The ABCs of setting up a will

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Financial planning can be a bit daunting. While younger people often start out looking into savings, investments, and insurance, important aspects of financial planning such as setting up a will tend to get left behind — perhaps because it’s not thought of as something to worry about earlier on in life.

To help you understand the basics of setting up a will, we spoke to experts Jeffrey Wiseman, CEO of Momentum Trust; Kyle Abrahams, attorney and legal advisor at BDO Wealth Advisers; and Clare Cousins, certified financial planner at Veritas Wealth Management.

 Q: Is there a difference between a will and a testament?

Abrahams: Nowadays, “will” and “testament” are used interchangeably. It is a legal document that outlines your wishes as to how your estate should be devolved upon your demise. In earlier times, a “will” was seen as a separate document that included your wishes or instructions on how to devolve your real estate, whereas a separate document referred to as a “testament” was used to include your wishes on devolving your personal effects or estate. Presently, the two documents are used as one single legal document and referred to as a “last will and testament”.

Q: Why is it important to set up a will?

Cousins: It is essential to have a will even if you do not own a significant amount of assets. If you die without a will, or without a valid will, your belongings and assets will be left intestate. Intestate laws will then determine how your assets will be distributed, and what proportion of your assets will go to your spouse, children or relatives. If you have minor children and you die without a will, the state will appoint a guardian, and this may not be someone that you’d choose. Also, in the absence of a will, any assets that your minor children could inherit would be held in the state-controlled guardian’s fund. Some — or all — of these decisions may not be in line with your wishes, and could put your family and loved ones under emotional (and possibly financial) stress. This is a complex area that needs specialist advice, and a will is an important legal document. You should not try to draft a will yourself, nor should you use a template off the internet. 

Q: Who should have a will?

Abrahams: Younger people will most likely have smaller estates, but anyone who adds value to their estate should execute a valid will, whether it is only a vehicle and bank account in their name. We are seeing more of the younger generation (especially millennials) acquiring assets such as cryptocurrency. This is an intangible asset with value and therefore forms part of your estate.

Q: Is it difficult to change a will?

Abrahams: Unlike any other legal document, a last will and testament is not subject to lengthy legal procedures should you want to change it. As your circumstances change you can easily amend your will to provide for these changes.

When to set up a will

“Understandably, nobody wants to think about their own death, let alone plan for it,” says Wiseman. “Uncomfortable as the exercise may be, clarifying what should happen to your belongings can be rewarding, leaving you confident that your assets will go to the right people and places.” If you still need a push, certain life events are a good reason to write a will:

  • When you turn 18. Even though you may not have many assets at this stage, you may still want to indicate how your remains should be handled or what your wishes are around medical treatment when you can no no longer give your consent
  • When you start working
  • When you have accumulated some money or other assets
  • When you get married (or divorced or remarried)
  • When you have children (and again when they become adults)
  • After you start a business
  • When buying a home

The important details to include in a will

Not sure what information needs to be included in a will? According to Cousins, the following are necessary:

  • Your full name and date of birth 
  • The beneficiaries of your estate and which assets, or proportion of your estate, you wish to leave to the various beneficiaries
  • How your liabilities will be settled
  • Substitute heirs — those who will inherit if the primary beneficiary cannot accept the inheritance
  • A legal guardian for your children, if they are minors. This should be someone you would be happy to entrust with your children’s care if both parents were to die. Before you draw up your will, you should discuss this with the guardian/s whom you have selected to make sure they are comfortable acting in this role. You should also ensure that there are enough financial resources to pay for your children’s education and expenses — if not, you should make the guardian you have selected aware of this and obtain their agreement to assume these financial responsibilities
  • An executor, whose role will be to take over your affairs when you die
  • Your funeral wishes

Importantly, if you are married, you need to make sure that your wishes for the distribution of your assets do not clash with your marriage contract, which will override the will.

For detailed information or to set up a will, it is advisable to contact a professional.

This article first appeared in the September 2021 print edition of S Mag.

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