by Wafiq Davids
Wise men have said there are only two things in life which we are certain of; death and taxes. Experience has taught us this is true. Notwithstanding this certainty, many of us have not made adequate preparation for our estate or our taxes. We’ve all heard the stories, but it appears, we simply hope that it will not happen to us.
While we are alive we have the power to direct how we wish our estate to devolve upon our demise. For all intents and purposes we record our instructions and last wishes in a Will. Under South African law every person has the right to freedom of testation, this means we can pretty much do with our estate as we wish. There are however a few points to consider when drafting your Will.
A Will should look at a person’s estate holistically and deal with all potential pitfalls. Your Will should at the very least prescribe who the beneficiaries of the estate are and who the executor is. The beneficiaries are those persons nominated to benefit from your estate, and the executor is the person who has the responsibility of administering your estate. The Master of the High Court has ultimate jurisdiction over the administration of an estate, and shall require that a nominated executor who is not qualified; be duly assisted by a suitably qualified person, such as an attorney or accountant.
The Administration of Estates Act 66 of 1965 prescribes that the executor or the agent is entitled to a fee which has either been agreed upon, or if there is no agreement, according to tariff. The prescribed tariff is 3.5 % of the gross assets of an estate, plus 6 % of gross income accumulated after date of death.
A Will must comply with the formalities prescribed by the Wills Act 7 of 1983. Firstly the Will must be in writing and signed at the end thereof by the testator. Secondly, the Will must be signed in the presence of at least two competent witnesses, who must themselves attest the Will in the presence of the testator. Thirdly, the testator must sign every other page of the Will in the presence of the witnesses. It is not a requirement for the witnesses to sign every page or for the Will to be dated, it is however highly recommended that the witnesses sign every page of the Will and that the Will is dated accordingly.
If these minimum requirements are not met the Will, will not be accepted by the Master and the estate will devolve intestate. Once the Will has been executed in accordance with these provisions it is very important to keep the original in safe custody because the Master will also not accept anything less than the deceased’s original Will.
In the articles to follow; I shall discuss estate duty and other applicable tax regulations dealing with income tax, capital gains tax and donations tax. We also look at how the formation of Trusts can help you save money while at the same time protecting your legacy.
This is a brief introduction to Will’s and Estate, it is not intended to constitute legal advice which is subject to particular facts, circumstances and the law at the time. Any liability that would or could arise from the contents hereof is hereby excluded