The most important talk: What would your family need to know if you died tomorrow? Part 2

Key takeaways

Winding up a deceased estate is a formal process and may take months or years, particularly when records are incomplete or the estate is complex.
Families may need accessible cash (liquidity) for immediate expenses while the estate administration process gets under way.
An executor must take on significant legal and administrative responsibilities, so professional expertise can offer meaningful support.
Review your will after major life events or changes to your family, assets, business interests or nominated representatives.
Family conversations can reduce uncertainty without needing to disclose every detail contained in your will.

In part one of the series, we explored why talking about your will and estate plan is an act of care, what your family may need immediately after your death, and how to take the pain out of the practicalities when facing the death of a loved one.

In this second part, experts from Sanlam’s Make it Make Cents webinar discuss the challenges that can come with the death of a loved one, the importance of reviewing your will, and how to have the most important conversation.

Why estate administration can take longer than families expect

Grieving families may assume that a will allows assets to be handed over immediately. In reality, winding up a deceased estate involves a formal process that can take months, often years.

Sanlam Trust Chief Operating Officer Louise Danielz told attendees that the deceased estate must first be reported to the Master of the High Court, who formally appoints an executor or, for qualifying smaller estates, a representative to administer it. Once authorised, the executor can deal with institutions, identify assets and liabilities, address creditor claims and tax matters, prepare the liquidation and distribution account and, after the required process, distribute or transfer assets.

Even a relatively straightforward estate may take many months to finalise. Missing documents, business interests, tax issues, disputes, cash shortfalls or property transfers can all cause delays. Timelines will depend on the complexity of the estate, and the relevant authorities.

“It can even take longer if things are not left in an orderly state and if business interests and taxes are not in good order. And, if there is conflict around the estate and its administration, some estates can take years to finalise,” she cautioned.

This is why a solid estate plan is not only about deciding who should inherit. Families may need access to cash for a funeral and everyday living costs before the estate is finalised. The estate itself may also need sufficient liquidity to settle debts, taxes, legal fees, estate duty and other expenses without forcing an unwanted sale of assets.

An executor carries significant legal and administrative responsibilities. Danielz and Sanlam Trust CEO, Advocate Sankie Morata CFP^®, both encouraged individuals to consider the expertise and support executorship may require, rather than assume a grieving relative could manage everything alone.

When should you review your will and estate plan?

A will is not a document to be drawn up and then forgotten about. Life changes. Relationships and responsibilities evolve. Assets are acquired or disposed of. Your estate planning should keep pace with these life changes.

Morata recommended reviewing your will after major life events like a marriage, divorce, the birth or adoption of a child, a beneficiary’s death, a significant asset change, or a substantial change to a business or financial plan. He said it should also be reviewed if a nominated executor, guardian or trustee is no longer the right person for the job.

The wording and signing requirements for a valid will are important. A small mistake can complicate matters, and an instruction that does not match how an asset is legally owned may fail. For example, an individual cannot leave a company-owned property as though it were owned by someone in their personal capacity.

This is why, Morata pointed out, a generic will template may not suit every family, and a qualified professional can help ensure a will is valid, current and aligned with the broader estate and financial plan.

It can also help to make use of online resources to check at what stage your planning is, and what more is required.

How to start the conversation about your will

The first step does not have to be a perfect estate plan completed in one sitting, as seen in the priorities of webinar attendees in the final poll. These results showed that 40% of respondents planned to organise their important documents. A further 18% intended to review and update an existing will, while 17% planned to start a conversation with their family about estate planning. In addition, 14.9% said they would draft a will for the first time, and 9.7% planned to speak to a professional about their estate planning.

When it comes totalking to your family, leadership psychologist Dr Mavis Mazhura advised acknowledging the discomfort that surrounds estate planning conversations, rather than avoiding the conversations altogether. She suggested opening the discussion with honesty and empathy, for example, by saying: “I know this is not an easy conversation, but I love you and want to make things easier for all of us if something unexpected happens. What would you want to happen? What would I want? Can we talk about it?”

She also said you do not necessarily need to disclose every detail of your will or discuss the value of every asset. A useful first conversation may simply establish that a will exists, where it is securely held, who the executor is, who the family should contact, and where essential information can be found.

And, while that may feel like a small step, it gives the people closest to you a place to begin which is especially valuable.

In closing, the experts agreed that the legacy most families need is more than a distribution of assets. It is knowing your wishes, where to find essential documents and information, and having clarity about what happens next.

Watch Sanlam’s Make It Make Cents webinar for the full discussion and how you can take the first step to having The Most Important Talk.

This article provides general information and education only and does not constitute legal, tax or financial advice. For guidance based on your circumstances, speak to an appropriately qualified professional.

FAQs

How long does it take to wind up a deceased estate?
Even a relatively straightforward estate may take many months to finalise. Missing documents, business interests, tax issues, disputes, cash shortfalls or property transfers can all cause delays. Timelines will depend on the complexity of the estate, and the relevant authorities.
What does an executor do?
An executor administers the deceased estate after formal appointment by the Master of the High Court. Duties may include identifying assets and liabilities, handling creditor and tax matters, preparing the liquidation and distribution account, and transferring assets.
Why does an estate need liquidity?
Cash may be needed to settle debts, taxes, fees and other costs. A family may also need money for funeral and living expenses before the estate is finalised. Appropriate planning can reduce the risk of assets having to be sold unexpectedly.
Which life events should trigger a will review?
Review your will after marriage, divorce, a birth or adoption, a beneficiary’s death, or a significant change to your assets, business interests or family responsibilities. Also reconsider whether the nominated executor, guardian or trustee remains suitable.
How can I start a conversation with my family about my will?
Acknowledge that the subject is difficult and explain that you want to make things easier if something unexpected happens. Start with whether you have a will, where it is held, who the executor is and who the family should contact.

Key Terms Explained

Deceased estate: The assets, liabilities, rights and obligations administered after a person dies.
Executor: The person or institution formally appointed by the Master of the High Court to administer a deceased estate.
Liquidation and distribution account: A formal account of the estate’s assets and liabilities and how the balance is to be distributed.
Estate liquidity: The cash available in an estate to pay debts, taxes, fees and other costs.
Beneficiary: A person or organisation entitled to receive an asset or benefit from an estate, will, trust or policy.
Master of the High Court: The public office that oversees deceased-estate administration and formally appoints executors.