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- Hilary Dudley, managing director of Citadel Fiduciary says, "Many of life's circumstances may require more sophisticated levels of estate planning.
- Dudley details eight considerations when drafting a will.
- She says divorcees must remember to update their wills and remove any inheritance to their ex-spouse within three months of getting divorced; otherwise they will inherit.
We probably don't think about it as we should, but drafting a will, in a way, equates to resting in peace.
It helps to take these decisive steps to avoid your precious estate from being in wrongful hands.
To avoid family or business partner drama, making this decision while alive and leading from the grave is better.
Hilary Dudley, managing director of Citadel Fiduciary, says, "Many of life's circumstances may require more sophisticated levels of estate planning that is both organic and adapts to changing circumstances and complexities in the family."
Dudley details eight considerations when drafting a will.
1. Your partner
It's essential to consider your life partner – whether you are legally married. If you are legally married, you have various legal support and maintenance duties. It's essential to know in which marital property regime you are married when planning your estate.
2. Life partners
Permanent life partnerships and cohabitation are interesting areas of the law, with some grey areas. Some laws treat a permanent life partner the same as a legally married spouse, while others do not, which causes uncertainty. For instance, the tax laws and the Pension Funds Act will treat a permanent life partner as a spouse, but the Maintenance of Surviving Spouses Act does not.
3. Divorce
Remember, you must update your will to remove any inheritance to your ex-spouse within three months of your divorce. Otherwise, if you die without updating your will, you will be deemed to have still wanted your ex-spouse to inherit. If you die within three months of your divorce and have not yet changed your will, your ex-spouse will be treated as having died before you and disregarded. If you are remarried, consider balancing your wish to benefit your new spouse and children from your first marriage.
4. Business partners
Talk to your business partners about what will happen to business shares should you die, as you presumably do not want to do business with each other's families after a death. The company documents will often dictate what happens to shares in a company at the end of a shareholder, but if you have another form of business, you may need to have some agreement.
5. Pension and life insurance policies
Pensions and life insurance policies require nominated beneficiaries. You will not be able to govern the disposition of those policies in your will, so it's important to update your policies as soon as possible.
6. Your descendants
Remember, grandchildren or children under the age of 18 cannot inherit as they do not have legal capacity, so you should cater for them by way of a trust to avoid their inheritance being paid into the Guardian's Fund, which falls under the administration of the Master of the High Court.
Professional help is essential to plan for and manage the inheritance of special needs heirs or heirs who suffer from addiction issues or cannot manage their money.
7. Family trusts
It's important to plan if you might inherit from a parent. Ask them to place your inheritance in your family trust. Vice versa, if your children have their own family trust, consider bequeathing their inheritance to their trust. Very importantly, include existing trusts in your succession planning, for example, by nominating a trustee to succeed when you can no longer act as such and making bequests to the trust. There are tax implications regarding distributions from trusts to individuals living abroad, which you need to consider.
8. Plan for various scenarios
Remember, if you support your ascendants – your parents or grandparents – and you pre-decease them, it will be important to ensure they are looked after. If your parents are indigent, you must maintain them legally. In a calamity where your entire immediate family dies, you could bequeath your estate to your siblings, other family members, friends, or a charity you support. Bequests to
SARS-registered charities are exempt from estate duty.
