Many of the people named in your last will and testament will be tasked with giving effect to your estate plan and ensuring that your final wishes are honoured. As such, it is imperative to understand the various roles and functions of each person mentioned in your will to ensure that they are suitable for the position and that their appointment is aligned with your overall estate planning intentions.
Your executor
An executor is the person ultimately responsible for administering your deceased estate. In the event of your death, your nominated executor will essentially step into your shoes and ensure that your estate is wound up to closure. In the event of your passing, your deceased estate will come into effect immediately whereafter your nominated executor is required to apply to the Master’s Office for Letters of Executorship – which is in essence the formal confirmation of the appointment. Once appointed, your executor is required to set up interviews with your family members and loved ones, draw up an inventory of assets, take assets into custody or safekeeping, advertise for creditors, and ultimately prepare a liquidation and distribution account. Keep in mind, however, that the job of an executor is an extremely onerous one that requires a special set of financial, legal, and administrative skills, so think carefully before making a nomination. The task can be insurmountable for a layperson with no experience in this field, so consider nominating a fiduciary expert to fulfil this role.
Your spouse
As your marriage contract has direct bearing on your freedom of testation, it is important to name your spouse and stipulate the nature of your matrimonial property regime in the opening paragraph of your will – although keep in mind that in the context of estate planning, a broad interpretation of ‘spouse’ is used. For estate planning purposes and when it comes to calculating estate duty, the SARS Commissioner regards ‘spouse’ as any person in a marriage or customary union, unions recognised as marriages under tenets of religion, and same-sex or heterosexual unions which the Commissioner is satisfied are intended to be permanent. For those who are married in community of property, keep in mind that upon the death of the first-dying spouse, the entire estate will be wound up and the surviving spouse will have a claim for 50% of the net joint estate. This means that the first-dying spouse should only deal with his/her 50% share of the joint estate in terms of their will.
Your minor children
In terms of our law, children under the age of 18 may not directly inherit lump sum pay-outs nor any other assets as they are deemed not to have the legal capacity nor the ability to manage such assets. As such, if you intend to bequeath assets to your minor children, you may want to consider setting up a testamentary trust in terms of your will – an effective mechanism for housing and protecting assets until minor children reach legal age. A testamentary trust, which can be formed in terms of your will, essentially comes into effect in the event of your passing whereafter any assets intended for your minor children can be bequeathed to the trust and managed by your nominated trustees. Your will can provide your trustees with a clear mandate for managing the assets on behalf of your minor children and at what age your children can receive their inheritance.
Your nominated guardian
If you have minor children, it is always advisable to nominate a guardian for them in your will. In the event of your death, the child’s surviving parent would be the natural guardian of your minor child. However, if you are the only surviving parent of your minor child, it is imperative to nominate a guardian for your child in your will. Your will can also make provision for a guardian where you and the child’s other parent die simultaneously or within close proximity to each other. When nominating a guardian, it is important to carefully consider who would be best to care for your child, taking into account their cultural background, value system, religious beliefs, location, and financial stability. The legal guardian will acquire full parental rights and responsibilities and will be required to administer any property inherited by your minor child until they reach age 18. The guardian will be required to make all decisions regarding your child’s schooling, extra-mural activities, vocational guidance, and religious instruction. The guardian will also be responsible for assisting or representing your minor child in administrative, contractual, and/or legal matters until they reach maturity.
Your trustees
Trustees play a vital role in managing and administering the assets bequeathed to your testamentary trust for the benefit of your minor children. As such, it is essential that your trustees have the appropriate financial acumen and understanding of the investment landscape. In managing the property of the trust, your trustees will have overall responsibility to manage the trust assets in compliance with the Trust Property Control Act, common law, and the trust instrument – and in doing so, will need to know and understand the scope of their powers, and ensure that they do not act outside of their mandate. Also, important to bear in mind is that trustees have a fiduciary duty in relation to the trust beneficiaries which is an onerous legal duty to act at all times in the best interests of the beneficiaries. In discharging their duties, trustees will need to take control of the trust assets, open a bank account in the name of the trust, and invest the assets for the benefit of the beneficiaries. They will also need to prepare accounts and records which must be made available to the Master.
Heirs and legatees
When drafting your will, it is important to understand the difference between your heirs and legatees. If you name a person in your will who would not otherwise inherit in terms of intestate succession, that person is known as a legatee. In other words, if your will is found to be invalid, a legatee is someone who would not benefit from your will under the laws of intestacy. On the other hand, an heir is someone who is able to inherit via either testate or intestate succession, such as a spouse, child, or sibling. For instance, if your will is found to be invalid, your heirs would still receive their inheritance in accordance with the laws of intestate succession, keeping in mind that your spouse and children will always benefit first. The importance of understanding the difference between the two is because, after settling all the costs in your estate, your executor must pay your legatees their bequests first whereafter the residue of your estate will be distributed amongst your heirs. It is therefore essential to ensure that there is sufficient liquidity in your estate after any bequests have been paid to your legatees to provide for your heirs as you had intended.
Witnesses
Anyone over the age of 14 and who is of sound mind can witness your Will. Your witnesses are legally required to sign your Will in your presence, and vice versa. If you and your two witnesses did not sign at the same time and place, your Will can be rendered invalid. Remember, your witnesses are not required to read or understand the contents of your Will. Their job is to attest that you signed the Will in their presence. While it is a legal requirement that you sign the last page of your Will in the presence of two competent witnesses, both you and your witnesses should sign in full on each page, and to ensure that your Will is dated. Importantly, a beneficiary or the testator’s spouse should not sign as witnesses to the Will as this could disqualify them from inheriting from the Will.
Have a wonderful day.
Sue
