PRINESHA NAIDOO: It’s South African National Wills Week and joining me to discuss what’s often said to be the most important document that one will ever sign, is Kobus van Schalkwyk, who’s head of corporate development for Standard Trust Limited at Standard Bank Wealth. Kobus, who exactly needs a will?
KOBUS VAN SCHALKWYK: Every person who has reached the age of 16 years is allowed to sign a will and every person who has reached that age and who has acquired assets should have a will so that they can determine how those assets should be distributed in the case of their death.
PRINESHA NAIDOO: So essentially the importance here is to bequeath assets, what if somebody who has assets dies without a will in place, what happens to those assets of theirs?
KOBUS VAN SCHALKWYK: Without a will a person will die intestate and then how an estate devolves is out of their hands and left to legislation. That is the Intestate Succession Act, which may not match all their wishes for their loved ones, who they intended to benefit. A person can also die partly intestate when they do not bequeath all the assets in their will or if part of their will is actually invalid. If you’re a single individual with no children or surviving parents, your entire estate may then go to an estranged blood relative who you barely know, but the well-loved friend or charity then gets nothing from your estate. If you don’t have any blood relatives your assets will be forfeited to the state, without your closest friends or favourite charitable causes benefitting or supported.
PRINESHA NAIDOO: So in that case their loved ones won’t necessarily be protected or be provided for as they may have wished. They’ll also be put through the rigmarole, won’t they, and they might have to incur costs over and above the standard estate administration costs.
KOBUS VAN SCHALKWYK: Whether you pass away with a valid will or whether your estate is wound up intestate does not make a difference to the cost to the estate, the executor’s fees are exactly the same.
Wills and wealth management
PRINESHA NAIDOO: That’s something that is good to know in this case. Kobus, when it comes to wealth management though, where exactly does a will fit in?
KOBUS VAN SCHALKWYK: A will, amongst many other benefits, obviously limits family disputes on the death of a person. Wills clearly state preferences for the appointment of your choice of an executor and/or a trustee, the nomination of guardians for your minor children and the needs of those children with special needs can be provided for in your will. For example, if you create a will trust for a person with special needs or for minor children the trustees will then administer the assets in trust for the benefit of those persons or minor children.
PRINESHA NAIDOO: You mentioned that a will can prevent family disputes and according to the latest Stats SA stats on divorce close to 50% of marriages end in divorce before the tenth anniversary. How should one prepare for a divorce when it comes to estate planning?
KOBUS VAN SCHALKWYK: With four out of ten marriages or almost half of marriages in South Africa ending in divorce before their tenth anniversary it’s crucial that spouses plan ahead to safeguard their assets in the case of a divorce. For example, you can enter into an antenuptial contract by which the most preferred marriage regime is elected before the wedding, you can create a spousal trust, which makes provision for the maintenance needs of a spouse and by regularly updating your will when circumstances change. For example, very few people are aware that in terms of the Wills Act there’s an assumption that on divorce former spouses tend to disinherit each other, unless another intention appears in the will of the deceased person. This assumption, however, is only valid for three months from the date of the divorce and allows spouses suffering from the trauma of divorce to update their will within that time.
PRINESHA NAIDOO: And if they don’t update their will within the three months, does the old will become effective again?
KOBUS VAN SCHALKWYK: Yes, if a person does not update their will or amend their will, then the will is still valid and the divorce powers, if that person was an heir in the original will, will then still stand to inherit from the estate.
Standard wills at stationery stores
PRINESHA NAIDOO: Kobus, it goes without saying that a will would differ based on the wishes of individuals, their assets, their wealth management plans and their life circumstances, yet there are these standardised wills in place, often we see them on sale in stationery and convenience stores. Under what circumstances would such a document be appropriate and relevant?
KOBUS VAN SCHALKWYK: Sometimes standard wills may serve the purposes intended for but the best solution is to make use of trusted partners, who are well versed in the preparation of wills and estate planning, to consider your unique circumstances. The trusted partner will ask you all the relevant questions concerning your estate, and based on their analysis of what is involved, they will provide you with estate planning and will drafting advice.
PRINESHA NAIDOO: When you are speaking with this trusted advisor of your choice, are there any factors or universal points that you need to consider before even approaching them?
KOBUS VAN SCHALKWYK: You must look at your unique circumstances, your own estate, what are your own wishes that you want to have carried out in the case of your death, you need to consider who you want to be your executor and if you are creating a trust in your will you should consider who you want to nominate and appoint as trustee on your death, as the Master of the High Court will give effect to your nominations of those entities. You also need to consider whether there are circumstances where you have heirs who have special needs, where you need to incorporate special provisions in your will to provide for their circumstances.
PRINESHA NAIDOO: Drafting a will, writing a will, it’s not something you do just once, do you recommend that people continuously do it, review and amend it as their life circumstances change or should this be done at a regular interval?
KOBUS VAN SCHALKWYK: You should definitely review your will when certain life events happen. For example, in the case of a divorce, when one of your heirs passes away and they were nominated in a previous will, when you obviously have children and grandchildren, on those life events you should also consider changing and reviewing your will.
PRINESHA NAIDOO: Kobus, thank you so much for sharing your insight with us. That’s
Kobus van Schalkwyk, who’s head of corporate development for Standard Trust Limited at Standard Bank Wealth.
Brought to you by Standard Bank Wealth.