Legal restrictions in wills.
What You Can and Cannot Put in a Will and Testament: A Comprehensive Guide Legal Restrictions in Wills.
What are legal restrictions in wills? Drafting a will is a pivotal aspect of estate planning that ensures your assets are distributed according to your wishes after your death. In South Africa, wills and testaments are governed by specific laws that dictate not only how to create a valid will but also what you can and cannot include in it. Understanding these legal restrictions is essential for creating a will that is both valid and enforceable. This comprehensive guide delves into the intricacies of South African law regarding wills, highlighting permissible inclusions, prohibited provisions, and the legal framework that governs these documents.
Understanding the Legal Framework
Before delving into the specifics of legal restrictions in wills, it’s essential to understand the legal framework governing wills in South Africa. The primary statutes include:
The Wills Act 7 of 1953: Download the Act. This act outlines the formal requirements for creating a valid will, including who can make a will, how it should be signed, and witnessed.
The Administration of Estates Act 66 of 1965: Download the Act. This act deals with the administration and distribution of deceased estates, including the appointment of executors.
The Maintenance of Surviving Spouses Act 27 of 1990: Download the Act. This act provides for the reasonable maintenance needs of the surviving spouse.
The Children’s Act 38 of 2005: Download the Act. This act addresses the care and guardianship of minor children.
The Trust Property Control Act 57 of 1988: Download the Act. This act regulates the establishment and administration of trusts.
The Intestate Succession Act 81 of 1987: Download the Act. This act governs the distribution of estates when a person dies without a valid will.
Understanding these laws is crucial for drafting a will that is both valid and reflective of your final wishes.
What You Can Put in a Will
South African law provides considerable flexibility when it comes to drafting a will. Here are the key elements you can include:
Distribution of Assets
The primary purpose of a will is to detail how your assets should be distributed upon your death. Under Section 2 of the Wills Act 7 of 1953, you are entitled to bequeath:
Movable Property: This includes personal belongings such as vehicles, jewelry, furniture, art collections, and other personal items. You can specify particular items to go to specific individuals, which is especially important for sentimental items or family heirlooms.
Immovable Property: Real estate holdings such as houses, apartments, land, and farms. You can allocate these properties to one or multiple beneficiaries. If you own multiple properties, you can designate each to different beneficiaries or specify shared ownership.
Financial Assets: Bank accounts, investments, shares, bonds, unit trusts, and other financial instruments. You can distribute these assets in specific amounts or percentages among your beneficiaries.
Intangible Assets: Intellectual property rights, patents, trademarks, copyrights, and royalties. If you own any intellectual property, you can assign these rights to a beneficiary who can benefit from any future earnings.
Business Interests: Shares in a company, partnerships, or sole proprietorships. You can specify how your interest in a business should be handled, whether it be transferred to a specific person or sold with proceeds distributed as per your instructions.
Important Note: Jointly owned property with rights of survivorship (e.g., property co-owned with a spouse) typically falls outside the scope of your will. Such assets automatically transfer to the surviving owner, as governed by the Administration of Estates Act 66 of 1965. It is advisable to review any joint ownership agreements to understand how these assets will be treated upon your death.
Appointment of an Executor
An executor is responsible for administering your estate, ensuring that your assets are distributed according to your will. Under Section 14 of the Administration of Estates Act, you can appoint:
An Individual: A trusted friend or family member who is capable and willing to handle the responsibilities. It’s crucial to ensure that the person you choose is trustworthy and has some understanding of financial matters.
A Professional: An attorney, accountant, or professional executor experienced in estate administration. While professionals charge a fee for their services, they bring expertise that can streamline the administration process.
An Institution: A bank or trust company that offers executor services. Institutions provide professional management but may lack the personal touch an individual executor can provide.
Requirements:
Legal Competence: The executor must be over 18 years old and of sound mind.
No Conflicts of Interest: While beneficiaries can be executors, it’s important to consider potential conflicts, especially if the estate is complex or there are potential disputes among heirs.
Supervision: Executors are supervised by the Master of the High Court, who oversees the administration process to ensure compliance with legal requirements.
