Your Will vs Your Family Structure
South Africa is a diverse country that is home to families of all shapes, sizes and descriptions – nuclear, blended, extended, and more.
Whether it’s you and your partner, you two plus a few, you plus a fur child, or just you – it’s important to have a valid, signed will so that your final wishes are known, and your loved ones are provided for if you pass away, says Moremadi Mabule, Head of Sales for Beneficiary Funds at Sanlam Trust.
“There is a mistaken belief that wills are only for people who own lots of assets. If you have a minor child (under 18), pets, a vehicle or a property, savings or investments of any size, cryptocurrency, even photos or music in the cloud, or items of sentimental value like jewellery or art – even if they are not of high monetary value – then you need a will,” advises Mabule.
A Sanlam Legacy survey found that more than 60% of respondents believed the value of assets is not material when it comes to having a will. However, 40% still thought you have to own at least R500,000 in assets to warrant having a will, and 14% believed this figure to be as high as R5 million or more.
If one considers the full population, an estimated 70% of South Africans don’t have a will. “Many see drafting a will as a complex and expensive process, but that is another mistaken belief. The overall process for all wills is similar, but there are subtle nuances, depending on your personal circumstances. It’s also vital to keep your will current by updating it when there’s a major life event, like marriage or divorce, the birth or adoption of a child, the death of a beneficiary, or a change in your financial situation,” explains Mabule.
A valid will needs to be in writing and signed by the person whose will it is. It must also be signed by two competent witnesses who do not stand to benefit from the estate. In South Africa, we have ‘freedom of testation’, which means you can decide who inherits what from your estate, as long as your wishes are ethical and legal. “You can download online will templates. Sanlam has a selection of free online will templates, tailored to suit specific circumstances and family structures,” says Mabule.
She stresses the necessity of working with a professional will consultant or financial adviser if your needs are complex. “It’s easy to forget something important, such as the nomination of an executor or guardian. Getting an expert to help you draft your will can ensure your wishes are comprehensively covered and address more complex requests, such as setting up a testamentary trust for a minor child.”
Blended family
The many blended families who call South Africa home should consider the following.
- Divorce settlements: One or both partners could come from previous relationships that ended in divorce. It is important to know what those divorce settlement(s) contain, and how it affects a new marriage.
- Marital regime: Are you married in or out of community of property? If out of community, did you include the accrual system in your antenuptial contract? Who owns which assets?
- Beneficiaries: Stepchildren do not stand to inherit unless you stipulate it in your will, or adopt them. You need to be explicit with your wording, so there is no confusion. If your stepchildren are excluded from your estate, but they can prove they were financially dependent on you, they could claim from your pension fund.
The estimated 1.4 million pet owners in South Africa, should consider who will care for their beloved pet(s) if they are not able to.
Have you asked someone to look after your pet? Are they going to take your animal in, as its ‘guardian’? Is the expectation that the person will move into your home to care for your fur child? If so, have you left sufficient funds for rates, taxes and upkeep in your estate? Will the ‘guardian’ inherit your property (you cannot leave it to your pet), or will it go into a trust? You need to be clear in your will and provide financially for the remainder of your pet’s life.
- Sanlam Legacy advises the drafting of mirror wills for couples, instead of the traditional joint wills. Mirror wills are essentially the same, but name the partners as each other’s beneficiaries.
- Whether you are married under the Marriage Act (monogamous marriages for opposite-sex couples) or the Civil Union Act (monogamous partnerships for same- or opposite-sex couples), your marital regime plays a massive role. If you are married out of community of property, without accrual, for example, you can exercise freedom of testation and leave everything to your children. However, your spouse can still claim from the estate in terms of the Maintenance of Surviving Spouses Act.
- Contrary to what you read in magazines, there is no such thing as common law marriage in South Africa, either in opposite- or same-sex partnerships. However, court rulings and changes to legislation, mean there are now situations where couples will be considered to be in a relationship similar to being married even if they’re just living together. The Intestate Succession Act and the Maintenance of Surviving Spouses Act were changed. The definitions of ‘spouse’, ‘marriage’ and ‘support’ were expanded to include ‘a partner in a permanent life partnership where the partners have undertaken reciprocal duties of support’. This can impact the time it takes to wind up a deceased estate, so it is much kinder and fairer to include a partner in your estate planning and therefore your will.
- According to the Sanlam Legacy survey, 18% of respondents say they have a life partner (not married, no civil union), whereas 65% have up to three dependants, the majority of them children under the age of 18. It’s important to plan together and make sure each partner is provided for. You can stipulate your partner as the main beneficiary in your will, or make the children your beneficiaries and plan for your partner elsewhere, for example by naming them as beneficiary of your life cover.
- If you die without a will, your parents, siblings and other family members have no maintenance claim from your estate. However, if they can prove their financial dependence on you, they could claim from your pension.
- It’s best to state explicitly in your will whether you want to continue supporting family members, in addition to your children and spouse or partner.
- If you die without a will, your estate will be divided between your partners and children, based on marital regimes.
- If you draft a will, however, you can exercise freedom of testation over your share of the estate, and the marital regime for each relationship will play a major role in how the estate is divided.
- The default marriage regime is in community of property.