September is National Wills Month. So today we are going to look at the importance of having a WILL.
Many people plan for the future but give no thought to death.
- If you die, will your family be provided for?
- Do you have a Will in place?
- If so, when last did you review your Will?
“There is a time for everything, and a season for every activity under the heavens: A time to be born and a time to die, a time to plant and a time to uproot” (Ecclesiastes 3:1-2)
And while speaking of death, do you know where you will spend eternity?
If you’re unsure where you’d spend eternity, be sure to read this message!
The problem is that sin cuts us off, and we have all missed the mark. But there is Good News. Jesus paid the price on the cross so that all mankind could have eternal life.
If your eternity is a matter of chance, I ask you to seriously look at your relationship with God.
If want to start or restart your walk with God, click here to pray a simple prayer we have set up for you.
Now, with September being National Wills Month, I thought it would be a good time to look at WILLS.
Last week we looked at:
- What is a Will?
- What are the consequences of not having a Will?
- How do you set up a valid Will?
- What do you need to consider including in your Will?
Today I want to ask you:
- Have you made provision for costs associated with your estate?
- Have you sought advice regarding your will and estate?
- Are your loved ones protected?
Let’s recap what we looked at last week…
What is a Will?
A Will is simply a legal declaration where you give your instructions on how you wish to distribute your wealth and assets on death.
When you draft your Will, you should name an Executor, who will be responsible for the administration process and for the winding up of the Estate. The Executor will ensure that your wishes are carried out and that your assets are distributed to your heirs and beneficiaries.
What Are The Consequences of Not Having a Valid Will?
If a person dies without leaving a Will, the person dies Intestate.
If this happens, the Master of the High Court would determine who the closest blood relatives are and would then distribute the assets in terms of this.
This can cause a huge problem as your loved ones may not receive the funds you wanted them to have, as a distant relative (seen as your next of kin on your bloodline) may end up receiving assets you wanted to leave to your loved ones.
Who Can Draft a Will?
Provided that you are 16 or older and of sound mind, you can draft your own Will.
However, it is wise to seek expert and professional advice when drafting your Will to ensure that your needs and wishes are correctly spelled out and that your Will is valid.
If your Will ends up being invalid, it could cause problems.
Do You Have Sufficient Assets in Your Estate?
It is important to make sure that you have enough assets in your Estate to cover debts, death expenses, and to provide an income for your family. Should you not have enough assets in your estate, your family may be left in trouble.
Also, should you not have enough liquid assets in your estate, the result could be that your family home may need to be sold to free up cash to cover death expenses and taxes, which is probably something you would never have chosen to happen.
You can take care of your liquidity requirements by having sufficient life cover in place to provide for loved ones, and cover debts and death expenses, in the event of death.
How Do You Set Up a Valid Will?
Your Will must be in writing. It can be written by hand, typed, or printed.
The person making the Will must be at least 16 years old, or older, and must be mentally capable of understanding what they are doing and what the consequences of their actions are.
Your Will needs to clearly state who is to inherit funds from within your Estate. You can nominate who you want your heirs to be and what they are to receive upon your death.
The name of your nominated Executor should be included in your Will. The Will may also state that the Executor is exempt from providing security.
The person who has made a Will (known as Testator/Testatrix) must sign each page of their Will in the presence of two witnesses who must also sign each page of the Will. If any alterations are made, both the person making the Will and the witnesses must initial the alteration.
The place and date of signing must be written at the end of the document.
Witnesses should be people who have no interest in the Will. They should not be family members, or stand to gain from the Will, or the spouse of an heir, as they may be disqualified from receiving any benefit from that Will.
Witnesses’ signatures merely attest to the fact that the Testator signed the Will in their presence. They do not have to read or know the content of the document. Witnesses must be at least 14 years old and must be competent enough to give evidence in a court of law.
What Do You Need to Consider Including in Your Will?
In your Will, you should include all the beneficiaries you want to benefit from your Estate, and you should stipulate the inheritance each is to receive.
In your Will, you can request that a Trust be set up on death to protect your children. As an example, if your children are minors or if you believe they would be unable to handle their inheritance, you could request that the inheritance be held in a Trust up to a predetermined age (Age 21 or 25).
You could stipulate that, during this period, funds could be released to cover studies, maintenance, living expenses, etc.
In your Will, you can also nominate a guardian to look after children who are minors. Funds could be held in Trust with an income being released to cover expenses, whilst still protecting the assets in the Trust until your children are at a responsible age to handle their inheritance.
