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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.
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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:
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The court may appoint someone you would not
have approved of to be your executor |
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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. |
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If
you have no immediate or close family, then
distant relatives, rather than close friends
or a life partner may claim the inheritance. |
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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.
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Women in IT Newsletter is brought to you compliments of the
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To unsubscribe, please click
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For
more information about Microsoft, visit our website: www.microsoft.com/southafrica
© 2005 Microsoft Corporation. All rights reserved.
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