• Sharebar
Estates and Wills
Friday, February 1, 2008
No will of your own

“Absolute control over the acquisition and disposal of your assets is something you enjoy during your lifetime only,” says Yvonne Boden, Estates and Trusts Director at Garlicke & Bousfield Inc Attorneys. Over the years, judicial and legislative intervention has qualified the long established principle of freedom of testation, and the provisions of your Will are not the final word on the distribution of your estate.
The Court illustrated this in the Edmund Scarbrow judgment when it held the terms of a Will to be invalid because it unfairly discriminated against females and people of the Jewish faith. Mr Scarbrow’s decision to create a trust in his Will to provide bursaries for deserving male students who were of European descent and who were not Jewish was overruled by the Court. It held that while he was at liberty to sponsor such students during his lifetime, on his death this decision became a matter of public concern and his selection was invalid.
Comments Boden, “Similarly during your lifetime the decision to contribute towards a pension or provident or other retirement fund governed by the Pension Funds Act does not necessarily give you the right, on your death, to choose the recipients of such funds.” The Pension Funds Act provides that on your death your retirement benefit will be awarded by the Trustees of the Retirement Fund to your dependants and the identity of those dependants is prescribed in the Act, not by you.
She says the signature of a beneficiary nomination forms does not alter the position legally. If you have dependants, the Trustees will award the retirement benefit to such dependants in such proportions as the Trustees deem equitable, despite the fact that your nomination form may specify a different result. Furthermore if those dependants are minors, or if the Trustees of the Fund deem this appropriate, they are empowered to pay the retirement benefit to a trust established on behalf of your dependants. Control over the decisions of the Trustees does not lie with you, the contributing member, and this may influence your selection of beneficiaries or the manner in which your estate should be distributed.
The planning of your estate is a composite exercise which must embrace all these factors – the assets that you do control and those that you do not, and in the case of the latter, an assessment of the likely recipients of such assets. Liquidity demands in your estate are dramatically affected if your cash resources such as insurance policies and retirement funds are paid outside of your estate. The need for an accurate assessment of this cannot be over estimated, particularly when minor children are involved.

Copyright © Insurance Times and Investments® Vol:21.1 1st February, 2008
578 views, page last viewed on March 30, 2020