Last Will and Testament

[cvw777]

Hi guys,

I'm currently in the process of setting up my (and my wife's) last will and testament, but admit that I know very little about this. I have been told to ensure that one or co-executors must be responsible family members (with one preferably an auditor or attorney) as external executors do not carry your interest at heart.

Our estate is not massive (it is probably on the small side) and we do not have complications to our setup (i.e. only my wife and I in our current and only marriage) and we only have 1 child (4 yo daughter). We both have 2 siblings each and parents that are alive.

We are also immigrating this year as we have received our PR visas for Aus, so not sure what effect this has (apart from the obvious one - who takes custody of our daughter).

What else must I remember to cover and include? What are some good tips or advice?

Thanks in advance.

 

[Grouter]

Please make sure you spell my name correctly - I'll PM you...

Seriously - We used an attorney. Many will do it for free if you make them an executor. In my experience, making a family member an executor is a disaster. Most lay-people have no cooking clue how to execute an estate. It ends up in the hands of attorneys in the end.

 

[AchmatK]

Witnesses signing your will should not be any of the beneficiaries. Was told this by the person doing my will.

My circumstance are very similar to yours.

We ended up drafting 3 wills. One for each of us if we one of us die and another if we both were to die at the same time. Think car accident. If either of us die then the living spouse will remain as the parent of the children but if we both die then we need to appoint a guardian. Also first confirm this with the person you choose to be the guardian.

 

[cvw777]

Thanks for the responses offered so far. This is the kind of feedback that I value. So far, I will ensure that:

• I think carefully about appointing family as it appears to be a double-edged sword.
• Have non-beneficiary witnesses sign the wills.
• Consider multiple wills for 1 to pass, or if both should pass.

 

[Grouter]

My wife and I have a single combined will. If she pops her clogs, I get the lot, and vice-versa. If we both shuffle off together there are nominated beneficiaries. Best you consult with an attorney regarding having multiple wills - who knows which one is valid in the event of extraordinary circumstances you may not have foreseen?

 

[maumau]

We had a nightmare on my mother's estate where my brother was executor.

One word - DO NOT DO EEEET!!!

 

[Grouter]

Yep - finalising a person's estate is a job for a professional. I fail to understand why people nominate friends and family as executors. I guess they think it's like making your best mate your best man or bridesmaid. It's not.

 

[Grouter]

as external executors do not carry your interest at heart.

Your "interests" should be explicitly outlined in your will to avoid confusion - that is precisely why you make a will. Then no-one is confused.

 

[cvw777]

Thanks. It seems a lot of responses recommending not to appoint family member(s). Some real food for thought.

 

[SafariTin]

Thanks. It seems a lot of responses recommending not to appoint family member(s). Some real food for thought.

Appointing a friend / family member allows for opportunity to negotiate executor's fees. If the legal firm / auditor is automatically appointed as executor then they can claim (and often do) the max allowed fee of 3.5%.

Where the estate runs into millions the family member / friend who is appointed as executor can still outsource this service, but can then negotiate a lower percentage or fixed fee with the appointed firm. (imagine a estate of R10m - the executors fees is then R350k vs R35k on a R1m estate.)

But there is also the argument that improved estate planning should be done once the estate goes over R3,5m which results in both lower estate duty and lower executor's fees.

 

[gboy]

Yes and avoid all these services, you see on the internet. We look after your will ect. Just do it properly with a paid attorney who specializes in this.

 

[HavocXphere]

Pretty sure OP has sorted this by now...but for future googlers:

Not sure where the whole auditor story in this thread is coming from. Auditors don't do this sort of stuff. Auditors are CA(SA)s by default though and estate tax is part of the training so on paper they have the knowledge on a theoretical level. Practically lawyers and banks tend to do it more.

Practically the whole appoint family/friends is a train wreck in my experience - if they attempt it on their own. Not aware of the law providing for a way to be legally nominated as executor yet delegating it as suggested by others above. Probably possible but not aware of a clean legal mechanism for it.

Other things to keep in mind is that "the whole appoint family/friends" seems good...until you realise everyone is grieving at that time. Talking about money is the last thing family needs. And yet simultaneously the more materialistic members of the family tend to crawl out of the woodwork at this stage. So it has to be simultanously about money yet not. Having an impartial external party deal with all this sht is helpful in that regard.

...and it may be worthwhile just taking the hit on the legal max rates allowed to that end. (for smaller estates)

One thing to watch though is that commercial providers tend to firesale it all for cash and split the cash. Meanwhile you know perfectly well granny never drove that car above 60kmh and took it for services religiously. So taking the asset instead of the firesale cash price is better.

If you write a will I'd specifically write that into it - something along the lines of if all beneficiaries agree assets may be taken in specie rather than sold. It's technically not needed (law doesn't prescribe sell it & split cash) but it'll help convince retarded executors that this is an option.

@cvw777

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[Londo]

Appointing a friend / family member allows for opportunity to negotiate executor's fees. If the legal firm / auditor is automatically appointed as executor then they can claim (and often do) the max allowed fee of 3.5%.

Where the estate runs into millions the family member / friend who is appointed as executor can still outsource this service, but can then negotiate a lower percentage or fixed fee with the appointed firm. (imagine a estate of R10m - the executors fees is then R350k vs R35k on a R1m estate.)

