Pictures: Lisa Hutsebaut, conveyancer for the TSC; Andrew Walker, founder and CEO of the SA Property Investors Network
National Wills Week took place this week and emphasised the importance of having a valid will – especially when it comes to the future of your home.
According to the Transaction Support Centre (TSC), which assists lower-income clients with property-related issues, too many South Africans have not drafted formal, legal wills, unaware that this could leave their dependents and families in dire straits should they die.
The TSC and its affiliates, research consultancy 71point4, the Centre for Affordable Housing Finance in Africa (CAHF), and conveyancing firm STBB, report that while millions of South Africans prepare for death by buying funeral policies, only around 30% have wills. When a property owner dies without a will, they can unwittingly leave behind significant cost and anxiety for their families. Worse – it could mean their children or relatives could lose their home.
Many low-income South Africans are beneficiaries of the government subsidised housing programme. While these houses are given away for free, they are valuable. In urban areas they typically trade for over R200 000. Owners will therefore want to be sure that their asset is passed on to their heirs without conflict, and that their heirs get the full benefit of the property’s value.
“Deceased estates can take months to wind up and incur legal costs many families may not be prepared for. When no will is in place, the time and costs involved could increase significantly, and more worryingly it could mean that the intended heir to the deceased’s estate may not be the one who ultimately inherits it,” says Lisa Hutsebaut, conveyancer for the TSC.
What happens when no will is in place?
Hutsebaut explains that where there is no will in place, the laws of intestate succession apply. These laws stipulate how a deceased estate is to be distributed between surviving heirs.
Without a will, the department of justice master’s office, which supervises the administration of deceased estates, will appoint an executor to settle any of the deceased’s liabilities and distribute the balance of the estate in terms of the Intestate Succession Act.
In terms of this, the spouse or registered domestic partner inherits the largest share of the estate – usually the property – with some allocation to the children, siblings, parents and other blood relatives. Children may inherit the property after the death of the surviving spouse, but this does not always happen.
When lack of a will hampers a home transfer
In one case which the TSC assisted with, the client approached the TSC for assistance in transferring her mother’s property into her name. TSC discovered that she was one of three siblings, which meant her siblings would have to renounce or donate their share of the property.
One was willing to do so, but the older sibling, a brother, was deceased. In terms of the laws of intestate succession, the deceased brother’s share passes to his child. However, because the child was a minor, he could not renounce or donate his share. She agreed to transfer the property into hers and her nephew’s name. But this has implications for the client’s ability to sell or borrow against the property until the child turns 18.
When to get a will
“Anyone over the age of 16 who is of sound mind can have a will drafted. As soon as a person has assets – such as property – and/or a child, it becomes important to draft a will,” says Hutsebaut.
“Having a will ensures that the intended heir retains their property, and avoids conflict and additional costs for the family,” says Hutsebaut. “Now is the time for people to have the difficult conversation – sit down with their families and say when I die, this is what I want to happen to the house, and then to formalise their wishes with a will, to ensure their families have some protection.”
How to get a will
Wills are typically drafted by estate attorneys, financial advisors, or with the assistance of your bank.
During National Wills Week, which is hosted by the Law Society of South Africa, participating legal practitioners will offer their services to draft wills for free.
In the meantime the Property Investors Network (SAPIN) and SmartWill has also offered free customised wills to young adults in South Africa. Any young person over the age of 18 who earns a living,or owns possessions can now create a personalised free SmartWill when signing up for a SAPIN membership.
Young adults who sign up for a free SAPIN membership will benefit from a will that provides a holistic protection plan with access to affordable and easy-to-understand professional fiduciary services when signing up for a free SAPIN membership. While users complete a will in their own time and space, they also have access to expert legal advice at the click of a button.
“South Africa’s young adults are the workforce, the parents, the providers and the leaders of the future. Without financial education and the right financial tools, the wealth that these young adults build will not be passed onto the next generation and we want to ensure that the young people in our property network are prepared and equipped for their financial futures with customised and valid Wills,” said Andrew Walker, founder and CEO of the SA Property Investors Network.
About the SA Property Investors Network
SAPIN is South Africa’s largest property network with an array of membership packages for any level of property investor. The new free membership is for any young adult looking for career opportunities or is interested in learning about the property sector as a means of job and wealth creation.
“SAPIN and SmartWill have a common goal, to assist young adults in planning for their financial futures, and having a will is the cornerstone to laying a solid financial foundation. We are encouraging youth to learn about property investment as a means to financial freedom. You don’t need to be a millionaire to do that, but what the youth need is mentorship and a network of support. When signing up for a free SAPIN youth membership that support is available and so is a free, tailor-made will,” he said.
“Everything that stands the test of time requires a solid foundation, and SAPIN is committed to investing in the foundations of the next generation. We trust that our SAPIN packages and the complimentary offerings will encourage and inspire young adults to invest in their financial futures,” says Walker.
Written by Danie Keet, originally published in Property Professional