In these uncertain times, it is crucial for us to get our affairs in order, just in case the worst should happen. What exactly does this mean from an estate planning perspective?
Estate planning can be daunting; the process might not only seem complicated and confusing, but it can also be unpleasant, causing people to put off the task. Even though the topic of estate planning can be a difficult one, it is not as difficult as the situation your loved ones may be left in if you don’t have an estate plan in place.
Here’s the good news: With the expertise and assistance of Greeff Attorneys, estate planning doesn’t have to be stressful or depressing, and the sooner you get started, the better off you and your family will be.
The following documents are essential for your estate plan:
- Last Will and Testament (and a Testamentary Trust in the case of minor beneficiaries);
- Living Will;
- Power of Attorney (where applicable).
LAST WILL AND TESTAMENT
This is one of the most important tools in any estate plan. Every client should have a Last Will and Testament, which is reviewed and updated on a regular basis. A carefully structured and written Last Will and Testament can meet many of your goals – including but not limited to providing for dependants, reducing estate duty liability and achieving the efficient administration of your estate.
Should you die without executing a valid Will, the laws relating to intestate succession will apply and consequently your executor of choice will not be appointed. The Master of the High Court will require nominations from interested parties and will appoint an executor based on these nominations. This may cause a delay in the winding up of your estate. In addition, the Master may require the executor to provide security which may create an unnecessary cost for the estate and further delay in having to raise security.
Should you die intestate, or should you have died without making provision for a Testamentary Trust in your Last Will and Testament, any funds bequeathed to a minor child will be held by the Guardians fund, which funds are not freely accessible. It is therefore advisable to create a Testamentary Trust in the Will to provide for minor beneficiaries, to prevent any bequests to a minor being dealt with by the Guardians fund.
While it may seem very attractive in economically challenging times to draft your own Will, one does not always realise its implications and consequences. A person who drafts a Will without the necessary expertise may unwittingly draft an invalid Will. Furthermore, a person without the requisite knowledge of drafting a Will may draft ambiguous clauses which could subsequently result in lengthy and costly legal proceedings arising between loved ones.
The time may come when you can no longer make decisions about your future. A Living Will is a document that sets out your health care wishes should you become unable to communicate or make your own medical decisions. It lets doctors and your family know which life-sustaining medical treatments you want or don’t want.
How is a Living Will different from a Last Will and Testament?
A Last Will and Testament prescribes how your assets should be divided when you pass away, while a Living Will sets out the medical care preferred while you are still alive, but unable to competently express your wishes.
7 Reasons why you need a Living Will:
- A Living Will speaks for you where you are unable to do so yourself;
- It spares your loved ones from making life or death decisions;
- The document will let you have a say in specific medical procedures;
- It allows you to have your say with regards to organ donation;
- It can assist in settling disagreements amongst family members and medical professionals regarding appropriate treatment;
- It alleviates the financial burden on your family. Where there is no reasonable prospect of recovery, being put on life support can be extremely expensive, which could place a substantial financial burden on your family;
- It gives you peace of mind.
POWER OF ATTORNEY
A Power of Attorney is a notice by way of which one person, known as a principal, appoints and authorises another person, known as an agent, to act on their behalf and make decisions for them. This can be for specific matters (Special Power of Attorney) or for all matters (General Power of Attorney).
It is a common misconception that a Power of Attorney will suffice in an instance where an individual becomes mentally incompetent due to an illness, stroke, dementia etc. This is, unfortunately, not the case as the Power of Attorney becomes invalid the moment the principal of the Power of Attorney can no longer exercise their judgement.
A Power of Attorney is a valuable tool which enables you to make important life decisions when you are absent or become too frail to sign documents physically. It is important to understand the scope and limitations of a Power of Attorney and how it can affect you after certain life events.
In closing, there is an old Chinese proverb that says: “The best time to plant a tree was 20 years ago. The second best time is now”. It’s never too early to get your affairs in order, but it may be too late if you don’t act now.
Don’t Procrastinate! Communicate! with Greeff Attorneys.
This article was written by Nadine Barnard, consultant at Greeff Attorneys.
Disclaimer: The material contained in this document is provided for general information purposes only and does not constitute legal or other professional advice. We accept no responsibility for any loss or damage which may arise from reliance on information contained in this article.
 Pheasant v Warne 1922 AD 481 with reference to Molyneux v Natal Land Company 1905 AC 555