What Does Reviewing Your Will Mean And What Should You Be Looking For?

We are often told to review our will on a regular basis and /or at momentous occasions, births, deaths marriages, divorce etc. but what exactly should be reviewed?

Below is a list of points that should be noted at each review and why these are important:

Original Will

Do you know where your original will is?  A deceased estate can only be reported with an originally signed will both by the testator / testatrix and/ or witnesses. If the originally signed will cannot be found, then you may pass away intestate (i.e., without a will) which means your estate is distributed in terms of legislation and in most cases, your estate will devolve on your next of kin. This may not be how you wished your estate to be distributed.

Signed and Witnessed Correctly

According to our legislation, a last will and testament must be signed and witnessed at the same time i.e. the witnesses (two of them) and testator or testatrix must sign in the presence of each other. Failure to do so could invalidate your will.

Dated

Whilst a will being undated does not invalidate the document, it could become a challenge for the executor to confirm which is the last will and testament. Especially problematic if you have previously drafted and signed other wills. Rather just make sure that your last will and testament is dated.

Revocation Clause

A revocation clause is usually found in the beginning of a document purporting to be a last will and testament. This in basic terms, confirms that the document at hand, is the last will and testament and revokes or cancels any earlier document purporting to be a last will and testament. Obviously, the importance of this clause cannot be overstated. By not having this clause, could cause that the current will plus the earlier will or wills, could be noted as the last will and testament,and this can cause many complications especially if the same assets are bequeathed to different heirs.

Jurisdiction

For various reasons you may own assets in different countries such as fixed property and or investments and may require wills for each of these countries or jurisdictions. It’s important to specifically state in the will for which jurisdiction this will is intended. Referencing the previous point, that the new will does not revoke those wills. Remember if you state in a document that this is your Last will and testament then it automatically revokes all other documents. You need to be specific.

Nomination of Executor / Trustees

Fortunately, you can appoint almost anyone as your executor and or trustee. For most people it is an honour to be so highly regarded by a colleague, friend or family member. Unfortunately, the reality is that most lay people, do not have the time or technical knowledge to be able to perform this function and so appoint an agent to deal with the actual administration process. 

With the huge increase of verification processes by various institutions, the executor is personally being forced to be more hands-on and is expected in some cases to be personally present either online or at the physical offices. This could be a challenge for certain individuals.

Beneficiaries

Sadly, there are times where the beneficiary nominated in your will passes away before you do – or relationships breakdown and you no longer wish for the said person to inherit from your estate.

Your executor cannot assume your wishes and so your intentions need to be very clear in your will – specifically when relationships breakdown. Remember that you have 3 months after a divorce to amend your will – if you do not do so in that time and your will still shows your ex-spouse is entitled to inherit, then said ex-spouse will inherit. 

What about cases where your beneficiary passes away before you do and you do not change your will? In those cases, there should be alternative beneficiaries named for example “I bequeath my estate to my daughter but should she pre-decease me or fail to survive me then this bequest shall devolve upon her children in equal share”. 

Another issue to be considered is if a beneficiary is still a minor (ie. 18 years in South Africa) or the beneficiary cannot be traced.

A beneficiary under the age of 18 cannot inherit directly – therefore a testamentary trust must be created for the beneficiary, or an alternative bequest must be made. If the will is silent on the minor’s inheritance, the executor is obligated to pay the funds to the Guardians Fund which is administered by the Master of The High Court / Department of Justice. The beneficiary can then claim the funds at the age of 18. 

If an heir cannot be traced and there is no alternative option written into the wills – the executor is also obliged to pay the funds into the Guardians Fund – the funds will stay in the Guardians Fund for 30 years after which (if no one has claimed the funds) will be forfeited to the state.

Special Bequests – Leaving specific amounts or assets specific beneficiary

Special bequests in a will are where you leave a specific item or amount to a specific individual/s. This is an important component of a will as these amounts or items will be distributed to said individual/s after all debt including all taxes has been paid but before the residue (remainder) is distributed.

Here common sense needs to prevail and a discussion with your financial advisor is very important.

You cannot leave R1 Million in cash to a beneficiary if your estate does not have the liquidity. However, the bequest must be honoured and so your executor may need to sell assets to give effect to the bequest. This may mean that an asset needs to be sold.

Similarly, you cannot bequeath an item, for example a car to 3 grandchildren – 3 people cannot take effective ownership of a motor vehicle – so either the car needs to be sold or transferred to one and the others are paid out. This as you can see may cause challenges and cause family rifts to occur.

Please note that a special bequest is not a necessity in a will – if you want your entire estate to be simply divided amongst the children – that would form part of the residue or remainder of the estate).

Residue (Remainder of the Estate)

Once all your assets are accounted for and your debt and taxes calculated, the balance thereafter is referred to as the residue or remainder of your estate.

In your will, you will say who gets this and this amount or remaining assets will be distributed after all the special bequests and debt is paid.

It’s therefore important to note that if you bequeath cash or assets to specific individuals and there is nothing left afterwards then your residuary beneficiaries may not receive anything. 

Conclusion

As you can see – there is more to reviewing a will than just the nomination of beneficiaries. It is therefore vitally important that the will review is done by a professional together with your financial advisor. 

Should you have any further questions or queries, please do not hesitate to contact Sentinel International

Article by:

Ricky Opperman-Knipe