This article was taken from Mastermind, the official monthly newsletter of Sanlam Private Investments, a division of Sanlam Ltd. Visit the SPI Website
FIDUCIARY & TAX MARTEEN MICHAU, HEAD: SPI FIDUCIARY AND TAX
You recall signing a Will and the original is at your bank for safekeeping where your family can access it should something happen to you – but it may not be updated.
All is well and taken care of, and that fleeting, anxious thought disappears just as quickly as it arrived. Unfortunately, it may not be that simple. Here are some reasons why you should consider holding on to that thought for a little longer.
Changes in your personal circumstances and changes in legislation could mean your Will is out of date, the result being that the outcomes thereof are no longer what you intended them to be.
We look at some of the most common examples of changes in circumstances. Consider updating your Will if the following applies to you:
A change in marital status: if you were divorced more than three months previously and your Will still bequeaths assets to your former spouse, he or she will inherit those assets or benefits even if your intention isn’t for your ex-spouse to receive any benefits as an heir at all.
Death of an heir: if you failed to name an alternative heir to inherit and the specified heir dies before you, the assets or benefits left to that person will generally form part of the residue of your estate and the heirs nominated will receive the residue.
You have created an inter vivos family trust subsequent to signing your last Will: if the terms and the beneficiaries of the testamentary trust and the inter vivos trust are similar, it may make sense to amend your Will to bequeath assets to the inter vivos family trust instead of to the testamentary trust. This would generally eliminate the duplication of trust structures and can prevent the duplication of costs.
You may also want to, if the inter vivos family trust deed provides as such, consider nominating a trustee or trustees to succeed you on the inter vivos family trust, which can be done by nominating a succeeding trustee or trustees in your Will.
Furthermore, any loans owed to you by such a trust can be bequeathed to the trust in your Will. This will prevent the potential need for trust assets to be liquidated in order to repay the loans.
Your children have reached the majority age: children over 18 can inherit and hold assets in their own name, eliminating the need for trust structures established specifically to benefit minors.
Any or all of your children are living or working abroad: children who live or work abroad who have not formalised their emigration may not be able to externalise an inheritance received from you due to certain restrictions in terms of exchange control regulations in South Africa.
You acquired assets but these are not covered in the Will: assets acquired after signing your last Will won’t be covered in your Will and might devolve as part of the residue of your estate to your residuary heirs and not to the specific persons you would like to benefit therefrom.
You acquired foreign assets after the signing of your Will: foreign assets acquired after signing your last Will could be more efficiently administered in terms of a foreign Will – depending on the jurisdiction of where it is located – and the type of asset, than being covered in terms of your South African Will.
You had a joint Will with a spouse who’s predeceased you: consider signing a new Will, as the original joint Will would have been lodged with the Master of the High Court. As a consequence, you aren’t likely to have an additional original copy in your possession. This notwithstanding, you might want to deal with your assets differently, especially if your circumstances have changed significantly.
The above list and its consequences are not exhaustive and are mentioned in general terms. There could be many other specific consequences that have not been addressed.
Contact Marteen Michau at marteenm@spi.sanlam.com for more information or assistance with the above.
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