Estate planning & Aretha Franklin | Have a little R.E.S.P.E.C.T for my wishes

Cape Town - Aretha Franklin’s sons are in court this week to determine how her multimillion-dollar estate should be divided. The Queen of Soul passed away in 2018 without a formal will, leaving a Michigan court to decide which of the two handwritten letters found in her home constitute her last will and testament. David Thomson, Senior Legal Adviser at Sanlam Trust says this is a reminder that drafting and signing a will ensures your final wishes are respected, and saves your loved ones from a long, and potentially expensive legal process.

According to research by Sanlam, 45% of people who don’t have a will, believe they don’t own enough assets to warrant estate planning – a total misconception. “While most of us will not leave behind a multimillion-dollar estate, everyone has some form of an asset and having a will in place goes a long way toward helping those who depend on you to live confidently,” explains Thomson. “This doesn’t only include big things like a car or a house, it should also include your bank account (however small it may be) jewellery, investments and sentimental items – even digital assets such as photos in the cloud and cryptocurrency. For parents, your will should also provide for guardianship of your children and a plan to care for your pets. Estate planning gives you peace of mind knowing that your intended beneficiaries will inherit and avoid unnecessary turmoil during an already difficult time for your loved ones.”

Some of the human factors preventing people from drafting a will include procrastination, anxiety over ‘who inherits what’ and a tendency to avoid talking about or planning for when we are not around. “If estate planning is not common practice with close friends and family, it may not be considered something to worry about and we’re less likely to prioritise it. There is also a belief that creating a will is very expensive, but this is not the case,” adds Thomson.

What To Consider When Drafting Your Will:

There are several factors to consider when drawing up a will, including one’s marriage regime. Being married in Community of Property (COP) has major implications on how your estate is distributed. Thomson explains, “When couples get married in COP, they create what is called a joint estate. This means that the instructions they set out within the will deal with half of the joint estate. It also means that half of the joint estate will belong to the surviving spouse. These are important things to consider when weighing up how to divide your estate.”

Other things to keep in mind:

• Make sure your instructions can be executed. For example, it is impractical to leave your car to more than one person.
• Drafting a single (or joint) helps you retain control of your legacy and ensure your instructions are carried out as you intend.
• Persons living together in a permanent relationship should also get their wills done. Failure to do can result in the other partner being left with absolutely nothing.
• As an entrepreneur, having a will in place is a vital part of business succession planning and can help avert potential disasters, such as leaving the running of a business to minors and/or unqualified persons.
• For parents of children with serious disabilities, estate planning is critical as they may never be able to work and provide for themselves.
• Sanlam Trust found that over 46% of deceased estates it administers have insufficient cash to cover all debts, taxes and estate duties. This includes the cost to transfer a property to an heir. Insufficient liquidity can erode the inheritance of those left behind as a cash shortfall often means that assets of the estate must be sold to increase liquidity. Sanlam Trust offers an Estate Expenses benefit which will contribute to covering the estate expenses and taxes. Alternatively, a dedicated life insurance policy can significantly contribute to ensuring sufficient cash flow.

Make sure your final wishes are respected

A will means you have the final say, even after you’re gone. Setting up your will is a simple and inexpensive process, but it can be overwhelming to know where to start. “If your needs are quite straightforward, you can create a will using Sanlam’s free online tool. This will is perfect for single persons or married couples who are leaving their respective estates to each other and people who would like to leave everything to their young children,” explains Thomson.

If you have a more complex estate and intricate circumstances, it is best to consult a financial adviser who can assist with an estate plan and a will.

There are many benefits of having an up to date will in place:

• The Wills Act dictates that everyone from the age of 16 can sign a will and there is no minimum asset base, so estate planning can begin early and evolve over your lifetime.
• You can decide how your assets will be distributed, which means that you can provide for loved ones in the best way you see fit. It also means you can disinherit people who may otherwise stand to inherit.
• If you have minor children (under 18 years), you can decide who will take care of them.
• Having a will can ensure that your loved ones avoid lengthy and expensive legal processes, especially when dealing with a less complex estate. There will be no uncertainty about your last wishes.

Thomson concludes, “Dealing with the fallout from not having a will in place is something that no one wants to do when a loved one passes. It is also important to update your will regularly or as your circumstances change to ensure it accurately reflects your wishes.”