The importance of drafting your last will and testament

2018-09-19 06:02

DEATH is an unpleasant topic that people would rather avoid. However, by planning for your death, you can help ensure the well-being of your family and dependents when you are no longer around. It can be seen as a final act of love and is not just for people with vast estates.

South Africa’s National Wills Week 2018 takes place between September 17 and September 21 to emphasise the importance of drafting a will as part of a comprehensive estate planning process.

As a participant, Ecsponent is not only offering information but also the opportunity for you to have your will drawn up for free.

THE IMPORTANCE OF A WILL

A will can take a lot of pressure off a bereaved family during a difficult time. It removes the uncertainty and chaos by providing certainty about how your assets should be distributed.

Floris Slabbert, director at Ecsponent Financial Services, says that a will allows you some control over your assets after death instead of leaving the decision to the state.

Dying without a will, or without a valid will, means your estate will be administered in terms of the Intestate Succession Act. The most obvious, most unsettling, aspect of dying without a valid will is that you forfeit the freedom of deciding what should happen to your estate, which will then be allocated in terms of pre-determined legislated guidelines.

WHAT IS A WILL?

A will is a signed and witnessed legal document that specifies how your estate is distributed, names an executor and appoints guardians for your children.

A Living Will is a separate document from a standard will and does not refer to the distribution of the estate after your death. Instead, a living will stipulates your wishes in the event that you are incapacitated and unable to make decisions. These include what type of medical care and interventions you want to receive, such as decisions around life support, and how your affairs are to be handled in this time.

A WILL CANNOT BE DRAWN UP IF NO ESTATE PLANNING IS CONDUCTED

In addition to creating confusion, dying intestate can also create tax implications that reduce your loved ones’ inheritance, thus professional estate planning is essential before compiling your will.

“There are many considerations to take into account. For example, many people specify that their assets must be preserved for their children in a testamentary trust. However, they do not take the cost of maintaining such a trust into consideration. This can amount to significant figures and is best addressed during the estate planning phase,” said Slabbert.

DEATH AND TAXES

It is often said the only two certainties in life are death and taxes. In this case, we can go one step further and say that Sars follows you to the grave.

Without the proper planning, your estate may attract unnecessary taxes and fees. Many of these costly taxes can be minimised or even avoided through proper planning within the rules of the Tax and Wills Act.

TAX EXEMPTIONS

Neither estate duty nor capital gains tax is payable on any part of an estate bequeathed to a living spouse. There are also further capital gains tax exemptions if you do not leave your estate to a living partner. A rebate of R 300 000 is provided to a natural person in the year of their death.

There are very clear rules and conditions governing the tax implications of annuities, pay-outs from life assurance policies and lump sums from retirement funds. There are also deductible expenses, such as the funeral cost, and deductible liabilities, such as certain debts.

An estate planning professional will point out the finer details of these exemptions that apply to you.

AFTER YOU DIE

It is important to keep your nominated beneficiaries informed about your wishes and ensure they are up to date on where to access copies of your will and other important documents. Not only will it minimise conflict, but also will ensure speedy pay-outs from life insurance policies.

While the process may seem daunting, with professional help and advice, the entire process becomes manageable and you can have peace of mind that your loved ones will be looked after.

To celebrate National Wills Week, Ecsponent will be offering the drafting of free wills. Visit www.ecsponentlimited.com — Supplied.

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