Several recent studies, including one done by the Master’s Office (which administers estates of deceased and insolvent individuals), shows that about 70% of working South Africans do not have a will in place.
The good news is that these studies also predict a positive change in this number as estate planning has become a matter of urgency for many more South Africans in 2022. COVID-19 is one reason, but South Africans are slowly waking up to the pitfalls of poor estate planning.
The heart of the matter
Along with forcing us to relook at our finances, our long term COVID experience has reshaped our personal relationships in unprecedented ways.
Forcing us to live further apart from each other, the pandemic has also brought us closer together. In many instances, life in lockdown has necessitated closer, constant contact with our loved ones, sparking a renewed sense of family values. Moreover, the pandemic also heightened our sense of mortality in quite an extreme way. It reminded us that anything could happen at any given moment that could cause us to be unable to take care of ourselves, or our loved ones.
We’re no longer just thinking about ourselves, but of the well-being of our spouses, children, siblings, close cousins, aunts, uncles, parents, and even close friends. When looking through this lens, treating estate planning with more urgency makes a lot of sense. We see that the thought of our loved ones is what often sits at the heart of estate planning: ensuring our investments and assets are protected even if we are incapacitated, and some day transferred to the right people in the right way after our death.
Above and beyond our loved ones, research shows that COVID-19 has also led to a greater desire for some of us to rally behind a cause greater than ourselves. The joined state of suffering and stress has led to a deeper sense of empathy for our fellow human beings. An estate plan can therefore help you allocate a portion of your wealth to a charity close to your heart or a worthy community project striving to make the world just a little better.
At the end of the day, establishing a well thought out estate plan is about more than just protecting your ‘stuff’, it’s about leveraging your wealth and possessions for the greater good of yourself, your loved ones, and anything else you may care about.
Where there’s a will…
Think of estate planning as the legal and financial process of protecting the things that matter to you and ‘passing the baton’ to the next generation. It involves creating binding legal documents to ensure that your wishes are carried out.
A will is just one part of the estate planning puzzle, which consists of a range of legal documents. An estate can include trusts, advance directives, various powers of attorney and other estate planning matters that can’t be covered in a will.
What’s surprising is that many people, both the young and old, still don’t really understand how a will works or why it’s so important. Yes, having one is a good thing, but it must be accurately drafted and updated regularly to remain valid. A simple mistake such as having a beneficiary signing as a witness could render it completely useless.
Statistics show that each year, billions of rands go unclaimed because family members are unaware of certain policies and investments of a deceased relative or because the will was invalid. Remember that if you don’t have a plan, your state has one for you – even though you might not like it.
Do it right in 2022
There’s no one-size-fits-all approach when it comes to estate planning. It depends on the individual, which is why it’s crucial to seek out the help of a professional to help you develop the best plan for you.
Many don’t also realise that estate planning is not just about the paperwork but the process which involves far more than just pushing around a few numbers on a spreadsheet. All it takes is one poorly worded sentence or an outdated section to completely change what your plan intended to do.
Every adult needs a professionally drafted estate plan and to keep it updated because things change all the time, even during the best of times. Even if you skip the resolutions this year, mark this as the one thing you set up for yourself and those you love in 2022.
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