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Estates and Wills
Thursday, February 1, 2007
No Will, no way

The importance of having a valid, up-to-date will can never be over emphasised,” says Yvonne Boden, Director of the Estates Department at Garlicke & Bousfield Inc.

“When a person dies without a will, no executor can be appointed. As a result the beneficiaries have to nominate an executor upon whom they all agree.
“Now this can be difficult to achieve, not only because of inter-family relationships, but also because of practical constraints, such as relatives living overseas, or perhaps some or all of the beneficiaries are minors and therefore lack contractual capacity.
“Inevitably this nomination process delays the reporting of the estate to the Master of the High Court, and until an executor is appointed by the Master, interest continues to run on outstanding debts such as mortgage bonds, overdraft facilities, hire purchase agreements and credit cards. Without an executor, access to funds is not possible and the servicing of these debts is suspended. The effect of debit interest compounding while family members ascertain the requirements of the Master and then decide on the appointment of an executor can be disastrous for a family.”
She says that if a deceased person has no spouse, or major child or parent available to accept the appointment as executor, the Master will require a bond of security from an insurance company to cover the proposed executor’s administration obligations. Obtaining such security can be extremely difficult and costly and would further delay the estate at a critical time for the family.
“Without a will, an estate will be distributed in accordance with the Intestate Succession Act. For instance a spouse married out of community of property, who has children, can expect to inherit a mere R125 000 or a child’s share of the estate, whichever is greater. The balance of the estate will be inherited by the children and if they are minors, that inheritance will be paid into the Guardian’s Fund which is administered by the Master’s office.
The stress and trauma of losing a spouse unexpectedly is bad enough. Having a young family to continue to support, while also negotiating the obstacles created by the absence of a will could finish most people off completely.
Such challenges would include conditions posed by the Master’s office in relation to intestate estates; and, the need to minimise interest costs without the power to do so, amongst other things.
“This can all be avoided by a professionally drafted will, which appoints a competent executor. It can ensure that inheritances left to minor children are managed by professional trustees whose primary objective is the best interests of the family,” she says.
 

Copyright © Insurance Times and Investments® Vol:20.1 1st February, 2007
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