Stop being fearful of the process of drawing up a will

Growing up as a millennial I was told saving for retirement was the most important aspect when it came to your personal finances. The discussions that adults were having around me were about their plans and dreams after retirement. At gatherings with Baby Boomers and Generation X individuals, I have heard comments of what their financial adviser told them with regards to retirement savings and other snippets read in newspapers or on social media with regards to retirement products. The current topic Generation Z individuals are debating around the braai area is about shares and how you can get a quick return on your hard-earned investment. Even to this day I hardly have encountered individuals who have mentioned the topic of estate planning or wills in a social environment. As a financial adviser, I have gained insight into the importance of planning for your estate as an essential part of any financial plan. Estate planning means preparing yourself by putting certain products and documents in place to ensure your loved ones are taken care of when you have passed on.

I often question how this topic has been avoided in the midst of the global pandemic.  With uncertainty surrounding us, estate planning should be one of the first priorities on every individual’s mind that has responsibilities with regards to family and loved ones. But as humans, we tend to believe that the events taking place will never happen to us. I myself was such an individual until I almost lost my Mom to Covid-19 a month ago. It is only then when you realize that nobody is safe from this virus and its mutations.  I want to encourage you to speak more freely about the measures you have put in place to secure your estate and the future of your loved ones. Ask the question to your neighbour when you meet for a social event, regarding what value-adding facts his financial adviser has given him in terms of his will or life policy. We need to break this avoidance of discussing such important issues that we believe are private with regards to this topic and see this as an opportunity to grow through discussion and debate with individuals that have our interests at heart, allowing all to grow in the process.

Having said this, let touch on the basics required to start the process of getting your estate planning in order and getting the conversation started with your financial adviser. An estate is the assets and liabilities that you have accumulated or in the process of doing, throughout your lifetime. My focus for this article is ensuring that you have a last will and testament in place indicating how these assets and liabilities should be dealt with and how the proceeds should be distributed to your loved ones. In meetings with clients through the month of February I asked if they had a will in place. I found that 11 out of the 16 clients said that they did not have a will while 5 out of the 11 clients never set up a will as they dreaded the process and were uncertain of where to begin. They thought setting up a will would be a tedious exercise and that they did not have time to do it. I also found that 6 out of the 11 clients (which were under the age of 35) did not have a will in place as they thought of themselves being too young and had too little assets to put in a will.

Setting up a will is as easy as discussing your wishes/requirements and thoughts with your life partner (if you are still single, think about your own circumstances and requirements), discussing these wishes with a financial adviser in a meeting and completing an application form. After this the will is drafted and sent to you for your perusal and confirmation of the contents and finally your signatures. There are cases where it could be a little more time consuming if you have complex trusts and unique family dynamics to provide for. You can also never be too young to set up a will, as one can be drafted from the age of 18. A will is a document that can be changed multiple times as your situation changes throughout your lifetime. Even if you only have as little as two assets and one main liability, you can set up a will. Again, this should not deter you from actively taking a professional approach to your personal independence and the process of setting up a will.

The reason I am so adamant that our society should start prioritizing the availability of a will, is the consequences of dying without one being in place.  You know that distant cousin that you are not fond of, the one that never wishes you a Happy Birthday, yes even she has a chance of inheriting something from you if you die without a will. Do I have your attention now? If you were to die without a will your estate will be dealt with as an Intestate Estate and the laws relating to intestate succession will apply. According to the Intestate Succession Act, the estate must be divided between the deceased’s spouse and dependants. The surviving spouse inherits the greater of R250 000 or a child’s share. A child’s share is determined by dividing the total value of the estate by the number of the children and the surviving spouse. If the spouses were married in community of property, one half of the estate goes to the surviving spouse as a consequence of the marriage, and the other half devolves according to the rules of intestate succession. If there is no surviving spouse or dependants, the estate is divided between the parents and/or siblings. In the absence of parents or siblings, the estate is divided between the nearest blood relatives.

I want to encourage each and every person reading this to ask themselves if they can afford not to have a will in place. Contact your financial adviser as a matter of urgency and give attention to this important aspect of ensuring financial stability in your life, regardless of your age or financial position. Have your circumstances since changed? Contact your financial adviser to update your current will. As I said, there are no limits to the number of times you can update your will. Please do not be one of the statistics where a person has passed without a will. I really hope I have given you the insight and urgency you needed to have this conversation with your loved ones and financial adviser. It is your choice if will they remember you as having dealt with this matter with them and their future in mind.

The opinions expressed in this document are the opinions of the writer and not necessarily those of PSG and do not constitute advice. Although the utmost care has been taken in the research and preparation of this document, no responsibility can be taken for actions taken based on information in this article. Always remember the prudent way is to consult your portfolio manager before investing. PSG Wealth Financial Planning (Pty) Ltd is an authorised financial services provider. FSP 728