Every year, thousands of families are left in difficult financial situations as a result of their loved ones not having put in place adequate estate planning in the event of their death. It is estimated that as many as three-quarters of South Africans admit to having no form of estate planning in place.
If you have any property or financial assets such as life insurance, shares or cash, it is advisable to draw up a will to ensure that your assets are properly distributed when you die.
Many people believe that if they are married, their spouse will automatically receive everything in the event of their death. But if you don’t have a will in place at the time of your death, then you die ‘intestate’, which means the Master of the High Court needs to intervene. Generally, this means that your spouse and children will receive the assets. However, this can be a drawn-out process which could be avoided.
Funds solely in your own name may also be frozen by the Master until the matter of your assets has been resolved, potentially leaving your family struggling financially, especially if you are the main breadwinner.
For parents, there are other important aspects that need to be considered when planning their estates, including trust funds and the guardianship of the children. Without these issues being clearly stipulated, guardianship of any dependants would be left to the courts to decide.
People who don’t have dependants may believe that there is little need for them to be concerned about estate planning. However, it is important to note that making a will is not just about deciding who gets what. Part of the process of estate planning is the ability to nominate a power of attorney for both your finances and your healthcare. One can also create a living will explaining exactly what kind of care you wish to receive should you become unable to make that decision. Regardless of how wealthy you are or how many dependants you may have, ensuring that the right person is appointed to make healthcare decisions on your behalf should you become incapacitated is crucial.
Author: Tiffany Boesch CA(SA) is group financial director of PPS