Newsletter 15 (Aug 2017)
“Positive thinking is a mental and emotional attitude that focuses on the bright side of life and expects positive results. A positive person anticipates happiness, health and success, and believes he or she can overcome any obstacle and difficulty.”
Let us hang onto this attitude in the face of the unsuccessful No Confidence vote that leaves our country in a grip of ineptocracy and a further bitter taste in the mouth.
We kick off this newsletter by distinguishing between a Last Will and Testament and a Living Will.
A Last Will and Testament deals with the manner in which a deceased’s worldly possessions are dealt with after death. This is where the duties of the Executor start and end.
A Living Will is exactly what the name states, living, and has no power after death. It is a document that gives people the opportunity to state their wishes for end-of-life medical care, in case they become unable to communicate their decisions. Broadly speaking, the purpose of a Living Will is to guide the family and doctors when a person is in a medical state from which there is no hope of recovery, and due to the condition, is no longer able to make his/her own medical decisions. Issues such as being hooked up to machines, resuscitation, organ donation, etc. are addressed in a Living Will. A Living Will contains a person’s wishes which he/she hopes their loved ones will honour.
It should be understood very clearly that this document should be discussed with the next-of-kin while a person is still alive, and does not carry any weight after death. There are also ethical issues that should be conformed to and the next-of-kin should ensure that the person did not have a mind change regarding the decisions in the Living Will. The Executor has no involvement in the execution of the instructions in a Living Will. We do, however, draft Living Wills as an additional service to our clients.
The Living Will must be kept where the next-of-kin will have access to it before or when a person is on his/her deathbed. However, if an additional original of this document is returned to us with the original Will, we will keep it in safe custody, should a query arise in respect of the Living Will. A Living Will held in safe custody at our offices is like closing the stable after the horse has bolted, as the next-of-kin might already have taken certain steps without knowing the wishes of the person concerned.
Although it actually addresses actions for end-of-life medical care, it may also contain a person’s wishes as to burial or cremation as these wishes also does not fall under the duties of the Executor.
WHO CAN INHERIT IN AN ESTATE?
Read more in the upcoming edition!
DELAYS IN FINALIZING AN ESTATE
Dealing with and finalizing an estate is a delicate and emotional process that most people would like to wrap up as painlessly and as quickly as possible. However, that is not always the case. Sadly, it can turn into a time-consuming endeavour, taking months or even years to conclude.
Many institutions and people are involved in the winding up of a deceased estate – the Executor, the Master of the High Court, SARS, the heirs, banks and insurance companies, to name a few – and delays can arise during any part of this process.
It is therefore wise to make use of a reputable company, like EFBOE, a well-respected authority in drafting of Wills and rendering fiduciary services throughout South Africa.
In many cases, the primary reason for the delay is of a financial nature. One of the most common causes of a delay is a shortage of funds, when the assets in the estate are insufficient to cover the liabilities and administration expenses or when there is a cash shortfall. A lack of paper work, i.e. divorce documentation, can also cause a delay.
Another possible reason pertaining to finances are the deceased’s taxes, e.g. income tax and VAT. If the deceased’s taxes were not up to date or if the assets were not recorded properly, the Executor of the estate needs more time to re-examine everything. The Executor has no choice but to obtain the relevant documentation, complete the returns and submit them to SARS. At SARS, further delays may occur while processing the final assessments and a Tax Compliance Certificate must be issued before an estate can be finalised.
If the deceased was involved in litigation before his or her death, the Executor has to evaluate the amount of risk this poses to the estate, and might also need to complete the litigation process. More time and money may be lost in cases where a court date has to be secured, witnesses have to be called and documentation has to be completed.
Disputes between heirs take up precious time and may cause unnecessary stress to loved ones of the deceased. Resolving disputes often involve communication with the Master of the High Court which can be time consuming and which delays the administration process even further.
Backlogs at institutions like SARS, banks and courts can be responsible for lost time, as can a poorly drafted Will and inadequate preparation.
Where a person died due to unnatural causes, an inquest needs to be held, which can take years to be finalised. Witnesses have to be called, and the South African Police Service has to submit a report to the court. The court then gives a verdict regarding the cause of death, which is required for the collection of accident and death benefits from insurance companies, etc.
It is possible for you to avoid delays like these regarding your own estate by making sure your affairs are in order ahead of time.
You want to make sure that
All the relevant documentation is available to the appointed Executor.
Your taxes are up to date.
Your Will is set up properly and clearly.
You have insurance policies payable to the estate to avoid financial delays arising from lack of funds.
Your next-of-kin is financially covered whilst waiting for finalisation of your estate.
Again, consulting a trustworthy and professional service provider is non-negotiable to ensure a smooth winding up of an estate. Make use of the services of EFBOE.
LEAVING WITH A "TIP OF THE HAT”!
Bob Fosse was a choreographer, dancer and director best known for Tony Award-winning musicals like Chicago and Cabaret. When he died of a heart attack at the age of 60 on 23 September 1987, he exited with a tip of the hat to friends. To 66 of his artist, writer, entertainer and other friends who had “at one time or another during my life been very kind to me,” he left $25 000, $378,79 each, “to go out and have dinner on me.”
Even though kindness is free of charge, it can still pay off!
Kindness is the language which the deaf can hear and the blind can see. Mark Twain
Until next time!
The “Let’s Talk EFBOE” Team