Only around 30% of people who write up a will actually sign it, but an unsigned will can cause major family dramas.
The only things certain in life are death and taxes, as Benjamin Franklin famously said. We will all die at some point, and when we do, our estate will end up paying fees and taxes.
While we can never cheat death, by drawing up a will and doing some basic estate planning we can provide for these fees and taxes, and even reduce some of them, leaving more of our assets as a family legacy.
If you don’t have a will, the implications for the family you leave behind are significant in terms of unnecessary expenses and delays, yet most South Africans do not have a will.
Even a simple will can protect your family, but Alex Simeonides, CEO of wills administrator Capital Legacy, says that only around 30% of people proactively sign their will.
This means that around 70% of people who go to the trouble of writing up a will often fail to sign it ‒ or require multiple reminders to do so.
Simeonides says sometimes the reason is simply that people don’t have access to a printer to print out their will, but more often there is a psychological resistance to putting your final wishes down on paper.
“Despite multiple reminders by the advisers, people are still reluctant to sign,” says Harry Joffe, head of legal at Discovery Life
An unsigned will: valid or not?
An unsigned will is not only an administrative nightmare but can also cause major family feuds.
Technically an unsigned will is not valid, but if the will was professionally drawn up, the administrator can approach the high court to rule the will as valid ‒ but this comes at a significant cost to the estate and will delay the winding-up of the estate.
Simeonides says family members who are not happy with the content of the unsigned will could argue for the estate to be processed under the intestate act which determines the benefits based on a set of rules. This may not be the intention of the deceased.
Apart from superstition, another reason people may delay signing a will is because they are over-thinking the process.
A will is often seen as a message left to loved ones and we may spend too much time over the details. At least start with a simple will that gives the executor some direction as to how to allocated the estate to your heirs. You can always update your will at a later stage.
Also discuss the will with your family. If you have made a decision to leave more funds to one child, for example because they may be younger or in more need, tell your family upfront. These discussions and explanations will make it easier for you to formalise and sign the will.
Avoid these mistakes when writing a will
Don’t include your retirement fund in the will
The payment of retirement funds are not determined by the will but by the trustees of the pension fund. “We have seen cases where a will stipulates that a retirement fund must be paid to one child and not the other. The trustees of the pension fund must consider the financial and legal dependency of all the children,” says Joffe.
An incorrectly written will can cause trouble within the family and lead to incorrect estate planning.
It is worth noting that a living annuity (purchased at retirement) does not fall under the Pensions Fund Act and one should nominate specific beneficiaries on the policy.
Make sure you align your policies with the will
Simeonides is dealing with a case where the deceased left his home and assets in a trust to his minor child. However, his life policy nominated his girlfriend as beneficiary with the request that she would use a portion of these fund to settle the mortgage on the property. She was not bound by the will and kept the full benefit which meant the estate must liquidate and sell the property to meet the mortgage obligation.
“It is important that you have specific life policies to settle any outstanding debt or to provide for specific beneficiaries,” says Simeonides.
Joffe says there are often cases where the deceased has nominated a person on the life policy yet stipulates a different person as beneficiary of the policy in the will.
“As a life company we must pay out according to the life policy nomination. Again, this can cause family arguments,” says Joffe. The only time a will has relevance to the beneficiaries of a life policy is if the estate is the beneficiary. The estate is then governed by the content of the will to pay out the funds.
Don’t rule from the grave
Joffe says it is not unusual to see parents ruling from the grave and including clauses that require children to graduate with a degree before they can inherit.
“We currently have a case where one of the children is just not university material and he is unable to inherit his portion,” says Joffe.
There are, however, situations where a parent may have reason for concern such as a drug addiction. In this case a clause keeping the funds in trust unless the child is fully rehabilitated would be a reasonable request.
Don’t nominate minor children on a life policy
There are laws governing how funds can be distributed to minor children. An estate may not pay out directly to a minor child, but a life policy must pay out directly to the child’s bank account.
“As the child is still young, this can often end up in the wrong hands and the funds are used by other family members,” says Joffe who recommends that all parents include a testamentary trust in their will.
This trust only comes into effect on the death of the parent/s and the funds are protected for the benefit and support of the child. In this case the estate would be the nominated beneficiary of the life policy and the proceeds paid into the trust.
What makes a will valid
For a will to be valid in South Africa it has to adhere to the requirements as set out in the Wills Act 7 of 1953. These requirements include that:
- A person must be over the age of 16 years.
- The will must be signed in ink (wet signature).
- The will must be signed by the Testator/Testatrix, on each page and at the end.
- The signing of the Will must be witnessed by two competent independent witnesses, both present at the same time, who sign on each page and at the end of the Will too. The independent witnesses must be 14 years or older, be mentally capable of providing testimony in court at the time of signing, not be mentioned in the will, and not be the spouse of anyone who has been specified in the will.
This article first appeared in City Press.