral, there are many other estate-related costs and taxes that can be a significant burden for your family. If one structures your estate in the most tax-efficient manner it will save your loved ones hundreds and thousands of rands.
- The last very important point to consider is your children. Firstly, in a will, you can state who should be the guardians of your children and thereby ensure that the people you want to look after your children do indeed look after them. A second very important point is that minors cannot inherit and by setting up a will and stating that a trust should be created in the event of your death you make sure your children do inherit what is rightfully theirs and it will be handled in the most efficient manner. Failure to do so will mean that the Guardian’s fund will decide how to handle their funds and it can bring about a massive delay for your children to receive their funds.
The 5 points above are only a few important points, but there are many more very important reasons why you should have a will and I strongly encourage you to make it a priority.