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Category:
Insurance
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Life Insurance
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Sanlam Trust /
Wills and
Estates
Addenda to a
will (codicil)
Avoid any addenda to a
will, since it carries risks. The law sets strict requirements
to which one must comply and which could cause both the will and
addenda to be invalid.
Description of all assets
It
is not advisable to try and describe all your assets in your will.
You risk leaving out assets obtained later.
Describe only those assets that will be bequeathed to specific heirs
and bequeath the rest of your assets in set proportions to specific
heirs.
Ambiguous terms
Terms such as "cash" and "movable goods" should not be used
unqualified in a will, since this may be interpreted in different
ways. This could lead to serious problems and fighting amongst
heirs.
Complex business affairs
It
is important that you make provision for the transfer or
continuation of your business after your death.
This
should ideally happen while you're still alive and by way of
agreements with partners and shareholders. It is vitally important
that agreements must be in writing and not be only verbal. Verbal
agreements are very difficult to prove after the death of one party.
Unfinalised contracts
Your death does not mean the end of contracts entered into before
you died, unless it was a contract of a personal nature that
requires your personal skills.
In
all other cases, the executor of your estate is bound to your
contracts. It may be necessary to grant express and specific
authorisation in your will to the executor in order to execute
contracts.
Insolvent heirs
If
some of your heirs are insolvent at your death, their inheritances
will form part of their insolvent estates and will be used to pay
creditors.
To
avoid this, the benefits should not be bequeathed directly to the
heir, but to a discretionary testamentary trust to be administered
to the benefit of such an heir until rehabilitated. This way, the
heir's inheritance will be safeguarded for him and his children.
Accrual claims
If
you and your spouse are married under the accrual system, the spouse
whose estate accrues the least in value during the marriage will
have a claim against the spouse whose assets grow the most.
The abovementioned claims is handled just like any other claim
against the estate of the deceased. It is critically important that
you plan your estate accordingly.
If
the heir refuses
Much has been said about wills being your last word here on earth.
They could also be described as a manual for the execution of the
last wishes of the deceased. This is not wrong, but what about the
wishes of the heir? How does this affect him or her?
Normally one doesn't hear from those who inherit, that they complain
or get involved in court cases. It may sound strange to say that a
person does not need to accept an inheritance, but it can happen -
usually for financial reasons. It is known in legal circles as
doctrine of election. In more fancy language it is known as adiation
(acceptance) and repudiation (refusal) of the inheritance as set out
in a will.
To
use an example: a father bequeaths certain assets to his son or
daughter, but places a certain obligation on one of them, such as to
stipulate that the heir must give a part of the inheritance to
another member of the family.
In
short, the doctrine of election makes it possible to receive
something in exchange for the heir paying or giving something to
another person. This is when the heir has the choice of accepting or
refusing his inheritance.
If
a man and a woman are married in communion of property, for
instance, and have a house worth R500 000 and an investment of R800
000, everything is usually divided equally.
When the man says he bequeaths his entire estate to his wife, he
actually says he is bequeathing half of the estate to his wife –
thus half the house and half the investment. The other half already
belongs to her according to their marriage contract.
But if he says he bequeaths the house to their child, he can only
bequeath half the house. The intention is that the child should get
the whole house, but then he has to ensure that his wife is in a
position in which she can do without her portion of the house. If
not, the child cannot get the full house, since his wife owns half.
Their will has to stipulate that his and his wife's portion of the
house is bequeathed to the child and that the balance of his estate
is bequeathed to his wife – that is, half of the investment.
Remember, half of it belongs to her already.
When the estate is administered, the wife has to elect. She could
either accept or decline the will. She should choose between
foregoing half the house, in other words foregoing R250 000 in value
in order to get her husband's portion of the investment, namely R400
000. She can't do both – she has to choose: either the house or the
investment.
It
is however not that simple: If she says no, she does not accept the
will and loses all benefits therein, because she has refused the
will. There is therefore no heir for the rest of the estate (the
R400 000 investment). At this point, the Intestate Succession Act
comes into play, which determines how the rest of the estate will be
dealt with. In other words, the law determines what will happen to
the husband's share of the estate.
In
such a case, the wife will get the greater of a child's portion or
R125 000. The number of children plus one determines a child's
portion. In this case, there is only one child, so the estate is
divided into two. The son thus inherits, intestate, R200 000 cash
and the wife the other R200 000.
Complex Wills - Page 1
The
Difference Between An Income Beneficiary Of A Testamentary Trust And
A Usufructuary
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