Where there’s a will, there’s a way ahead for your loved ones

Where there’s a will, there’s a way ahead for your loved ones

Private Property South Africa
Kerry Dimmer

Adolf van Niekerk, Head Business Development Virtual Distribution - Absa insurance and financial advisers (AIFA) Absa Relationship Banking answers strategic questions about the value of a Last Will and Testament.

  • Why is it essential to have a Last Will and Testament as a property owner?

In response, I refer to Maslow's Hierarchy of Needs: The first basic need for every person starts with physiological needs, those being water, food and shelter. The second refers to safety, such as personal security, employment, and property. What every property owner must realize is that when they pass away, their loved ones and dependents will have concerns around whether they will still have a roof over their heads, and/or whether they will be able to continue to live on the property and utilize it. Other concerns are whether a will exists, that clearly states what must happen to the property, who the new owner of the property will be, and how an existing bond will be paid.

To provide loved ones and dependents with peace-of-mind, it is critical therefore, to have a Last Will and Testament, regardless of whether you own a property or any number of properties.

  • What is the essential knowledge relative to a will?

The most crucial step is to ensure that a couple of closely trusted relatives or friends are aware that you do have a will and who the executor is, as well as where the will is stored.

A Last Will and Testament is best drafted in combination with an Estate Plan, which is ideally composed with a trusted advisor (who can also provide the executor with guidance and help when the estate is being wound up). This combination is essential to ensure the executor will be equipped with funds to settle any fees that will become compulsory and to distribute the property, and pay any outstanding liabilities, without hassle.

Some of the fees include:

  • Outstanding bond(s) settlement
  • Outstanding liabilities such as overdraft, credit card and personal loans
  • Estate duty, if applicable
  • Capital Gains Tax, if applicable
  • Executer fees
  • Transfer fees
  • Rates, taxes and levies
  • Conveyancing fees.

The executor is also able to assist the family with living expenses while the estate is being winded up.

This Estate plan, together with a valid signed will, will assist the executor to execute the wishes as per the will, and assists the family with advice when bank accounts are frozen (such as submissions of a death claim with various life insurance companies as should be stated in the estate plan).

A Last Will and Testament is optional, but in my opinion, it should be law as there can be no dispute over the wishes of the deceased and will avoid unnecessary confrontations among the heirs.

  • Is the drafting of a will the responsibility of a home owner, or can Absa provide such?

It is the responsibility of an individual to ensure they have a valid signed will in place, and Absa can produce such, on behalf of their clients. This is an ideal solution because under those circumstances it is Absa’s responsibility to ensure the will is kept in safe custody and can easily be traced. The customer also has the flexibility to review his/her will via the online banking application.

It is standard procedure at Absa to remind our home loan applicants to create a valid will, and offer the drafting of such if required. If the client chooses to appoint Absa as executor, there are no drafting fees.

Currently, in this Covid-19 time, Absa offers to collect the will at the premises of the testator/testatrix at no cost and deliver to the bank’s safe custody premises. The safe custody fee is R115 per annum (including VAT).

  • What should be included in a basic Will and Testament?

The basics of a will is a long list, and includes:

  • It must be clear as to who will inherit what. Keep it simple and be clear when it comes to specifications. For example: I, (name of person), bequeath my Mercedes Benz 350s, 1980 model, to my son, (name of son), ID number XXXXXXXXX.

  • Clearly indicate the beneficiaries, heirs, and legatees’ full names, ID numbers and your relationship to them. The same applies to the testator and testatrix.

  • Name the executor. Bear in mind that this is a huge responsibility, and it is advisable that you appoint an executor with the necessary knowledge, skills, and experience.

  • Name the trustees after determining whether a testamentary trust should be created in terms of the will.

  • Name the guardians of any minors.

  • Sign in full on the last page, but do not initial this page.

  • You must state that you revoke all previous wills.

  • Every page, except the last, should be initialled.

  • Two witnesses must be present when signing a will.

  • If you amend the original will, make sure to sign the amendment. Two witnesses must also sign. Note however, that it is advisable that a new will is drafted in preference to an amendment, and again revoke the old will if there are numerous amendments.

  • Witnesses must be 14 years or older and should sign everywhere you sign. They must also not be beneficiaries of your estate, as this can cause disputes and the legitimacy of the will could be challenged.

  • Clearly date your will on the last page and destroy all previous copies.

  • Also required, is who should receive any residue of the estate.

  • The original will must be kept in safe custody, and loved ones should know where that is.

  • Why is it preferred not to have a family member as an executor?

Family members are often not familiar with the complexities and intricacies of winding up an estate. You want someone who is of sound mind, who will not be emotional or influenced, who is completely impartial and can understand the various tax and legal implications that must be accounted for. The overall process has many steps that need to be diligently followed. Failing to adhere to the process will result in the estate not being wound up correctly and the executor to face litigation.

If you do appoint a family a member as executor it is preferable to make them a co-executor to, for example, Absa executorship that will administer the estate without burdening the family member with the intricacies.

  • How long does it take for an Estate to be distributed and finalised?

This depends on the complexities, if there are no complications, sufficient funds and liquidity, it can take anything between six months to a year. When exceeding this time frame, it is likely due to disputes and court cases, or that there was insufficient liquidity and cash in the estate to pay creditors and fees related to the winding up of the estate. Delays are also caused when the validity of a will is challenged.

  • What happens to the home loan in the period between the owner being deceased and their wishes enacted?

Once you report a death, all creditors must be notified and paid during the winding up of the estate. The debit order for the home loan may be accumulated until the estate is resolved but rates and taxes will be ongoing. The executor will request a family member to pay those bills and to keep record of the payments, which can be claimed from the estate. Again, I reiterate that liquidity in the estate is crucial.

  • Is it best to have the home loan and the will with the same bank and why?

Yes. Winding up an estate is a complicated process. If all your accounts are with one bank, it is easier for the executor to wind up the estate, gather all the details and distribute.

  • If there is outstanding debt on the home loan, does the beneficiary of the will inherit this problem?

If there was no proper estate plan and valid will, and the family or estate does not have cash to settle the debt, it could result in the property being sold at an auction and usually at a discounted price which often is not fair market value.


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