National Willls

Why have a National Wills Week?

The reality is that most people know they need a Will, but statistics show that South Africans are notorious procrastinators. In a recent survey we conducted, we asked people why they haven’t got their Wills in order. The results?

• 43% of respondents said: “I just haven’t got around to it”

. • 27% said: “I’m not sure where to get my Will done”.

• 21% said: “I think it might be expensive to get a Will”.

• Only 9% of respondents said they think they don’t need a Will.

There are two certainties in life: death and taxes. Having said this, it is important to be reminded that your tax obligations follow you to the grave, but they are not buried with you. The executor of your deceased estate has the legal duty to wind up your estate. Winding up your estate may take longer than normal or preferable if you have a complex estate plan, which in itself may bring about other legal and tax problems.
Some important taxes to keep in mind when planning your estate (and last will and testament) are income tax, capital gains tax (CGT) and estate duty.
The executor of an estate has the duty and liability to ensure that all relevant tax returns (income tax) of the deceased are completed, submitted and assessed by SARS, and if applicable, being paid by the estate.
CGT is a tax required to be paid on the profit made on disposal of an asset. Before the estate can be finalised, CGT liabilities of the deceased estate to SARS will have to be paid by the executor. Payable CGT, as a liability, also impacts on estate duty.
Estate duty is a tax levied on the assets of deceased persons who reside in South Africa at the time of their death, irrespective of their citizenship. It is also levied on the South African assets of deceased individuals who lived abroad. There are, however, other taxes that may have a significant impact on your estate.

A will can be defined as a written document in which the deceased (the testator) expresses his wishes as to how his estate is to be distributed.
A person of 16 years or older may make a will on condition that he has the mental capacity to appreciate the nature and effect of his act.
A will must be signed by the testator in the presence of two or more competent witnesses who are present at the same time.
A witness to a will must be 14 years or older, must be competent to give evidence in a court of law and must be able to write.
A testator may at any time preceding his death revoke any will which he made during his lifetime. The usual method of revoking a will is by making a later will containing a revocation clause.
Testators have a very wide discretion to decide who they want to nominate as heirs.
Any person, whether natural or juristic, whether born or unborn, may be a beneficiary under a will.
A person who murdered the testator is incapable of inheriting any benefit in the estate of the deceased.
A witness to a will, a person who signed the will and who writes out the will in his own handwriting, or the person who is the spouse of such a person at the time of the execution of the ill, is disqualified from receiving any benefit under the will.

There would be quite a number of reasons why you would consider a trust. Some of them may firstly be that you require planning regarding protecting your assets, secondly that you want to control (and have the last say coming from your will) how and which assets are passed on to your heirs, and thirdly that you have minor children. In this regard two trusts to consider are living trusts (trust created by and between living persons through an agreement) and testamentary trusts (created in terms of a last will and testament).
There are two types of living trusts, namely vested trusts and discretionary trusts. The difference between these is that in vested trusts, the benefits of the beneficiaries are set out in the Trust Deed, where in discretionary trusts the trustees have full discretion at all times about how much each beneficiary is to benefit.
Testamentary trusts are created after the passing of the testator, in terms of a specific stipulation in the deceased’s will that a trust must be set up. It is usually created to hold assets on behalf of minor children. Such a trust allows for the deceased’s assets to be transferred to the trust and managed by the trustees, instead of it being sold and the money of such sale of assets being paid to the minor children on age of majority/adulthood. It is strongly advised that you obtain legal and financial advice regarding your will and planning your estate.

Wills may vary greatly because a testator may dispose of his estate as he wishes. An heir inherits all the assets and a legatee inherits a specific asset. This benefit is known as a legacy and is designated only in a will.
A usufruct is most often created by the terms of the will. The usufructuary have the right to use and enjoy the property, to the fruits thereof, usually for the duration of their lives.
The usufructuary heir can never acquire ownership of the property over which the usufructuary is granted, as the property is bequeathed to another. Unless the will indicates the contrary, the usufructuary of a property under the will is obliged to maintain the property in the condition in which the testator left it.
Fideicommissary substitution occurs where in his will a testator directs that after his death a series of successors (heirs or legatees) are to own his whole estate or a part of it, so that the bequest passes from one successor to another. The purpose of fideicommissary substitution is thus to give a testator the opportunity to nominate various successors to inherit the same property in succession.
The testator’s right to nominate in a will an executor should be distinguished from the testator’s right to dispose of his belongings and assets as he pleases. The nomination of an executor is mainly a wish expressed by the testator, but the appointment or refusal is done by the Master of the High Court.