Where There's a Will There's a Way

In South Africa, the Administration of Estates Act governs deceased estates. In most cases, the Master of the High Court will issue letters of executorship that appoint a nominated executor to wind up the estate in accordance with the deceased’s will.

Any person aged 16 years and older is free to make a will to determine how their estate should devolve upon their death. A valid will ensures that an executor you trust to act with integrity and professionalism winds up your estate and that your chosen heirs inherit your assets.

If you die without a will, or with an invalid will, the provisions of the Intestate Succession Act will determine who inherits your assets. Broadly speaking, the beneficiaries of the full estate in order of preference are: spouses, then, in equal shares, dependants, failing which parents, failing which siblings. There is no provision for other interested parties or charities.

A will is an essential document for every adult investor. Make sure that your will is valid and professionally drawn up in accordance with all the legal formalities. It is tempting to print and sign a generic internet version. However, the cost of dying intestate could be devastating on your intended heirs if different from legal succession rules. Intestate succession is also an inordinately long (and therefore expensive) process.

Inform your heirs of the whereabouts of your will and discuss its contents with them. Seek professional advice on the tax implications of your will. Understand the tax burdens associated with death (capital gains taxes on death and estate duties on the devolution of assets) and what assets the executor will need to liquidate to settle these taxes.

The Trust Deed of Foord Unit Trusts and the prospectuses of the Foord global funds allow joint-name registration of a single account by two persons. Given the tax and estate implications, Foord now only accepts joint-name registration by spouses. Joint registration offers ease of administration on death but does not supplant the need for a will. Importantly, ensure that joint-name registration does not conflict with the provisions of your will.

In South Africa, Foord Unit Trusts automatically splits joint-named accounts into two on the death or insolvency of one spouse: one wholly owned by the surviving spouse and the other under the executor’s authority. Abroad, the surviving investor becomes the sole-named account holder of the full account. Risks associated with joint registration by South African investors in the Foord global funds relate principally to the automatic exchange of tax information between countries, including South Africa, which require reporting for each joint investor as if they were the sole investor.