Your will – traps to avoid

your-will-traps-to-avoidWhen drafting one’s will it is important to use unambiguous words. Something that now seems very simple and uncomplicated, may later cause big problems. To illustrate: Imagine a farmer owns, amongst other things, a farm and a house in the nearest town. He bequeaths the farm to his son and the house to his daughter. Because the farm is worth quite a bit more than the house and he wishes to leave bequests of equal value to his children, he also leaves her an amount of money. In the will the house is simply referred to as ‘my residence’.

Some time after the drafting of his will, he purchases a house in a coastal town. The family uses this house during holidays. The farmer does not amend his will in order to specifically bequeath this house to anyone. By right this house now falls under the remainder of his estate. The farmer retires and goes to live in the house by the sea. Then the farmer dies. The question now is: which of the two houses is his residence? Which house should be inherited by the daughter? There is now much potential for conflict, because if the daughter is of the opinion that the house by the sea is her father’s residence (as this was where he had lived during the last years of his life), and the son is of the opinion that the house in town is the residence (as this was the only house owned by their father when the will was drafted), this could lead to a dispute. Such a dispute may eventually end up in court, with all the associated costs, as well as the discord caused in the family.

One way of preventing this problem will be to define the location of the house in your testament. For example, “I bequeath my house at 2 Lily Street, Cradock, to my daughter”. This will remove any shadow of a doubt. Also remember to update your will when you sell one house and buy another. You, for instance, bequeath your house to your daughter and specify the address. Then you sell this house and buy another, but you do not amend your will. In your will you, therefore, bequeath a house that you no longer own to your daughter.

A question may immediately be raised as to your intent. Did you intend for your daughter to inherit the house you had bought in the place of the first one, or not? Once again the potential for conflict and the accompanying costs is there. Therefore, amend your will when you buy and sell assets.

Vehicles and furniture could also easily be the source of ambiguity and conflict. Also shares. For example, the farmer had owned a number of Sanlam shares at the time when the will was drafted. His will now reads as follows: “I bequeath all my shares to my son, John.” However, when the farmer dies, he is in possession of an extended investment portfolio. What was his intent? Should John inherit only the Sanlam shares, or all of his shares? Again a potential source of conflict.

Even cash may create interpretation problems. Say the farmer drafts his will as follows: “I bequeath all my cash to my wife”. What exactly does this mean? The cash in his wallet, the cash in the safe, the balance of his cheque, savings and/or money market accounts, or what? By simply stating: “I bequeath R100 000 to my wife” and providing for this amount, all these uncertainties will disappear.

In order to ensure that your bequests truly reflect your wishes, it is important that you manage your estate planning and the drafting of your will with great care.

Article written by Adv. Kobus Engelbrecht, Marketing Head: Sanlam Business Market

Contact Ginsburg Financial Services to help you setup your will.

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