To give effect to an estate plan, a testator will need to appoint certain people to perform specific functions or receive certain benefits according to their will. But, before making any appointments or appointments, it is important to fully understand the roles and responsibilities of each person mentioned in your will to make sure they are appropriate for your estate plan.
At the start of your will, you are required to specify your matrimonial regime and the nature of your matrimonial regime. Indeed, your marriage contract has a direct impact on the way in which you can bequeath your property. For example, if you are married in community of property, you and your spouse each own 50% of a joint estate, which means that you can only bequeath half of the estate according to your will.
For estate planning purposes and when it comes to calculating inheritance tax, Commissioner Sars considers the “spouse” to be any person in a marriage or customary union, unions recognized as marriages according to religious principles and Same-sex or heterosexual unions with which the Commissioner is satisfied are intended to be permanent. As such, if you and your partner are living together but have not been legally married within the meaning of South African law, you run the risk that your partner will not be considered a “spouse” in terms of definition. which may affect how the remainder of your estate devolves to your heirs.
To note: If you and your partner are living together in a long-term relationship, consider drafting a cohabitation agreement to outline the financial implications of your union.
Under South African law, a child under the age of 18 cannot directly inherit lump sum payments or other property, as they are deemed not to have the legal capacity or the ability to manage such property. When providing for minor children, many testators choose to set up a testamentary trust with their minor children as designated beneficiaries. In the event of the testator’s death, the testamentary trust – which is constituted by the will – is formed and all property intended for minor children is transferred to the trust where it will be administered on behalf of your children by the trustees you have. named in your will. Failure to establish a testamentary trust may mean that the assets bequeathed directly to your minor child will be held in the Guardian’s Fund where they will be administered until your child reaches the age of majority.
To note: If you have a child with special needs who will never be able to manage their affairs, you can set up a testamentary trust as a Type A special trust within the meaning of the Income Tax Act. This type of trust will continue until the end of the assessment year in which the child with special needs succeeds. In addition, there are significant tax advantages.
If you have minor children, it is important that you appoint a guardian for them based on your will, keeping in mind that the guardian will be responsible for looking after your child in the event of death. If you and the child’s other parent are still alive, your child has two natural guardians, and your legal guardian would only take responsibility if you and your spouse (or other parent) died simultaneously. However, if you are the sole guardian of the child, the legal guardian you designate in your will will assume responsibility for your child in the event of death.
Under the Children’s Act, you can designate a legal guardian for your child in your will, and if the guardian accepts the position, they will acquire all parental rights and responsibilities. It is important to think carefully about who would be best suited to care for your child, taking into account their cultural background, value system, religious beliefs, location and financial stability. The legal guardian is required to administer all property inherited by your minor child until he or she reaches the age of 18 and will be responsible for making all decisions regarding your child’s education, extramural activities and vocational guidance. The guardian will also be responsible for assisting or representing your minor child in administrative, contractual and / or legal matters until maturity.
To note: Consider appointing another guardian in your will in case the primary appointment is not available or is unwilling to assume the appointment at that time.
The executor of your estate plays an essential role in the administration of your estate until it is liquidated, and it is important to pay special attention to this appointment. When you have appointed an executor based on your will, that person will need to ask the master’s office for so-called executor letters, which are actually confirmation of their appointment.
Your deceased estate takes effect immediately, and it is one of the first tasks of your executor to organize a preliminary interview with your relatives, in order to draw up an approximate inventory of your assets. The executor will be required to advertise creditors and prepare a liquidation and distribution account. Once the L&D account is signed, the executor will have to pay the inheritance tax, taxes and CGT, if applicable, and then distribute the assets accordingly. The work of an executor is expensive and requires extensive legal, financial and administrative know-how, so it is advisable to appoint an expert rather than a layman.
To note: Be careful when naming a family member as the executor. Family relationships and dynamics change over time, and you want to avoid an executor who will contribute to family tensions and stress during an already emotional time.
