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WHAT WILL HAPPEN TO YOUR FAMILY WHEN YOU ARE GONE?
By Angélique Visser
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Many of us have drawn up a list of actions for the next month and more often than not, a number of the things on the list move over to the following month, and the next and the next. However there are some things on the list that could have dire consequences if they are not done sooner rather than later. Providing for your family in the event of your death is one of them.


This is not a pleasant subject to dwell on and most people would prefer not to think about. As unpleasant as it may be to think about this eventuality, the responsible thing to do is to put measures in place and experience the peace of mind that comes with knowing that your family will be well provided for should you pass on. Death and taxes cannot be avoided, and neither should drawing up a Will. A Will is often something that is put off for a rainy day, but fulfils the important function of determining how your assets are distributed after death.

Dying without a Will has serious implications for those closest to you. According to the Law of Intestate Succession, beneficiaries will be chosen according to legislation. The law will determine your closest blood relatives and distribute your assets accordingly. You may not have chosen the same beneficiaries as those determined through the legal process and the people closest to you may not benefit as they should. It makes more sense for you to dictate how your will be drawn up according to your wishes rather than to let rigid laws take effect.

The following complications could result from not having a Will:


The court may appoint someone you would not have approved of to be your executor
A minor child’s inheritance might suffer, since anything he is entitled to receive will have to be transferred into cash and placed in the Guardian’s Fund with the Master of the High Court until the child turns 18. This could mean that the family home might have to be sold, to convert it into cash, which is quite possibly something you would never have chosen to happen.
If you have no immediate or close family, then distant relatives, rather than close friends or a life partner may claim the inheritance.
Without a Will, you increase the likelihood of conflicts, bitterness and after-death disputes between your children and other family members and your estate may then take years to wind up.

In terms of the new Children’s Act of 2005 (Act No. 38 of 2005), parents must nominate guardians for their children in their Will in the unfortunate event that both parents die around the same time. Failure to appoint a guardian for your child, in the event of death, could result in the wellbeing of the child being neglected. With no-one to look after your child’s inheritance, there is a danger that they could fall into the wrong hands. Again many people do not see this as a possibility but it does happen.

The guardian’s responsibilities include administering and safeguarding the child’s property interests and assisting or representing the child in administrative, contractual and other legal matters. The person to be appointed as a guardian must obviously be someone that you trust and who you are certain will they do the best for your children as the guardian will be able to make important decisions for your child. The guardian can give or refuse consent required by law in respect of a child, including consent to the child’s marriage, adoption, departure or removal from South Africa or application for a passport.

Another option is to set up a testamentary or Inter Vivos Trust of which the child is the beneficiary. A trust can be set up for the benefit of your child during your lifetime and can serve as a very useful estate planning tool for the child when he or she needs to consider his or her own estate planning after you have passed on.

You can also make provision for a trust to be set up before your death to provide for minor children or a spouse who cannot take care of their financial affairs. Reputable trust companies can draft, register and administer the trust assets. For example, a share portfolio may be bequeathed to a trust, whereby the trustees will manage the portfolio for the benefit of the trust beneficiaries, who may be minor children. Trusts also serve to minimise estate duty payable on your estate since the assets held in a trust do not form part of the estate of the beneficiary and cannot be subject to estate duty.

But Wills and trusts are just a portion of the estate planning process, which plays the role of developing a holistic plan to benefit everyone after your death. You should consider speaking to an estate-planning expert to investigate what options are most suitable to your circumstances. Proper estate planning is especially necessary if you have growing wealth which is likely to give rise to an estate worth more than R3,5 million, as well as life insurance and employee benefits, or if you have been involved in more than one marriage or relationship as multiple relationships may result in obligations to various children.

Also having your own business may have a significant impact on your personal affairs. Estate planning considers issues like how a business is structured, whether business creditors could attach personal assets as well as tax implications on your personal affairs.

It is also important to ensure that your estate will provide sufficient cash to settle debts. If this has not been provided for, family members may find themselves having to provide cash themselves or having to sell assets to generate the cash needed.

If you have assets offshore, estate planning also looks at your global position. Ultimately, the goal of estate planning is to develop a holistic plan for an individual.

Should you need any assistance to assess your individual situation please contact us in this regard.

Fiduciary regards,
Angélique Visser

Email: avissser@fnb.co.za
Cell: 082 565 3565
 
 
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