We all like to think we have plenty of time, but the truth is, life is unpredictable. There is a saying I heard a couple of weeks ago, and it stuck with me and has left quite the impact on me: the days are long, but the years are short!
As a mom to two young boys, who keep me very busy, these words reminded me that even though with all the busyness of life, work, homework, pick ups and drops offs, and other extra mural activities that sometimes leave us feeling overwhelmed, take a moment and remember: the days might feel long because of all that we need to get done, but remember, the years are so very short!
It’s a reminder of how quickly life passes by, and how important it is to plan for the future while we still can.
Whether you’re a parent, a spouse, or a single person building your wealth, a Will is an essential part of your financial planning, unfortunately, only 15% of South Africans have a Will in place when they die!
I encourage you to take the time to draft one and revisit it regularly as your circumstances change. This small step will give you peace of mind, knowing that no matter what happens, your loved ones and your legacy are secure.
When we talk about financial planning, we often focus on budgeting, investing, and making sure we’re on track to meet our goals. But there’s another aspect that’s just as crucial, and often overlooked: having a Will in place.
1. Parents with Minors: Protecting Your Children’s Future
If you have children, especially young ones, having a Will is essential. It’s not just about who gets your assets, but about who will care for your children if something happens to you.
Scenario: Imagine you and your partner both pass away unexpectedly. Without a Will, the courts decide who will take care of your children, and this might not align with your wishes. By drafting a Will, you can appoint a guardian—a trusted family member or friend—to raise your kids. This gives you peace of mind knowing your children will be in the hands of someone you’ve personally chosen and shares the same values as you.
In addition to guardianship, a Will allows you to set up a testamentary trust. This ensures that any assets left to your children are managed responsibly until they’re old enough to handle their own finances. You don’t want your 18-year-old to receive a large lump sum without guidance, do you?
2. People Without Kids: Securing Your Legacy
Even if you don’t have children, having a Will is still crucial. Your assets need to be distributed according to your wishes—whether to family members, friends, or charities you care about. Without a Will, your estate will be divided according to the Intestate Succession Act, which might not reflect your personal relationships.
Scenario: Let’s say you have a close friend who has been there for you through thick and thin, but no children or spouse. If you die without a Will, that friend could be overlooked, and your estate might go to a distant relative you haven’t spoken to in years. A Will lets you leave your assets to the people and causes that matter most to you.
3. Marital contracts and Wills
When one partner in a marriage passes away, the way their estate is handled depends on their marriage contract.
For those married in community of property, remember that everything owned together is combined into one joint estate. So, when a spouse dies, the joint estate is wound up, and once all debts and costs are settled, the surviving spouse gets 50% of the estate. The remaining 50% will be distributed according to the deceased’s will, or, if there isn’t one, based on the rules of intestate succession.
Now, if you’re married out of community of property without accrual, things work a little differently. Your estate will be wound up based on your Will or intestate succession laws, but it won’t affect your partner’s estate at all.
The accrual system can seem tricky, but it’s actually designed to be fairer because it ensures both partners share in the growth of what they’ve built together during the marriage.
Here’s how it works: when one spouse dies, the executor looks at what each person brought into the marriage (as stated in the ante-nuptial contract) and calculates how much each estate grew during the marriage. This growth is then split equally between both spouses.
Why Procrastinating is Risky
I know it’s not easy to think about death, but procrastinating when it comes to drafting a will can have real negative and hurtful consequences. Not only can it lead to family disputes, but it also places unnecessary emotional and financial burdens on your loved ones during an already difficult time.
PS: You know what’s more dangerous than not having a will? Having a will that is not updated to your current wishes! This is because if someone doesn’t update their will, individuals who they no longer have a relationship with could end up inheriting from their estate. - So be sure to update your Will whenever there are major life changes i.e. birth of new children, divorce, death of someone who was meant to be a beneficiary in your Will etc.
PPS: Join us for this year's Women & Money Brunch. Use code: 150Coupon to get a R150 discount!
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