But there is also the argument that improved estate planning should be done once the estate goes over R3,5m which results in both lower estate duty and lower executor's fees.

I'd say that a legal firm, or a bank who have inserted themselves as executor WILL claim the full fee allowed by law. Appointing a competent friend or relative allows for same to negotiate the fee with a selected professional to handle the wind up of the estate.

I am not a lawyer but I have handled 2 estates. The first one was a friend's and I did some of the work but hired an attorney. It was a small estate and he got the full fee. Earned it the hard way and there was an ex-wife from hell in the picture. If I had known how difficult she was I'd turned down the request.

The 2nd time was my mother's estate. I got some guidance from a book some guy had written. An uncontested estate is not difficult to wrap up. It is a step by step process, mostly handled by some mid level person in the lawyer's office. Lawyers and banks play up their role as executors to justify the fat fee they collect. There is a reason many will draw up a simple will for free if they are made executors. That fee is where the bigger money is.

The Cape Town Master's Office was still functional about 10 years ago. How it is now, I don't know. I think that is where the challenges can come from - the dysfunctional bureaucracy needed to rubber stamp the process.

 

[Swa]

Appointing a friend / family member allows for opportunity to negotiate executor's fees. If the legal firm / auditor is automatically appointed as executor then they can claim (and often do) the max allowed fee of 3.5%.

Where the estate runs into millions the family member / friend who is appointed as executor can still outsource this service, but can then negotiate a lower percentage or fixed fee with the appointed firm. (imagine a estate of R10m - the executors fees is then R350k vs R35k on a R1m estate.)

But there is also the argument that improved estate planning should be done once the estate goes over R3,5m which results in both lower estate duty and lower executor's fees.

The key is a competent executor and not whether it's a family member or a legal firm. Most people appoint lawyers as executors which are actually not competent to be executors. The fee is also a default one and can be stipulated in the will. Being in the process with an incompetent executor this is what I've been able to find out for future reference for anybody else.

The executor is supposed to act in the interest of the beneficiaries and not in their own. Beneficiaries who therefor feel that the executor isn't doing that or they are doing all the work like we are can have them removed and appoint their own.

The "fees" of 3.5% and 6% are actually not fees but remuneration for managing the estate. It IS NOT the only fees that they can charge. That is why executors will try to keep an estate going for as long as they can because it requires more work, and we all know lawyers charge for everything they do. E.g. a property that has to be transferred they may charge their standard fee for doing so. Even something like a phone call or an appointment can incur a "service charge". Many people don't know this and assume that it's a fixed charge and beneficiaries never check up on this.

As an executor you become the custodian of any asset in an estate. An executor becomes the legal owner of any property for the purpose of administering the estate and they can dispose of it to cover costs if they see fit to do so. Lots of people have lost their properties or houses in this way due to bogus fees. By having a competent person appointed they can even get creditors to write off debt or have it reduced as creditors know that bankrupt estates don't pay anything and they may have to wait years if they do.

This is something people don't know but not everything has to be done through the estate. Executors try to do as much as possible through the estate because it's more remuneration for them and everyone is happy to oblige by that. It's entirely possible however to transfer a property or a car with just the will and death certificate. Most companies will also be happy to oblige by this and close or transfer bank or stock accounts with only these.

And as people said the executor and beneficiaries can't sign as witnesses. Executors can be beneficiaries however and both can sign as testators.

 

[midnightcaller]

The 2nd time was my mother's estate. I got some guidance from a book some guy had written. An uncontested estate is not difficult to wrap up. It is a step by step process, mostly handled by some mid level person in the lawyer's office.

Can you share details of the book that you used?

 

[Londo]

Can you share details of the book that you used?

I searched my emails and found the email address. I emailed and the email came back. The business was called deceasedesatediy.co.za I no longer have the book. It was in 2009

But in trying to find them, I came across this option. A middle road option to complete DIY. Needles to say, I cannot recommend them but I see a testimonial on their website. From the website:

Standard Option: R 10,000-00 (Do it yourself, with periodic reviews by our specialists. Suitable for simple estates with a will, with some financial or legal complexity): We provide you with access to our website which has a fully detailed process, designed for first time Executors, with all the guidance, templates and FAQ’s you will require to execute on the Estate. At the start, we will review the Will and provide guidance on the best approach to minimise cost and time. Then as Executor, you will complete and submit all documentation, and perform all administration related to the Estate, and during this process, we have specialists available to answer any questions and review the documentation you have completed, to ensure you are not rejected at the Masters Office for technical reasons. Our service will painlessly and efficiently lead you through the entire process, while monitoring your progress to provide you the best possible experience.

https://deceasedestatesadministration.co.za/our-services

 

[Londo]

The key is a competent executor and not whether it's a family member or a legal firm. Most people appoint lawyers as executors which are actually not competent to be executors. The fee is also a default one and can be stipulated in the will. Being in the process with an incompetent executor this is what I've been able to find out for future reference for anybody else.

Absolutely true.
Off topic. This applies to hiring an attorney for any purpose. Hire one who specializes/has experience in the what you need help in. Like in any field, it is probably rare that a hungry hungry for business will turn down work because he/she not the best person for the job.

And, if you are in a fight, get an attorney with teeth. There is nothing worse than trying to light a fire under a natbroek.