Understanding the Significance and Legal Implications of Last Will and Testament in Estate Planning

Introduction

The Last Will and Testament is an integral component of estate planning. It serves as a crucial tool to achieve various goals, including minimising estate duty liability, providing for dependents, and ensuring the efficient administration of the deceased's estate. This legal document, often drafted by a testator, undergoes periodic review and updates to align with changing circumstances and preferences.

Executing a Valid Will

The Wills Act 7 of 1953 outlines the formal requirements for executing a valid Last Will and Testament. A person can legally execute a Will from the age of 16, provided they are mentally capable of understanding their actions at the time of signing. A Last Will and Testament must be in writing and the signature of the testator/testatrix must appear on every page of the Will as well as at the end of the Will. The document must be signed in the presence of two or more competent witnesses. Witnesses aged 14 or older, must not be incompetent to give evidence in a court of law when signing as witnesses and must attest the last page of the Will, in presence of the testator/testatrix and of each other.

Preventing Intestate Succession

Failure to execute a valid Will leads to intestate succession. This means that the laws dictate the division of the estate among the surviving spouse, dependents, and other relatives. The Intestate Succession Act 81 of 1987 specifies the distribution, with the surviving spouse inheriting the greater of R250,000 or a child's share.

Nominating Executors

A valid Will should nominate an executor to avoid the appointment of an executor "dative" by the Office of the Master of the High Court. The testator can define the executor's powers, exempt them from providing security, and grant the power of assumption. Executors are entitled to remuneration, and are responsible for various duties, which include: reporting the estate to the Master, notifying creditors, and distributing inheritances. It should be noted that if the Executor is a lay person, he/she should be assisted by an Attorney, Trust Company or Accounting Firm.

Heirs and Legatees

Distinguishing between legacies and inheritances is crucial in estate planning. Legacies are specific items or cash amounts bequeathed to legatees, while heirs inherit the residue of the estate after debts and legacies are settled. Bequests must be carefully considered to ensure the estate has sufficient liquidity, especially when dealing with encumbered assets.

Protection of Minor Beneficiaries

To protect minor beneficiaries, testamentary trusts can be established, providing trustees with discretion over fund allocation and investments. Special trusts for minors, are treated leniently from an income tax perspective.

Limitations and Considerations

Certain limitations exist, such as the Maintenance of Surviving Spouses Act 27 of 1990. This allows a surviving spouse to claim maintenance, if not provided for in the Will, in certain instances. Exclusion clauses from marital regimes, considerations for member's interest in a Close Corporation, and bequeathing loan accounts or debts, are also essential aspects to be addressed in estate planning.

Conclusion

Estate planners should exercise careful consideration, seeking professional advice to avoid unintended consequences and ensure the effective execution of their Last Will and Testament. By understanding the legal intricacies outlined in this article, individuals can navigate the complexities of estate planning and safeguard the interests of their heirs and legatees.