Risks of not having an updated Final Will and Testament?

According to our fiduciary partner the following 10 points are important to consider when drafting a last will and testament:

  1. Only an original and signed will is valid.
  2. Your appointment of a family member or friend as an executor may be declined by the High Court, thus the co-appointment of an approved, professional is paramount.
  3. Your will only deals with life cover that pays into your estate, thus your Will and life cover beneficiary nominations must complement each other.
  4. If you do not create a testamentary trust for the receipt of your minor children’s inheritances, their money will go to the Government Guardian’s fund. An existing (Inter Vivo’s) trust can be nominated, but this structure should already be managed in strict compliance with the Trust Property Control Act.
  5. Guardian nominations are only applicable when there is no surviving biological or legally appointed parent.
  6. Guardian nominations are only a wish, these nominations should be aware of and happy to accept such an appointment.
  7. No-one can inherit until all debts, fees, taxes and marital contract claims are settled, regardless of what your will says (even if you have no will).
  8. You can use your will to document your last wishes, but these are only wishes and not always enforceable.
  9. If you state that you wish to be an organ donor in your will, then you must still register with the Organ Donor Foundation for this wish to be given effect.
  10. You cannot cater for every single eventuality, so it is usually better to keep your will simple and straightforward, revising and amending as your circumstances change.

We will gladly review your current Will Document to see if your wishes can in fact​ ​be acted upon or draw up new ones.

Contact us for a free Will and Testament appointment at work or home.

​​No charges to store or amend your Will! Taylor Made with cutting edge technology.

Save on : Executors Fees, Testamentary Trust Fees, Conveyance Attorney Fees and Non-Estate Asset Fees.

Why draw up a new Will and have it safely stored?

The cases are limitless, but lets look at a few scenarios.

You are looking to get married or divorced/seperation but your Will is still the same while you life wishess have changed. Having a Will and Testament on your PC or in your Drawer can result in easy disapearance when the court require the original.

You get children or your parents, sublings died while they are still on your Will.

Your assets or financials changed or you started a new business.

These are all triggers to get a new Will and Testament or at least update it.

Banks may charge a fee for safe storage, we don’t!

The shareholder-, buy and sell agreement and MOI in your business

The shareholder-, buy and sell agreement and MOI in your business should cover all the taxation aspects of Income Tax, Capital Gains Tax, Donations Tax and Estate Duty, upon the departure any one or more owner[s] / shareholder[s].

It is imperitive that the buy and sell agreement is structured and aligned with the Shareholders Agreement and the Memorandum Of Incorporation of the company, in order provide the most tax efficient solution possible.

A correctly structured buy and sell agreement will ensure that Income Tax, Estate Duty, Capital Gains Tax and Donations Tax implications are either:

  • Avoided entirely
  • Reduced to manageable and acceptable levels
  • Funded through tax efficient structures and mechanisms.

From an income tax perspective you need to consider Section 11(w) and all its implications. Although there are choices and decisions that can be made here, in very simple layman’s terms, if the premiums were deducted for income tax purposes by the company, then the proceeds of any life insurance policies paid to the company, will be taxable.

For the most part, Estate Duty is not a concern if life insurance is used to pay for the share transfer between owners / shareholders, assuming that the departing owner / shareholder is a natural person. There is an unusual anomaly to this, insofar as a company, which is a shareholder, is defined as a person by the Interpretation Act, Act No 33 of 1957 and so it is possible to maintain Estate Duty free payments to shareholder companies. Trusts on the hand do not enjoy the same exemption. There are nevertheless corporate structuring techniques available with a combination of trusts and companies, whereby Estate Duty benefits could still be obtained.

At any stage that the payment for the owner’s interest or shareholding exceeds the base cost of the interest / shares, there will be a capital gain and capital gains tax will ensue. Similarly, there could be a capital loss, which will not be deductible for tax purposes. It is vitally important that an acceptable valuation method is adopted and adopted in all relevant agreements and the MOI of the company, to avoid excessive CGT [capital gains tax] being raised by SARS.

Donations tax could arise if the payment for the ownership interest / shareholding is substantially less than a fair market value thereof. This is also why one needs to define the share valuation method in an acceptable manner and structure to SARS. If insufficient consideration is given to this aspect, you could find yourself in the unenviable position of incurring both Donations and Capital Gains Tax upon the transfer of ownership.