There are many important reasons why you should make a will. Here are 6 of them:
- You decide how your assets will be distributed on your death
If you don’t make a will, an intestacy situation arises. This means Your estate will be distributed in accordance with the Succession Act, 1965. This is very unlikely to be as you might want it.
Also, who can administer your estate will be dictated by Court Rules. Again, this may see a situation arise where someone you would not want will be looking after your affairs after your death.
- Children-a will allows you to provide for children and the special needs of a loved one
This is especially important when you have minor (under 18) children. Also, with Minor children you will need to consider the need to appoint guardians and/or trustees.
These are people who will look after your children’s assets until they come of age and will make decisions about their health, religion, education etc. if both you and the other parent are involved in a catastrophic accident and pass away at the same time. You may also wish to set up a trust.
- Smart tax planning- a will can ensure the minimum amount of tax going to the State, unlike in an intestacy situation where there is no discretion
- It is cheaper and faster to administer your estate with a will, rather than an intestacy
- You choose who handles your affairs on death rather than having the law decide
The person you choose will be your executor. If you do not make a will the rules of Court will determine who is eligible to administer your estate.
- Peace of mind-the peace of mind that comes from knowing that you are not leaving problems behind for your loved ones when you pass away is priceless
This is the most important reason for most people.
Some Important questions to consider
- Should you appoint more than 1 executor?
It can be a good idea to appoint more than 1 executor (an executor is the person who administers the estate of the deceased)
- Gift over clause-do you need a “gift over” clause to benefit your grandchildren in the event of your child predeceasing you?
Without this clause in your will whatever you had decided to go to a predeceased child will go to his/her spouse. You may not want this and prefer that it go to his/her child(ren). If that is the case, you need to make provision for this in your will.
Common mistakes when making a will
Some common mistakes when making a will include:
- Alternative executors-if you appoint alterative executors your will fails for uncertainty
- A witness or his spouse cannot benefit under the will
- A will is revoked by marriage, but not by divorce
- Lack of clarity causing the will to fail-if a will is poorly worded and the intention or meaning is unclear this can cause the will to fail. And before it fails a dispute may well have arisen as to the meaning or intention of the words in the will and this can lead to an expensive legal dispute with the estate being diminished to pay legal costs.
Trusts
A will trust allows you to put assets into the ownership of trustees for the ultimate benefit of someone else. Trusts can be very useful for different reasons, for example, in protecting assets you wish to pass to a loved one who has had their financial difficulties. Your bequest may be at the mercy of creditors and creating a trust is one way to make provision for this scenario.
Learn more about will trusts here.