• Jeffrey Wiseman, CEO of Momentum Trust

How to avoid leaving a legacy of financial burden

When it comes to passing away, many South Africans don’t have enough money in their estate to cover critical expenses such as executor’s fees, the costs of transferring any fixed property or motor vehicles to beneficiaries, taxes, existing debt, sworn appraiser’s valuation fees, fees to the Master of the High Court of South Africa and trustees. Unfortunately, this often leaves already-grieving loved ones to shoulder the financial burden – which is not the legacy that most of us want to leave behind.

This is according to Jeffrey Wiseman, CEO of Momentum Trust, one of South Africa’s leading provider of Wills, trust and fiduciary services in South Africa. He says the threat of rising COVID-19 death statistics in this country should have many South Africans seriously considering how they are going to protect their loved ones should they meet an untimely end, whether it’s due to COVID-19 or not.

There is a financial cost to winding up an estate which is very often underestimated. In many instances the wishes of the deceased person according to the will may not be actionable, due to assets needing to be sold to cover expenses.

“So it’s critically important, perhaps now more than ever, to ensure that you have a plan in place that ensures the wishes in terms of your will are actionable. To ensure your will is actionable, financial planning needs to be conducted with a financial adviser. Put differently, without a financial plan backing it up, you may have a legal will that may be difficult to give effect to.

By having a financial plan in place that backs up your will, you will have peace of mind in the knowledge that your loved ones will inherit as you intended, not being burdened with the consequences of unforeseen estate expenses needing to be settled.”

“Momentum and your financial adviser can help you to ensure that there’s enough money available to cover the professional and administration costs for winding up your estate and even protect your investments,” says Wiseman.

You also need to appoint a qualified executor to ensure that your estate ends up in the hands of your loved ones as you always intended it to. An executor of an estate is an individual appointed to administer your estate when you die and should generally be an impartial person. Wiseman says that, “we tend to see issues when clients place executorship in the hands of a loved one who doesn’t understand the nuances and challenges that come with this responsibility.”

Without the help of a professional winding up an estate, Wiseman warns that one tends to run into one or more of these challenges:

  • Wills cannot be found, are found not signed, or are incorrectly signed and witnessed;

  • Wills are poorly drafted, resulting in confusion and unintended consequences as to who inherits what;

  • They are too low in value (less than R 250 000) for a professional executor to be appointed, and the family must deal with the Master of the High Court directly (During this COVID period access to the Master’s Office is challenging);

  • There are cash shortfalls, or insufficient cash to settle fees related to winding up the estate and liabilities – these can also be called ‘liquidity issues’; and

  • There isn’t enough money in the estate to settle debts resulting in creditors leading the process and no heirs inheriting – this is often referred to as “insolvency”.

“At Momentum Trust, we believe that clients need a properly drafted will, comfort in knowing their estate will be attended to properly, and cash available in their estates to cover the cost of winding up the estate,” says Wiseman.

“Times are tough for many South Africans, so the access to cash is the biggest issue,” says Wiseman. But he explains that there are solutions available to ensure your family or loved ones will be left with the legacy of sufficient financial provision.”

To help South Africans gain complete peace of mind when dealing with the loss of a loved one, Momentum has enhanced its professional will drafting and deceased estate administration offerings, by launching its Estate Provider Benefit. This unique packaged solution provides the necessary funds to settle professional fees that arise during the administration of a deceased estate including executor fees, conveyancing fees, motor vehicle transfer costs, trust costs as well as taxes and fees relating to the Master of the High Court. As part of this unique packaged solution, you will be ensured of a free professional and legally-binding will.

“Give your loved ones the peace of mind knowing that there will be enough money available in your estate to cover administration costs, your will is safe, and that any amount not used will boost your estate instead of being lost to fine print,” says Jeffrey Wiseman.