As September is Wills Month, many South Africans are reminded of the importance of having a valid will in place. A will is a crucial document that outlines how an individual's assets should be distributed after their passing. However, many people misunderstand what a will can and cannot control, leading to disputes, delays, and shortfalls that land on an executor's desk. According to a recent report, there are several common misconceptions about wills that can have significant consequences for families.
One common misconception is that leaving a spouse "50% of my estate" guarantees them half of the total estate. However, if the couple is married in community of property, the joint estate splits automatically, with 50% already belonging to the surviving spouse. A will that bequeaths "50% of my estate" to a surviving spouse without specifying which estate it refers to can result in the spouse receiving 75% of the total estate, leaving other beneficiaries with correspondingly less. It is essential to explicitly state which estate a percentage bequest refers to in wills for spouses married in community of property.
Another misconception is that an ex-spouse automatically falls out of a will after a divorce. However, under section 2B of the Wills Act, a will made before divorce is treated as if the former spouse died before the testator, but only if the testator dies within three months of the divorce. If the testator dies after three months, an unamended will can still benefit the ex-spouse. Additionally, debts do not disappear when an individual passes away, and creditors are settled before any heir inherits, which may require assets to be sold.
Many people also believe that their will determines who receives their pension or retirement annuity, but this is not the case. Death benefits from a retirement fund fall under section 37C of the Pension Funds Act, and fund trustees, not the will, decide on the distribution. Furthermore, life insurance and retirement annuities do not always form part of the estate, especially if a beneficiary has been nominated on the policy. A valid nomination can result in the payout bypassing the deceased estate and the will entirely.
Some individuals believe that they do not need a will if they do not own significant assets. However, an estate can include a home, vehicle, bank accounts, and personal belongings. For parents, having a will is crucial, regardless of asset value, as it allows for guardianship arrangements to be made. Moreover, minors cannot inherit directly and manage an inheritance themselves, and without a testamentary trust or guardian's fund arrangement, money due to a child is held by the Guardian's Fund until majority.
Informal understandings about asset distribution after passing are not enforceable, and family members may recall conversations differently. Only a validly executed will binds an executor. It is also essential to review wills after significant life events, such as marriage, divorce, births, and deaths of beneficiaries, as well as changes to assets. A handwritten note does not qualify as a will, and an unwitnessed note can only be validated through a costly court application.
Cohabiting partners do not have automatic inheritance rights, and a life partner excluded from a will can be left with nothing. An executor cannot start administering an estate immediately, as they require Letters of Executorship from the Master of the High Court. Additionally, disinheritance of a spouse can have consequences, and a surviving spouse may claim maintenance against the estate under the Maintenance of Surviving Spouses Act. Proper planning, especially in second marriages, is crucial to avoid unintentionally excluding children from a first marriage.
Key points
- A will should be reviewed after significant life events to ensure it remains valid and accurately reflects the individual's wishes.
- A valid will can help prevent disputes and delays in the distribution of assets after passing.
- Common misconceptions about wills can have significant consequences for families, emphasizing the importance of proper planning and understanding of the law.
