It is puzzling to me that so many people do not have an up-to-date will. Even worse is that many do not even have a will at all.
The problem of dying without a will is that you cannot be sure what will happen to your money. There is no guarantee that all your money will automatically go to your spouse because others may have a claim. Worse is if you have no family, the state could take it all after a period of time.
Whether you are single or married or have few assets, if you die without a will then the law decides how your possessions are distributed. There will also be delays while the courts decide to appointment an executor.
An executor is the person responsible for winding up an estate. He is tasked with taking control of all your assets, collecting any funds owing to you, redeeming investments and selling assets where necessary. An executor also needs to obtain valuations on assets that will not be sold.
Once this is done, an executor must ensure that all debts and liabilities are paid and that final tax returns are completed.
This is all documented in a liquidation and distribution account which needs to be submitted to the Master's office before the assets can be distributed to the beneficiaries.
When appointing an executor, one often feels obligated to nominate the person drawing up your will. This should not be the case. I believe you should nominate someone who has a major interest in your estate.
The obvious choice for married couples is to nominate the other spouse because they are likely to know more about your financial position than anybody else.
A spouse may not have any experience of how to administer an estate, but this is not critical. A spouse could request a professional executor to wind up the estate.
For me, the most important aspect of having a spouse or a major child as an executor is that they have some control over the process. Far too often, professional appointments take too long to wind up the estate. The spouse would be free to choose someone to act for him or her instead of being tied to someone the family no longer has dealings with.
There may be many reasons why you appoint a professional. If you do, then may I suggest you negotiate a fee with them at the time of them accepting the appointment while you are still alive. It is far easier for you to negotiate the costs than to leave it to your spouse or children to do the negotiating.
I can assure you that this approach will save your loved ones a lot of heartache.
l The writer is a director of Pioneer Financial Planning. Visit www.pioneer.co.za or e-mail firstname.lastname@example.org