If you have a Will, you’ll have the last word on what should happen to the fruits of all your hard work when you are gone, right? Not quite… make sure you avoid these five common mistakes.
A Will that is not clearly worded may cause confusion and eventually require a court ruling. For instance, a Will that simply states, “I bequeath all my money to my daughter, Penny” can easily be challenged. What exactly is money? Is it notes and coins found in the testator’s wallet on the day he died, or does it include the fixed deposit at the bank and other financial investments? “Likewise, saying ‘I bequeath my estate to my children’ is not sufficient – you should state if you are referring to your biological children only, if you have other children too. A few words – an accurate description of exactly what you mean, such as ‘I bequeath the balance of my cheque account at the date of my death to my daughter Jane’ – can have a major effect on the implementation of your Will,” explains Hill.
Distributing you assets equally among heirs
It’s not a good plan to distribute everything equally if you have more than one heir – except if your entire estate consists of cash. For instance, transferring ownership of a house to your spouse and all your children may cause practical problems as they all have a right to live in the house. Transferring ownership of a car to four people is not practical either. One of the heirs will have to buy the car if he or she wants to keep it, and what if all of them want to buy the car?
Involving beneficiaries in the drafting of your Will
If any of your heirs signed as a witness or helped draft your Will, they could be disqualified from receiving their inheritance if the other heirs were to challenge the Will. Although a disqualified heir is entitled to approach the court to resolve this, it can be a lengthy and expensive process.
Not making provision for minors’ inheritance
Often parents nominate minor children as beneficiaries of assets such as insurance policy payouts, property and other investment proceeds. If, as a parent, you haven’t created a trust to hold the inheritance on behalf of the minor, it will be held by the Guardian’s Fund, which is administered by the Master of the High Court, a public entity, which only invests the assets in low-interest-bearing investments, which can be to the detriment of the minor beneficiaries, especially if they are very young. Setting up a trust in your Will (called a testamentary trust) will ensure that the money you leave for your children is easily accessible for their needs and will be used as intended – to pay for their upbringing. Apart from these common mistakes, the biggest mistake most people make is not reviewing their Wills when their circumstances change. New children, new assets and new relatives come into the picture. That’s why you should review your Will at least once a year.
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