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Everybody should have a Last Will and Testament. Even if you have nothing right now, the time will surely come when you will accumulate assets. If you die without a will, your assets will be dealt with according to what is called intestate succession irrespective of what you might have wanted to happen to your assets.
In your will you can appoint someone to deal with your assets according to your instructions. You do not have to refer to each asset separately in your will. This means that you do not have to wait to accumulate assets before drawing your will. You can draw it right now and refer to your assets in general terms eg you can say that you want to leave "my entire estate of whatsoever nature to my children /parents/brothers/sisters in equal shares". You can change your will as often as you like and should review it whenever your circumstances change
Seven steps in compiling a testament
Appoint an executor
This person will ensure that your last wishes in your testament will be fulfilled. You can nominate your spouse, your adult son or daughter, your lawyer or auditor or even your bank or trust company.
Appoint a guardian
If you have minor children, it is of the utmost importance that you plan for their care. Your testament gives you the opportunity to appoint someone for the loving care of your children in case of your death.
Compile a list of assets and liabilities
Make a complete list of everything you own as well as all your short- and long-term debt. Your assets include fixed property, personal belongings, vehicles, life policies and savings. Your liabilities include house bonds, bank loans or unpaid taxes.
Appoint your heir
Make provision for your heir to receive the inheritance before any other bequests are paid out.
Consider friends, churches, educational- and charity organisations
You might decide to leave an amount or specific item to a loyal friend, a faithful worker, your favourite charity organisation or educational institution. Make sure that you are in possession of the person’s or institution’s correct name and address for inclusion in your testament.
Instructions regarding your burial/cremation must be set out clearly
If it is your wish to donate your organs, include this in you testament, inform your family members, and doctor about your decision.
Consult your lawyer
It is also advisable to consult your lawyer regarding the compilation of your testament
Importance of a testament
Whether you are considering a bequest to the UFS or not, it is of the utmost importance that you have a valid testament.
If you die intestate (without a valid testament), the Master of the Supreme Court will appoint an executor to handle your estate, in accordance with the rules for intestate hereditary succession. This ruling, in most cases, will not agree with your last wishes or the needs of your family members. A valid testament gives you the peace of mind that your wishes will be executed after your death.
A valid testament needs to comply with the following requirements:
• The testament has to be in written format
• The testament must be signed in the presence of two witnesses
• Verbal wishes have no legal influence or consequence
Remember that your testament should be reviewed on a regular basis and updated in order to consider new legal developments. This includes amongst others the inclusion of capital gains tax, which means that the capital gains tax and estate duty are payable after a person’s death.
Changes in your personal life, like divorce, remarriage, death of the executor or the inheritance of certain possessions that are no longer in your possession can lead to your testament being declared null and void.
For these reasons, it is important to review your testament regularly to ensure that it is correct and a reflection of your wishes.
What Does the Executor of the Estate Do?
The executor of an estate, also referred to as the personal representative of the estate, is chosen by the testator or creator of the last will and testament. The chosen individual is responsible for a wide number of services for which he is typically paid a fee or given a bequest in lieu of a fee. If a fee is involved, it is typically determined by the laws of the state of residence of the testator, the testator’s decision, or a decision made by the beneficiaries of the estate.The services that the executor must perform will involve both the assets and the debts of the estate. The responsibilities of the executor are serious and time consuming in many cases. This selection should be given a great deal of thought since the best interests of the heirs should be protected.
If the testator is using an estate planner or an estate planning attorney, together they should be able to determine the proper candidate for the job. In addition to filing each of the required documents with the appropriate probate court in a reasonable timeframe, the personal representative of the estate must also complete several other tasks, each of which is explained below.
Services Related to the Assets of the Estate
The executor must determine what the assets of the estate are. He is also responsible for protecting the assets until probate has been completed. In some cases, he might be responsible to invest the assets of the estate until that time when they will be dispersed among the beneficiaries of the estate. He is also responsible for distributing the estate assets to those who are to receive them.
The values of all assets including real estate and business interests that will be subject to probate must be determined. Therefore, the personal representative must obtain appraisals of each item. This is often referred to as obtaining the date-of-death values.
The date-of-death values of any non-probate items must also be determined if the estate is taxable. This will include any business interests or real estate.
Services Related to the Debts of the Estate
The executor is required to determine what debts relating to the estate are owed as well as whom they are owed to. He is then responsible for making the payments on each of the debts that have been accrued by the testator. This includes all of the preparation that is involved in determining the debts owed as well as the exact amounts.
Any debts or payments that are due for the estate must be paid by the executor even if he must incur out-of-pocket costs. In many cases, the assets of the estate are not available to pay these expenses and so, the executor must find a way to raise the cash in order to pay off these debts. These costs will be repaid from the assets of the estate.
In some cases, these expenses will be ongoing until the probate of the estate is closed. It is the responsibility of the executor of the estate to identify which expenses will be ongoing ones so that they will be paid in a timely fashion. Administrative expenses are one example of an ongoing expense.
The personal representative will need to asses the value of any liabilities associated with the income or estate taxes. All required income tax and estate tax forms will need to be completed and filed by the executor of the estate. This activity will include assembling all of the necessary papers together.