Discover how prioritising your will can transform your financial planning and safeguard your loved ones' futures. File photo.
By: Capital Legacy
There is a drive underway to encourage a new way of thinking about money. It has surprisingly little to do with income and expenses, traditionally the two key considerations. Instead, this approach puts the legacy we can leave for our loved ones at the heart of every financial decision.
This approach places the last will and testament front and centre because it is the legal document that sets out who should benefit from your estate when you pass away, and how your assets must be distributed. Your will is one of the most important documents you’ll ever sign because it relates to so many of the things we value in life – family and friends, children, pets, property, savings, investments, items of sentimental value, charitable causes, and more.
Wills are also becoming more central to personal financial planning because a simple, well-drafted will streamline the estate administration process. Anecdotal evidence points to significant delays at offices of the Master of the High Court across the country. Delays in the deceased estate process have a life-changing impact on beneficiaries who have to wait years for their inheritances. This is not what any of us would wish to inflict on our loved ones. So, whatever we can do to speed this process along, should certainly be done, and a clear, simple, well-drafted will is one.
While discussions about your own passing are understandably uncomfortable, the leading wills and estates specialists, Capital Legacy, is encouraging South Africans to draft their wills to avoid leaving chaos and drama in their wake. The good news is that wills are becoming less of a taboo subject. They are increasingly regarded as key pieces of individuals’ personal financial planning, irrespective of income, relationship status, or the value of their estate. Respondents in an online survey conducted by Capital Legacy in August 2024, ranked drafting a will as the most important thing on their personal finance to-do list, followed by medical aid and retirement savings. Other aspects of estate planning that have also been trending upwards include:
Online wills
There has been a rise in online will-drafting for the autonomy and convenience that it offers, being available and accessible at any time and from anywhere. More South Africans are showing an interest in online wills, even though some legal updates are still required to integrate digital wills into South African law. In practice, this means that you can complete your will online, before printing out a physical document to sign and witness. The rising popularity of online will-drafting reflects a global shift in consumer behaviour towards digital solutions that are available 24/7/365 and do not require in-person appointments.
Testamentary trusts
Testamentary trusts are powerful estate-planning tools that can be used to provide for minor children and dependents with special needs. These trusts are created in a will – hence the name ‘testamentary’ – and come into effect when the person whose will it is passes away, protecting children and dependents’ inheritances if they are not able to manage it themselves. Between 2023 and 2024, Capital Legacy saw an increase of more than 90% in the number of clients who included trusts when drafting their wills. The most popular type of testamentary trust is Children’s Trusts, followed by Provider’s Trusts (for safeguarding dependents with special needs or disabilities, or elderly parents), and Widow’s Trusts.
Protection against the costs of dying
Legal and other administrative costs associated with wrapping up a deceased estate can place an unexpectedly heavy financial burden on loved ones left behind. In 2024 there was an increase in the number of products offered by banks and other financial services providers, that pay out to cover the fees when a person passes away. However, the revolutionary Legacy Protection PlanTM from Capital Legacy has been indemnifying these costs since 2012 and remains an industry-leading innovation when it comes to protecting its clients’ legacies, and making the loss of loved ones easier. In 2024, Capital Legacy indemnified around R70 million in legal fees and costs associated with dying, during the course of winding up more than 1,200 deceased estates.
Younger generations drafting wills
Millennials and members of younger generations are increasingly aware of the importance of wills and estate planning, thanks to consumer education initiatives and financial advisory campaigns. Through Capital Legacy Direct, in 2024, 18% of the wills drafted were for millennials, more than in 2023. This shift to greater awareness of the importance of estate planning among a younger demographic shows evolving perspectives on financial planning and the desire to leave a meaningful legacy.
Judicial updates
In April 2024, President Cyril Ramaphosa signed into law the Judicial Matters Amendment Act 2023. In the Intestate Succession Act and Maintenance of Surviving Spouses Act, the definition of ‘spouse’ was expanded to include ‘a partner in a permanent life partnership where the partners have undertaken reciprocal duties of support’. What does this mean for wills and estates? People in cohabiting relationships without a formal marriage regime in place should carefully document their intentions around shared assets to safeguard against disputes after death.
Celebrity estates and legal battles
Cases of celebrities passing away without valid wills, or leaving behind contested estates, have increased public awareness around the importance of clear, legally binding estate planning.
Musician Prince died intestate in 2016. With no will to guide the distribution of his estate, there were multiple legal complexities, including disputes over assets and royalties, leading to extensive delays. It was not until 2022 that his estate could be finalised. ‘Queen of Soul’ Aretha Franklin's estate became embroiled in legal issues after her death in 2018. Three of her four children disputed the validity of two wills, both handwritten but dated four years apart, one reportedly found in a cabinet, the other under a cushion. In November 2023, a judge overseeing the estate ruled in line with the latter.
These and other high-profile cases highlight issues that arise from neglected or out-of-date estate plans and the family disputes that can ensue, demonstrating that not even famous or high-net-worth individuals are immune from leaving chaos and drama in their wake.
Capital Legacy drafted tens of thousands of wills in 2024. However, a significant proportion of South Africans still pass away without valid wills. The Fiduciary Institute of Southern Africa has emphasised the importance of educating the public on the benefits of valid wills, engaging expert help, and securing professional estate administration services when appointing an executor in your will. The industry still has a lot of work to do with an estimated 8.7 million homeowners, 5 million single moms, 5.4 million car owners, and 1.4 million pet owners all without a will.
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* Capital Legacy are wills and estates specialists.
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