A Will can be used to protect an inheritance from the consequence of a future marriage, partnership, or union.
In your Will, you can also make provision for donating your body to an Organ Donor organization.
You can also specify whether you wish to be buried or cremated.
It is also a good idea to nominate alternate heirs should your nominated heir predecease you. If you do not nominate alternate heirs, your intestate heirs (nearest blood relatives) may inherit your estate in the event of your heirs predeceasing you.
In your Will, you should include full names and identity numbers of all persons included in the Will.
If you are drafting a new Will, it is important to state that your new Will replaces any previous Wills drawn up.
An important factor to consider in your Will is that if you leave your assets to your spouse there will be no death tax payable until the death of the last dying spouse.
Furthermore, if you nominate beneficiaries on your assurance policies, you can save on Executive Fees.
Keep Your Will Simple
Keep the wording as plain and simple as possible. Avoid complications.
Be specific, don’t use vague terms.
Notify your loved ones about where your Will is kept, so that it is easily located upon your death.
Your Will should be reviewed periodically. It is a ‘living document’ and should be changed as your circumstances change.
Today I want to look at 3 important areas regarding your will and estate planning…
Make Provision for Costs Associated With Winding Up Your Estate
Make sure that you make provision for potential Estate Duty and winding up of your Will expenses.
Estate duty is a death tax that is levied on Estates that exceed certain amounts.
Make provision for Executor’s Fees and funeral costs.
Also, make provision for the other “often forgotten” costs associated with winding up your Estate. These fees included Bank Charges, Government Gazette Fees, Advertising fees, Masters’ Fees, potential transfer duty costs, property valuation fees, capital gains taxes, and death taxes.
Estate planning can be complicated and costly. I suggest that you get advice.
Speak to an Attorney who specializes in Estate Planning or a qualified Financial Advisor who will be able to advise you on how to structure your Will to ensure cost and tax efficiency. They will also be able to highlight potential shortfalls, do an estate duty analysis, and advise on how much life cover is needed to provide protection on death.
“Fools think their own way is right, but the wise listen to others.” (Proverbs 12:15)
Make Provision for Your Loved Ones
In the event of death (or in the event of a sickness or disability), will your debts be covered?
In the event of death (or in the event of a sickness or disability), do you have sufficient assets to provide a home and a monthly income for your loved ones?
If you do not have enough assets, it is imperative that you supplement the shortfall gap with life insurance.
Word of Caution
Often people have their Will in place but forget to cover debts and ensure that there is adequate life cover or assets to cover the financial needs of their family.
If you do not, you can leave your family financially bankrupt.
In the event of your death or disability, will your family have enough income to cover living expenses?
If not, I would suggest that you ensure that you have enough life and disability cover in place to protect your loved ones.
I have seen many families left in financial ruin because they did not have adequate life and disability cover in place.
Risk cover is a vital area of Estate Planning that is often neglected when reviewing one’s Will.
If tragedy struck, would your family be left financially destitute?
If so, I would recommend that you sit down with a financial advisor.
A Financial Advisor will be able to do a Financial Planning Analysis for you. This involves looking at your current needs and objectives (taking debts, contingency and income needs into account), and taking your current provisions into account. If there are shortfalls, a Financial Advisor will be able to highlight them and provide a suitable solution to ensure sufficient protection is in place.
Consider life cover and disability cover to cover your debts and to provide a contingency fund in the event of death or disability. And, make sure that you have enough cover to provide suitable income to cover your loved ones’ monthly living expenses.
Make sure that you have enough life and disability cover in place to ensure that your debts are covered and that your family is not left destitute.
“Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever.” (1 Timothy 5:8)
What Does God Have to Say?
“A good man leaves an inheritance for his children’s children, but a sinner’s wealth is stored up for the righteous.” (Proverbs 13:22)
In a Nutshell…
You need a Will.
You also need to review your Will and your financial planning whenever you have a life-changing event.
Your Will is going to speak for you when you can’t speak for yourself – when you are dead!
So, it is vitally important that the message it conveys is specific, clear, and easily understood.
Remember, your appointed Executor is going to have to implement your wishes based on the information you have inserted in your Will. If they have queries, they can’t phone you and ask what you meant – so be clear.
An up-to-date Will, with sufficient life cover in place (or sufficient investments), is the only means to ensure that your estate is distributed according to your wishes.
A Will is a necessity for all persons – especially those with children.
Please make sure that you put sufficient insurance protection in place to cover your costs and to protect your loved ones, otherwise, you may just leave your family destitute.
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