Recommendation: Discuss your choice with the prospective executor beforehand to ensure they are willing and understand their duties.
Guardianship of Minor Children
If you have minor children (under 18 years old), you can appoint a legal guardian in your will as per the Children’s Act 38 of 2005. This ensures:
Custody and Care: The guardian will be responsible for the child’s day-to-day needs, including housing, education, and general welfare.
Financial Management: Overseeing any assets or inheritance left to the child until they reach adulthood or a specified age.
Educational and Medical Decisions: Making important decisions in the best interest of the child, such as schooling choices and medical treatments.
Important Considerations:
Consent of the Guardian: It’s crucial to obtain the consent of the person you wish to appoint as guardian to ensure they are willing and able to take on this responsibility.
Backup Guardians: Consider naming an alternate guardian in case your first choice is unable or unwilling to serve at the time.
Establishment of Trusts
Creating a testamentary trust in your will allows for the management of assets on behalf of beneficiaries who may not be capable of managing them themselves. Under the Trust Property Control Act 57 of 1988, you can:
Specify the Terms: Outline how and when assets should be distributed, including any conditions or milestones (e.g., reaching a certain age, completing education).
Appoint Trustees: Individuals or institutions responsible for managing the trust assets in accordance with your instructions.
Protect Beneficiaries: Ideal for minor children, dependents with disabilities, or beneficiaries who may not be financially responsible.
Advantages:
Asset Protection: Trust assets are protected from creditors and cannot be misused by beneficiaries.
Tax Planning: Trusts can offer tax benefits and efficient estate planning mechanisms.
Specific Bequests and Legacies
You may include specific bequests, leaving particular items or sums of money to individuals or organizations. Under the Wills Act 7 of 1953, you can:
Designate Heirlooms: Allocate family jewelry, artwork, antiques, or other sentimental items to specific individuals.
Allocate Funds: Bequeath specific amounts of money to friends, relatives, employees, or charities.
Set Conditions: Impose reasonable conditions on bequests, provided they do not violate public policy or legal statutes.
Example: You might leave a sum of money to a grandchild, payable upon their graduation from university.
Digital Assets
In today’s digital age, it’s essential to consider your digital footprint. You can include instructions for:
Online Accounts: Social media profiles, email accounts, cloud storage, and other online services. You can specify whether you want these accounts closed, memorialized, or transferred.
Cryptocurrencies: Bitcoin, Ethereum, and other digital currencies. Provide detailed instructions on how these assets can be accessed, including wallet IDs and private keys.
Digital Media: E-books, music libraries, digital photos, and other digital content. Specify how you want these assets managed or distributed.
Recommendation: Due to security concerns, avoid including sensitive information like passwords directly in your will. Instead, indicate where this information is securely stored (e.g., with your attorney or in a secure digital vault).
Legal Restrictions in Wills: What You Cannot Put
While you have considerable freedom in drafting your will, South African law imposes certain legal restrictions in wills, to protect public policy and prevent unlawful actions.
Conditional Gifts That Violate Public Policy
You cannot include conditions that:
Encourage Illegal Activities: Such as requiring a beneficiary to commit a crime or engage in unlawful conduct.
Discriminate Unlawfully: Conditions based on race, gender, religion, sexual orientation, or other protected characteristics are prohibited under the Constitution of South Africa.
Restrict Marital Freedoms: For instance, forcing a beneficiary to divorce their spouse or marry someone of a particular background.
Legal Precedent: Courts may declare such conditions void. For example, in the case of Harvey v. Crawford (1905 TS 452), the court held that conditions contrary to public policy are unenforceable.
Example of Prohibited Condition: “I bequeath R500,000 to my son on the condition that he marries within the Jewish faith.”
Disinheriting a Spouse
Under:
The Maintenance of Surviving Spouses Act 27 of 1990: Read the Act. A surviving spouse is entitled to reasonable maintenance from the deceased’s estate until death or remarriage, if they cannot provide for themselves.
The Matrimonial Property Act 88 of 1984: Read the Act. In marriages in community of property, the surviving spouse is automatically entitled to half of the joint estate.
