You are Here > Home > Financial Sense > Would you pay more for a restaurant meal than a Will?

Would you pay more for a restaurant meal than a Will?

Oct 28, 2011

It would appear that some South Africans are prepared to pay a couple of hundred rands for a restaurant meal, yet are not happy to pay an expert the equivalent to draft their Will, a vital document that speaks for you when you are gone.

Recent affluent[1] and high net worth[2] market research commissioned by Glacier Fiduciary Services, a division of Glacier by Sanlam, revealed a huge disparity in market perceptions and expectations.

Ninety-eight percent of respondents had a Will. However, only 33% overall said their Will was updated in the last year (39% HNW; 28% Affluent)

  • 21% updated it one to two years ago;
  • 21% updated it three to five years ago; and 25% updated it more than six years ago
  • (17% HNW; 32% Affluent).

Nominated executors are most commonly relatives (29%) or banks (25%) and attorneys are more commonly used by HNW individuals (22%) than affluent individuals (8%).

When asked who drafted their Wills, an alarming 17% said that they had drafted their own Wills or a relative had drafted their Wills. The majority (63%) had Wills drafted by their attorneys or accountants.

The respondents were asked how much they paid for their Wills and how much they would expect to pay today.  The fees paid ranged from nothing (44%) to between R15,000 and R20,000 (2%).  15% of respondents paid less than R1,000 and the balance (20%) paid between R1,000 and R15,000.

Those who paid less than R1,000 are likely to fall into the category of people who have not updated their Wills for a very long time. The research also revealed a disparity between what people paid, and what they would expect to pay now.

As regards what they expected to pay today:

  • 20% said that they expect a Will to be for free
  • 18% expected to pay less than R1,000
  • 8% between R1,000 and R2,500
  • 28% expect to pay between R2,500 and R5,000
  • 12% expect to pay between R5,000 and R15,000.

The glaring difference between clients’ perceptions was highlighted in their answers to the following questions. Firstly, the respondents were asked why they would not expect to pay for a Will.

“I did not pay for my Will as part of the service of a private bank client and the bank will make money out of the estate when they have to wind it all up one day.  However, I did expect to pay for it!

 “It is part of the bank service. Banks and all financial institutions make so much money from their clients, the least they can do is to provide a free Will. After all, it takes only one hour to ’cut and paste’ in preparation for Wills.

“A Will should be part of the service I am being offered either by my private banker or my financial adviser.  The cost of the Will should be included in the fees that I pay my private banker or financial adviser every year.”

But when the researchers asked, “How do you feel about people who are willing to pay more for a restaurant meal than a Will?” The response was very different.

You’re being stupid because you are gambling with lots of money.  You don’t want the family to sit with problems after you die.  You get what you pay for.  Cheap/free Wills are not worth the paper they are written on.

“It would then appear as if there is no value perception to the Will.  Wills usually need specific tailoring when assets are involved and the various beneficiaries and not just the run of the mill type Will.  If it is simple and a standard template type of Will with no effort put into it, then it could be a modest meal.  But I think it is foolhardy.  I am willing to pay far more for a Will than a meal because I want proper professional advice that I can trust regarding tax consequences, asset details, etc.”

Regardless of whether you are paying R10,000 for your Will or if the cost is included in other fees you are paying to your adviser, just make sure that it is drafted by a properly qualified expert in Will drafting, estate planning and the related tax issues.

Furthermore, don’t be misled into thinking that a relatively small estate necessarily requires less Will drafting complexity or is easier to wind up when you pass on, than a large estate. A R3.5 million estate with private company shares, children from two marriages and a usufruct attached to a property would be more complex than a R20 million estate with equities, cash and a house.

By Tanya Cohen, Head: Fiduciary Services at Glacier by Sanlam, and FISA member

 



[1] Annual income R360K – R1.6 mil plus net investable assets of R3.5 mil – R7 mil OR gross estate value R7.5 – R19.9 mil

[2] Annual income R1.6 mil+ plus net investable assets of R7 mil+ OR gross estate value R20 mil+

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Maya Fisher-French author of Money Questions Answered

Previous Articles

It’s time to spring clean your finances

“When you don’t know where your money is, when you have no filing system for your important documents, when you dive into your pocketbook to pull out crumpled bills, when your car looks like a garbage can, when your closets are filled with junk and clutter you cannot...

Self-service facility for GEPF members

Technology is making it easier for GEPF members and pensioners to keep track of their pension information and claims process. By downloading the new GEPF self-service mobile app onto your device, you can remove the frustration of standing in long queues at GEPF...

GEPF establishes complaints handling office

If you are struggling to get your claims processed or not receiving your benefits, help is at hand with the recent establishment of the Government Employees Pension Ombud (GEPO). The state is the largest employer in the country, and the Government Employees Pension...

More households supporting unemployed family

For many working South Africans, the pressure of financially supporting friends and family is unrelenting. Most of us have either experienced a job loss or have a family member who lost an income due to the extended Covid-19 lockdown. It is not surprising then that...

What is screen scraping and is it safe?

Screen scraping can be used by criminals to steal data, but financial services companies are increasingly making legitimate use of this too. Angelique Ruzicka investigates what the process entails and how consumers can protect themselves. Screen scraping can be hugely...

Are banks putting customers first?

Banks were in the spotlight recently with the release of the annual report by the Ombudsman for Banking Services (OBS) and feedback from the Financial Sector Conduct Authority (FSCA) regarding the banks’ adherence to the Conduct Standard. The draft Conduct Standard...

Should women celebrate community of property rights?

There has been much celebration around the protection of women in customary marriages with President Ramaphosa recently signing into law the amended Recognition of Customary Marriages Act. However, are these women fully aware of the implications, especially around...

Five tax myths many employees still believe

Tanya Tosen, Tax and Remuneration Specialist at Remuneration Consultants, addresses five tax myths that have become popular over the years. Many employees don't understand the complex tax calculations that payroll applies to their earnings each month and often...

Relief for struggling restaurants

Soft loans and payment holidays are available for restaurants still battling to survive the pandemic. At the beginning of May, my favourite local coffee shop closed its doors after 20 years of trading. My neighbourhood shopping centre, which caters to many “mom and...

Money and divorce

David Thomson, Senior Legal Adviser at Sanlam Trust, shares some practical tips about the financial side of divorce. The news of Bill and Melinda Gates filing for divorce after 27 years of marriage sent shockwaves through the philanthropic world. The couple is worth...

Pin It on Pinterest

Share This