As we mark National Wills Week, there's no better time to address the importance of having a properly drafted will.
In the latest episode of our podcast, Maya Fisher-French sits down with Deenisha Nadesan, Executive Director of Estates at Capital Legacy, to discuss the common pitfalls people encounter when drafting their wills and how to avoid them.
This is not just a matter of legal formalities; it's about ensuring that your hard-earned assets are distributed according to your wishes, thus preventing family disputes and financial ruin.
Marriage contracts are a significant area of concern. Many people don't understand how their marriage contract affects their will.
Misunderstandings here can lead to complications and unintended consequences, such as one spouse inadvertently receiving more than intended. Another critical issue is the witnessing of wills.
According to Nadesan, a will must be signed by the testator and witnessed by two competent witnesses who are present simultaneously. These witnesses cannot be beneficiaries or their spouses, a detail that often trips people up and can render a will invalid.
Property inheritance is another complex area. Many people wish to leave their property to their children but don't consider the practicalities. For example, minors can technically own property, but they can't manage it. This can be solved by setting up a testamentary trust to manage the property until the child is of age. Additionally, if a property is left to multiple children, it can lead to disputes over maintenance costs, selling decisions, and more.
Then there's the matter of pensions. Many mistakenly believe their pension forms part of their will. However, pensions are governed by the Pension Funds Act, and the trustees of the pension fund make the final decision on who benefits. This underscores the importance of understanding what assets fall under your will and which do not.
The costs of winding up an estate can also be eye-watering. From executor fees to estate duty and even capital gains tax, the financial burden can be significant. Therefore, it’s essential to ensure there’s enough liquidity in your estate to cover these costs, either through life cover or other means.
In conclusion, while free wills or DIY templates might seem like a quick fix, they often lead to more problems than they solve. Consulting with a fiduciary expert can save your family a lot of heartache and financial strain. As Nadesan aptly put it, “What's worse than having no will is having a will that's not properly drafted.” So, take this National Wills Week as an opportunity to get your affairs in order. Your future self—and your family—will thank you.
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