Implication: You cannot completely disinherit your spouse; any attempt to do so will be overridden by these statutes. If you were married out of community of property with accrual, the surviving spouse may have a claim against the estate based on the accrual system.
Unlawful Distribution of Assets
Certain assets are excluded from your will:
Life Insurance Policies: If a beneficiary is designated, the proceeds go directly to them, bypassing the estate. Attempting to bequeath these proceeds in your will is ineffective.
Retirement Funds: Governed by the Pension Funds Act 24 of 1956. Trustees have discretion over the distribution to dependents and nominees, regardless of the will’s provisions.
Jointly Owned Property: Assets held in joint tenancy with rights of survivorship automatically pass to the co-owner.
Recommendation: Review beneficiary designations on policies and accounts to ensure they align with your estate planning goals.
Illegal Acts or Assignments
You cannot instruct your executor or beneficiaries to:
Evade Taxes: Tax evasion is illegal under the Tax Administration Act 28 of 2011. All taxes due upon death must be settled before assets are distributed.
Commit Fraud: Any form of deception to unlawfully gain assets or benefits is prohibited.
Perform Criminal Acts: Instructing illegal activities invalidates that portion of the will and could expose parties to criminal charges.
Example: Instructing an executor to hide certain assets from the South African Revenue Service (SARS) is illegal.
Funeral and Burial Instructions
While you can express your wishes regarding funeral arrangements, these instructions are:
Not Legally Binding: Under the Regulations Relating to the Management of Human Remains, the family has the final say in funeral arrangements.
Often Unread in Time: Wills are typically read after the funeral has taken place.
Advice: Communicate your wishes to family members or include them in a separate, accessible document. Consider a funeral directive or letter of instruction that outlines your preferences.
Additional Legal Considerations for Wills outside of legal restrictions in wills.
Testamentary Capacity
To create a valid will, you must:
Be at Least 16 Years Old: As per Section 4 of the Wills Act 7 of 1953.
Be Mentally Competent: Understand the nature and effect of your actions, comprehend the extent of your assets, and appreciate the claims of potential beneficiaries.
Legal Reference: The case of Banks v. Goodfellow (1870), though an English case, is often cited in South African law regarding mental capacity requirements.
Challenging Testamentary Capacity: If there is doubt about your mental capacity at the time of drafting the will, it can be contested in court. It’s advisable to obtain a medical certificate if there’s any concern about your mental state.
Witness Requirements
Formalities include:
Two Competent Witnesses: Over 14 years old and not beneficiaries or the spouses of beneficiaries.
Signing the Will: You must sign each page and at the end of the will in the presence of the witnesses.
Witness Signatures: Witnesses must sign the will in your presence and in the presence of each other.
Failure to Comply: May render the will invalid under Section 2(1)(a) of the Wills Act. The court may, however, condone non-compliance under certain circumstances as per Section 2(3) of the Wills Act, but this is not guaranteed.
Special Considerations:
Blind or Illiterate Testators: Additional requirements apply, such as a certificate by a commissioner of oaths.
Persons Unable to Sign: If you are physically unable to sign, you may direct someone else to sign on your behalf in your presence and the presence of witnesses.
Revocation and Alteration of Wills
You can change your will by:
Creating a New Will: Clearly stating that all previous wills are revoked. Ensure the new will complies with all formal requirements.
Adding a Codicil: An amendment to your existing will that must also meet all formal requirements, including being signed and witnessed.
Physical Destruction: Intentionally destroying the will with the intent to revoke it (e.g., tearing, burning). Mere accidental destruction does not revoke a will.
Important: Always ensure changes comply with the Wills Act to be valid. Inform relevant parties (e.g., your executor or attorney) about the most recent version of your will.
Common Mistakes to Avoid
Using Ambiguous Language: Be clear and specific to prevent misinterpretation and disputes among beneficiaries.
Not Updating the Will: Life changes like marriage, divorce, the birth of a child, or acquiring significant assets necessitate updates to your will.
Improper Execution: Failing to meet formal requirements can invalidate the will.
