The importance of wills has been thrust into the spotlight once again and this time by late rapper Riky Rick’s life partner, who wants to be recognised as the star’s wife.
Bianca Naidoo, 40, last month launched a court action to force the home affairs department and the Master’s Office to recognise her as Riky Rick’s wife and be appointed as an executor of his estate.
Riky Rick, real name Rikhado Makhado, died early this year, and the pair had been cohabiting since 2013 and have a child together.
Riky Rick left behind an estate worth millions, which includes a barbershop, an events and entertainment company, a fleet of luxury cars, properties and endorsement deals.
This is National Wills Week (from today to Friday) and over 70% of South Africans do not have wills and leave it up to the government to decide how their estate should be distributed once they have died.
Many people do not draw up wills because talking about one’s death or even preparing for it is seen as taboo and an uncomfortable topic in black communities.
Others do not pursue wills because they simply do not know how to go about it.
According to the department of justice, a will is a document in which a person sets out what must happen to their estate when they die.
A person can also nominate the person or persons, known as executors, who should administer their estate after their death.
Only a written will is recognised legally. It has to be signed in front of two independent witnesses, in one another’s presence, and in the presence of the person signing the will.
The will must also be dated to ensure that the latest wishes of the deceased are implemented, according to the department.
Any person above the age of 16 years can have a will.
“Many investors overlook the importance of good estate planning when thinking about their broader financial plan.
"Neglecting to think about what will happen to our assets when we are gone can have disastrous consequences for our loved ones,” says Felicia Hlophe, legal adviser at Allan Gray.
According to Hlophe, if one dies without a will, they run the risk of government having the outright decision on who benefits what from the deceased estate.
“If you die without a valid will, your assets will be distributed according to the Intestate Succession Act. This may result in your assets being inherited by people other than those you would like to leave those assets to. The winding up of your estate could also take longer and cost more.
“If you do not appoint a legal guardian of your minor children in your will and both parents pass away, one may be appointed by the high Ccourt of South Africa. A court application can be a lengthy process, which could leave your children without a guardian for a significant period.
“If you leave assets directly to minor children who do not have a legal guardian, you run the risk of these assets being transferred to the government’s Guardian’s Fund, where they will be administered until your children turn 18.
“Claiming from the Guardian’s Fund as an individual who is looking after your children is an administration-heavy process and not ideal when funds are required immediately for your children’s needs. Retirement funds are treated differently,” says Hlophe.
Planning of a will is not a one-size-fits-all process as it is dependent on family dynamics and size.
“Since each family’s situation differs from the next, the complexity and location of assets will differ and both family size and where family members live should be taken into consideration. Planning for a smaller family may differ vastly from a larger family with more beneficiaries,” says Hilary Dudley, managing director of Citadel Fiduciary.
“Legalities surrounding wills may be complex if they are not correctly drafted and executed. The last thing you want is for your will to be invalid because it does not meet the legal requirements or has ambiguities which create uncertainty, causing further emotional distress for your family and delaying the estate administration process.
“Even with a valid will, the process of winding up a deceased estate takes at least a year, provided there are no complications like disputes, tax audits or businesses that need to be sold. Queries around the validity or content of a will delay the process and not having a will at all can also cause delays and emotional stress,” says Dudley.
Tips and what to consider when drawing up a will
- Draft a valid will
Assistance from a professional – like your banker, lawyer, or financial adviser – will ensure your will is valid. Make sure to update your will every time a life-changing event occurs.
- Appoint a legal guardian for your minor children
- Familiarise yourself with the restrictions on a minor’s inheritance
When it comes to investments, if your living annuity, endowment or tax-free investment account is structured as a life policy, it requires you to appoint beneficiaries. While you can nominate anyone, including a minor child, as a beneficiary, when you pass away, the child’s legal guardian will act on their behalf and receive the benefit.
When it comes to retirement annuity funds, pension funds and provident funds (including preservation funds), there are different rules and these investments are expressly excluded from your estate. Every retirement fund is managed by a board of trustees, and these trustees are responsible for allocating and distributing the benefits. There are different scenarios for how minor children’s benefits can be paid.
You cannot appoint a beneficiary for unit trust investments.
- Consider setting up a testamentary trust
If you provide for a testamentary trust, you may name that testamentary trust as a beneficiary of your living annuity, tax-free investment, or endowment policy.
- Keep your affairs in order
Make sure that your loved ones, or those appointed to take care of them, know where your will can be found after your death, and what needs to be done in the event of your death to make the process as seamless as possible.
sifilel@sowetan.co.za
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