Every September, National Wills Week rolls around – where participating law firms offer basic Will drafting for free. The crucial role of a Will should never be underestimated, and even more crucially, your Will should be fit for purpose. We've discussed the value of a Business Will (read it here) in one of our previous articles, but what about the common mistakes made in the drafting of a Will?
What should people can keep in mind when drawing up a Will – to make it easier to execute?
There are so many things to keep in mind, and this is why it is important to have your Will drawn up by a specialist. But the most important considerations are:
- Always date your will. Even though it is not a formal requirement for legality, it is important to establish which Will was your last as this is the one we need to work with.
- Nominate a professional as Executor as well as a substitute if the first choice is unwilling or incapable.
- Ensure that you have enough liquidity in your estate for estate expenses. If there is a cash shortfall, the Executor must, in all likely cases, sell assets to make up for the administration costs and liabilities.
- Make provision for a small policy to pay out to your spouse and/or loved ones shortly after your death to ensure that the costs for the funeral and livelihood does not become a burden until the estate can be wound up.
- When expressing percentages in your Will, ensure that the total equals to 100 exactly.
- Make provision for residue heirs. Even if you make special bequests for every teacup. There will always be something left which forms part of the residue.
- Ensure that the Will is specifically drafted to your needs. Not a standard system generated will.
- The witnesses may not be any person who receives a benefit in your Will or their spouses.
What do people often overlook when setting up a Will?
The general groups of people who find Wills important are new parents and people of elderly ages. The important clauses that are sometimes overlooked:
Collation – the South African Inheritance Law makes provision that anything given to your heirs during your lifetime must be deducted from their inheritance. If you wish for your heirs to receive exactly what is left to them, this legal term must specifically be excluded in your Will.
Protection of benefits – most parents do not like the idea that their children's inheritance forms part of their marital regimes (eg. In community of property) and may specifically exclude it in their Wills.
Trusts for minors – the idea of leaving everything to your children is great, but a child under the age of 18 may not inherit directly and their inheritance will then be converted into cash and paid to the Guardian's Fund of the Master of the High Court. The best would be to create a testamentary trust in your Will and nominate trustees who you know and trust to deal with your children's finances until the age you elect.
Provision for annuities and pension type products – divorced clients normally elect their children as beneficiaries for the pension or provident funds, etc. As explained, minor children cannot yet receive these funds themselves. As Section 37C of the Pension Funds Act provides that the trustees will make the calculated decision as to who will receive these benefits, it is out of the Executor's hands on what should happen to the funds. However, in some cases the trustees ask for a copy of the Will to determine whether the testator has made provision for a testamentary trust and whether provision has been made to allow the trustees to make payment to this trust.
Provision for life policies to minor children – some institutions allow for such a nomination. Practically what will happen is they will make the payment to the guardian of the children. In some cases, it is the ex-spouse of the deceased. This might not be what they wanted exactly. A clause can be brought in which allows for the funds to be paid to the testamentary trust of the minors. The best solution, of course, would be to discuss this with a fiduciary specialist and to make the correct nominations.
Guardianship – even though applications must still be made to court to be formally appointed as a guardian to a minor, it will always make it easier on families to know who the couple trusted with their children.
Farms or agricultural lands cannot be transferred to more than one person – however, allowing the Executor to create a company or trust to have this farm transferred and therein awarding the shares accordingly, is always a very important clause to remember – especially if there isn't enough cash to draft a redistribution agreement.
Are there examples of case studies where people have had issues with Wills that went 'south'?
Here are a few experiences from our Fiduciary Services team at Barnard.
Complications in Wills – Story 1:
The Will was drafted with percentages which added up to 99% (33% to the three friends each). The deceased was an orphan but vastly wealthy and had no family for purposes of the Intestate Succession Act. The Master directed us (Barnard Inc) to obtain a court order on how to distribute the 1%. The deceased died in 2018 and was only able to distribute according to the court's order in 2022 which lead to the 1% being divided equally between the friends. The court decided that the testator made it clear in his description of his friends that they were his true family. Litigation costs could have been avoided if the institution that drafted his will ensured that the percentage added up to 100.
Complications in Wills – Story 2:
A couple had a Will in which they left everything to their "two daughters" – the daughters were named along with their ID numbers. The parents were driving with their two minor daughters on holiday. The mother was 34 weeks pregnant with a third child – not mentioned in their Will yet as they though "this can be done once he's born". Unfortunately, they were in a fatal vehicle accident and the parents passed away. Luckily the paramedics were quick enough to save the baby who was born on the scene. As tragic as this is, the parents did not nominate their son as an heir to their estate. A court order had to be obtained in which the court (luckily) decided that it was the parents' intention to leave their estate to all their children in equal shares. This placed the administration of the estate on hold until the court order could be obtained and the guardians (luckily also nominated in the Will) had to look after the children financially until such time the estate could be finalised.
Complications in Wills – Story 3:
A testator ensured to sign his will along with witnesses and complied with all the requirements. Upon his death three valid original Wills were presented to the Master of the High Court and not one of them was dated. The obligation is on the Master to accept all three and to ensure that the heirs receive their pro-rata shares. It was at this point that the widow found that her late husband had two mistresses and children who were not born from their marriage. Even though this matter did not result in litigation, the undated valid Wills made the lives of these heirs unnecessarily complicated.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
