Do you own a home? …A car? …Furniture? …A pension or provident fund? A life insurance policy? A bicycle…(Okay, I’m clutching at straws here)?
Did you answer yes?
Then, by golly, you need to read this! Let’s kick off by answering…
Why having an up-to-date will is important?
An up-to-date will allows you to do three important things when it comes to financial planning:
1. It allows you to choose your heirs
2. It allows you to choose the trustees of your testamentary trust
3. It allows you to choose your executor
Choosing your heirs
What can be worse than having an ex husband or wife inherit your estate simply because you forgot to update your will?
Or maybe in your case there’s no ex but also no will?
How about having your dead beat step brother inheriting your holiday home in Plet?
A valid and up-to-date will is the only document which speaks for you when you no longer can. While you can’t choose your family, you can always choose your heirs.
Choosing your trustees
As I speak we have a client who feels that the wording of his will is a little too vague around the fixed property he owns in conjunction with his testamentary trust.
“The wording as it stands allows them to do whatever they want with the properties. I don’t want them to sell off my properties simply because it’s the easiest option.”
While you want to keep your will as simple and possible (and prevent any ‘ruling from the grave’), you do want the reassurance of knowing that your child’s best interests are taken care of.
Think about this for a moment…
If you passed away, it’s not the guardian who will be responsible for looking after your child’s finances…it’s all up to your trustees!
Choosing your executor
You might not know this but the executor is entitled to 3, 99% (that’s including VAT) of the gross asset value of your estate.
Own a property worth R1 million? Well the executor is entitled to R35, 000 thereof (and the state takes the remaining R4, 900)!
Now quite a few people like to engage in a bit of wishful thinking when it comes to appointing an executor…“Ag, I’ll appoint my son.”
It’s not quite that simple…especially when you estate is quite large. One miscalculation in the liquidation and distribution account and the executor gets to pay for his or her mistake.
In all likelihood, your son will appoint an executor to assist him anyway…so why not take that decision away from your son and make it yours instead?
What else does having an up-to-date will offer?
Your will allows you to make full use of the various estate duty deductions allowed. For instance:
- Assets left to a surviving spouse are completely free of estate duty taxes while
- Assets left to anyone else are free of estate duty up to an amount of R3, 5 million.
Would you rather leave your assets to your family or to the taxman?
Having an estate plan prepared for yourself allows you to identify ‘opportunities’ for saving on estate duty taxes.
Having an up-to-date will in place ensures that you take full advantage of these ‘opportunities’ – it’s quite simple really!
Related posts:
- Financial Planning | Why Would You Want A Trust Anyway?
- Financial Planning | Paying More For A Meal Than Your Will Document!
- Financial Planning | What Happens If You Pass Away Without A Will?
- Financial Planning | We Are Married COP And My Spouse Is Insolvent
- Financial Planning | Dying Intestate And Leaving Wife And Child Behind
Article by Lawrence
Someone, who as he gets older, finds he has more questions than answers
Lawrence has written 150 awesome articles for us at Insurance Fundi