Master of the High Court
The office of the Master of the High Court is established by law and its role is to serve the public with respect to the estates of the deceased, the liquidation, the registration of trusts, guardians and trustees, and the administration of the Guardian’s funds. These five divisions serve to protect the financial interests of persons whose property or interests are, for various reasons, managed by third parties.
On the legislative level, the work of the Master includes the administration of the estates of deceased and insolvent persons, the protection of the interests of minors and persons legally incapable, as well as the protection and administration of the funds of minors, contractually unfit and indeterminate and absent heirs, which have been paid into the Guardian’s Fund.
His work also includes safeguarding all documents received by the Master in relation to the deceased’s estate, handling inquiries by executors, attorneys, beneficiaries and other interested parties, and appointing impartial and capable individuals. as executors, trustees, trustees, and liquidators.
To note: There are currently 15 masters offices across South Africa. In general, if you were residing in South Africa at the time of your death, your inheritance must be declared to the Master Office in which you were residing 12 months before your death.
Trustees play an essential role in the management and administration of the property bequeathed to your testamentary trust for the benefit of your minor children. As such, it is essential that your Trustees have the proper financial acumen and understanding of the investment landscape. In managing the trust property, your trustees will have the overall responsibility for managing the trust assets in accordance with trust ownership control law, common law and the trust instrument – and, this in doing so, should know and understand the scope of their powers and ensure that they do not act outside their mandate.
It is also important to keep in mind that trustees have a fiduciary duty to the beneficiaries of the trust, which is a heavy legal duty to act at all times in the best interests of the beneficiaries. In carrying out their duties, the trustees will be required to take control of the assets of the trust, open a bank account in the name of the trust and invest the assets for the benefit of the beneficiaries. They will also have to prepare accounts and registers which must be made available to the captain.
To note: Although you can designate the guardian of your minor child as the guardian, it is often advisable to keep these roles separate in order to implement checks and balances and to avoid a single person having complete autonomy and / or decision-making. Ideally, appoint an independent and professional trustee who has experience in managing the assets of the trust.
Anyone who may benefit from a deceased person is called a beneficiary, although it is important to differentiate between a legatee and an heir. When the testator names in the will a person who would not otherwise have inherited in terms of intestate succession, that person is called the legatee. In other words, if the will is declared invalid, the legatee will not receive any benefit from the deceased as it is not recognized under intestate inheritance law. When it comes to liquidating the estate, keep in mind that your executor must first pay your legatees, after which they can distribute the remainder of your estate to your heirs.
To note: For this reason, it is important to ensure that there is sufficient cash in your estate after all bequests have been paid to your legatees to support your heirs as you planned.
On the other hand, an heir is a person who can inherit by will or by intestate succession. This means that, if your will is declared invalid, your heirs will still receive their inheritance according to the principles of intestate succession. Our intestate inheritance laws provide a set of strict guidelines for the order and proportions of your assets to be divided between your spouse and loved ones, keeping in mind that your spouse and children will always benefit first.
To note: Most wills include a remainder clause that states how the remainder of your estate is to be distributed. In the absence of such a clause, your estate may be declared partially intestate and the remainder will be distributed to your heirs in accordance with the laws of intestate succession.
Anyone over the age of 14 who is in their right mind can testify to your will. Your witnesses are legally required to sign your will in your presence, and vice versa. If you and your two witnesses did not sign at the same time and in the same place, your will may be invalidated. Remember that your witnesses are not required to read or understand the contents of your will. Their job is to certify that you signed the will in their presence.
Although it is legally required that you sign the last page of your will in the presence of two competent witnesses, it is recommended that you and your witnesses sign in full on each page and ensure that your will is dated. It is important to note that a beneficiary or the testator’s spouse should not sign as a witness to the will, as this could prevent them from inheriting the will.
To note: If a beneficiary who has signed as a witness to a will is disqualified from inheriting, they will need to apply to the High Court to prove that they did not unduly influence or pressure the testator to sign. the will.