According to research by Sanlam, 75% of South Africans do not have a will. Nearly half of those who don’t have a will believe they don’t own sufficient assets to make a will worthwhile, but you’d be surprised at the family fights that can ensue over a small estate.
And then there are those who know that they need a will, but admit that they have just not gotten around to writing one.
The law provides that if you die intestate – which means without a valid will – your estate will be paid to your family according to a set formula.
While this may sound sufficient, it is an administrative nightmare and starts major family fights. It also significantly delays the winding up of your estate which could take years.
By having a simple will in place you can decide how your assets will be distributed, which means that you can provide for your loved ones in the best way you see fit.
Your home can be the source of family fights
For most middle-class families, the primary home is the most valuable asset in their estate as your retirement funds fall outside of your estate. It is fairly common for parents to leave the family home to their children. Yet without a properly constructed will, this legacy could create a financial nightmare.
The first question is whether the property is yours to bequeath to your children. There are many cases where spouses may be separated but not divorced. In this case the marriage regime would still apply.
For example, if the deceased was married in community of property, the surviving spouse effectively owns half the property and only the half that belongs to the deceased can be bequeathed to the children.
If the property is not sold it must be transferred into the heir’s name. If you plan on bequeathing the property, do you leave the property to one child or share it equally among all children? This is an important conversation to have with your children now to avoid family fights later on.
What if one child wants to live in the property and another child wants to sell? Are all the children able to pay for the running costs or will it fall to only one child to pick up the bills?
Then there are costs to transfer the property. Can your children afford to pay for these expenses, or have you left enough liquidity, such as life cover, to provide for the costs?
It is worth having these conversations as a family. The last thing you want is a legacy to create financial complications for those you love. The best way to do that is to make sure you get that will in place.