Overlooking Tax Implications: Consider the tax consequences of your bequests, including estate duty and capital gains tax.
Ignoring Foreign Assets: If you own assets in other countries, you may need separate wills compliant with those jurisdictions.
Tip: Consult a legal professional to ensure your will is correctly drafted and executed. An attorney can provide guidance on complex issues and help prevent potential challenges.
FAQs on Legal Restrictions in Wills
Can I Disinherit My Children?
Adult Children: Yes, you can disinherit them; South African law does not mandate inheritance for adult children.
Minor or Dependent Children: They may have a claim for maintenance against your estate under the Maintenance Act 99 of 1998 and the Children’s Act 38 of 2005, especially if they were financially dependent on you.
Recommendation: If you choose to disinherit a child, it’s advisable to document your reasons to prevent potential legal challenges based on claims of oversight or undue influence.
Can I Leave My Entire Estate to a Charity?
Yes: Provided you have no legal obligations to dependents (e.g., a spouse or minor children).
Ensure Clarity: Clearly name the charity, including registration numbers and contact information, to prevent confusion or disputes.
Considerations:
Dependent’s Claims: Be aware that dependents may still have a claim against your estate for maintenance.
Public Benefit Organizations: Donations to registered public benefit organizations may have tax implications for your estate.
Can I Include Digital Assets in My Will?
Yes: Include access information and instructions for digital assets.
Security Considerations: Avoid listing passwords directly in your will, as it becomes a public document upon death. Instead, reference a secure location where this information is stored.
Additional Steps:
Digital Estate Plan: Create a separate document detailing your digital assets and how they should be handled.
Appoint a Digital Executor: Consider appointing someone knowledgeable about digital matters to handle these assets.
What Happens If I Die Without a Will?
Intestate Succession Act 81 of 1987: Your estate is distributed according to a set formula.
Beneficiary Hierarchy:
Spouse: If you have a spouse but no descendants, the spouse inherits the entire estate.
Spouse and Descendants: The spouse inherits a child’s share or a specified amount (adjusted periodically), whichever is greater; the remainder goes to descendants.
Descendants Only: If no spouse, the estate is divided equally among descendants.
No Spouse or Descendants: The estate passes to parents, then siblings, and further extended relatives.
No Relatives: If no relatives can be found, the estate escheats to the state.
Implications: Dying intestate can result in unintended beneficiaries and may not reflect your wishes.
Can a Will Be Challenged?
Grounds for Challenge:
Lack of Testamentary Capacity: Claiming the testator was not of sound mind.
Undue Influence or Coercion: Alleging the testator was pressured into making the will.
Fraud or Forgery: Asserting the will is not genuine.
Non-compliance with Formal Requirements: Pointing out failures in execution.
Legal Process: Must be challenged in court, referencing relevant case law and statutes.
Example: In Meyer v. Thompson (2010), the court invalidated a will due to proven undue influence.
Can I Change My Will After It’s Been Signed?
Yes: Through a codicil or by drafting a new will.
Formalities Apply: Changes must meet the same legal requirements as the original will, including being signed and witnessed.
Recommendation: Regularly review your will, especially after major life events, to ensure it reflects your current wishes.
Conclusion
As is clear there are several legal restrictions in wills. Creating a valid and enforceable will in South Africa, despite the legal restrictions in wills, involves understanding what you can and cannot include, as dictated by various statutes and legal precedents. By adhering to the legal requirements and considering the implications of each provision, you can ensure that your final wishes are honored, and your loved ones are provided for. Always consider consulting a legal professional to assist in drafting your will, ensuring that it meets all legal standards and truly reflects your intentions.
External Resources:
Master of the High Court: Official Website – Provides information on estate administration and the role of the Master.
Legal Aid South Africa: Official Website – Offers free legal assistance to those who qualify.
South African Revenue Service (SARS): Estate Duty Information – Details on tax obligations upon death.
Internal resources
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This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for errors, omissions, loss, or damage arising from reliance upon any information herein. Don’t hesitate to contact Meyer and Partners Attorneys Incorporated if you require further information or specific and detailed advice. Errors and omissions excepted (E&OE).