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Press release: FISA advises on wills

FISA issued the following information to the media recently.

FISA advises the public on wills

The Fiduciary Institute of South Africa (FISA) welcomes the recent “national wills week” initiative by the Law Society of South Africa as a means of encouraging every South African to have a will. This initiative is now an annual event during which some LSSA attorney members nationwide offer to draw up wills for the public free of charge.

 John Gibson, FISA Chairman, says: “FISA believes every South African should have a will. We strongly advise against do-it-yourself wills as the process around wills can be complex and needs further consumer education. The following are just some of the issues to be aware of when having your will drafted.”

 Updating your existing will can be just as important as drafting a new will. This is because people you expected to inherit may have died, your own personal and financial circumstances may have changed (such as marriage, divorce, retirement or retrenchment) and even the nature of your assets may have changed (assets held in a company or close corporation may now be in the process of being re-registered in your own name following the SARS amnesty on these transfers). Factors such as these can make the updating of your will critical.

Some of the heirs you are appointing may now be non-resident in South Africa. If the heirs have not formally emigrated, but are living abroad as citizens of another country, they will need to regularise their emigration standing with the Reserve Bank before their inheritance can be paid to them. This can delay the winding up of an estate.

When deciding on an executor and / or a trustee for any will trust (also known as a testamentary trust, usually created to accept assets for the care of minor children) you intend creating in your will, have you probed their ability to deal with estates and will trusts? Ask questions such as how long have they personally done this type of administration work, how many matters do they attend to, what qualifications do they have, what are their turnaround times, and what fees do they charge? In the case of a trustee for a will trust, you should also ask if they have investment management expertise to look after the assets you will be leaving in the trust for the ultimate benefit of your heirs.

Has the person drafting your will investigated the estate duty, capital gains tax, and liquidity aspects of your estate, and planned the will accordingly? For example, is there enough cash available if you were to die today to pay off mortgage bonds, last illness debts and any other outstanding or future debts such as conveyancing fees, and estate administration costs?

Are there any offshore assets / liabilities to be dealt with? Who will inherit these assets and have you taken the implications into account around ownership of assets offshore? Have you placed the same facts on record with the Reserve Bank? A single will can deal with your offshore estate as well as your local estate. However, depending on the complexity of your offshore estate, you may wish to have a separate will appointing a trusted executor in that jurisdiction. Care must be taken to ensure no conflict with your local will.

How are you married and what implications does this have on the rights to assets of your spouse? For example you cannot give away more than half of your assets if you are married in community of property, as your spouse has an undivided one-half share of ownership of those assets even if they are not registered in his or her name. If you are married by antenuptial contract, there is an accrual calculation claim to be worked out, which also impacts on the distributable estate.                          

FISA recommends that you raise all the above issues, as they apply to your personal circumstances, when having your will drafted. Remember also that if the value of your estate is not large, this does not necessarily mean that its administration will not be complex.

 Complications can arise due to the nature of the assets and liabilities, the liquidity of the estate and obligations of the deceased, for example the division or disposal of assets, maintenance payments to former spouses, minor children or business relationships.

If you are unsure about whom to approach to draft your will, visit the FISA website at www.www.fisa.net.za for a list of members who are obliged to adhere to certain minimum standards.

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