BUSINESS NEWS - September is Wills Month, an annual reminder for South Africans to put their affairs in order and ensure their wishes are clearly documented.
While drafting or updating a will is an important part of estate planning, having a valid will does not necessarily mean that loved ones will have the money they need to carry out those wishes.
For many families, a home is their most valuable asset and one of the most significant legacies they hope to leave behind. But inheriting a property is about more than receiving the keys.
Financial responsibilities can arise almost immediately after a homeowner dies, while the estate is still being administered and before the property can be transferred to beneficiaries or sold.
The costs families may not anticipate
A will sets out who should inherit your assets, but it does not provide the cash required to administer an estate or maintain a property while the process is under way.
Estate administration can involve expenses such as executor’s fees, Master’s Office costs, advertising, courier and administrative charges, as well as SARS and accounting costs. Where rental income forms part of an estate, additional executor’s fees may also apply.
Meanwhile, the costs associated with owning a home continue.
Municipal rates and service charges remain payable, while maintenance, garden services and security or armed-response services may need to continue, particularly if the property is left unoccupied.
If beneficiaries decide to keep the home, transfer-related costs also need to be considered. If the property is sold, municipal charges and other expenses may continue while the sale and transfer process is completed.
For families already dealing with the loss of a loved one, these unexpected expenses can add significant financial pressure.
A will is only part of the plan
One of the common misconceptions around estate planning is that a will alone guarantees a smooth financial transition.
In reality, a will provides instructions about how assets should be distributed, but it does not necessarily provide the liquidity required to cover expenses during the administration of the estate.
Adequate life cover can help provide funds to meet estate-related costs and support household finances while the estate is being finalised.
This can reduce the risk of beneficiaries having to sell assets under pressure or struggle to meet ongoing expenses at a time when they are already dealing with grief.
Don’t let home insurance lapse
Home insurance is another consideration that can easily be overlooked after a homeowner’s death.
The property remains exposed to risks such as fire, storms, theft and vandalism, regardless of whether the original owner is still living.
Keeping appropriate insurance in place can help protect the property while the estate is being administered and until ownership is transferred or the home is sold.
“A will is one of the most important documents you can have, but it's only one piece of the estate planning puzzle,” says Wessels.
“Homeowners should also consider whether their estate has enough liquidity to cover administration costs and maintain the property. Proper planning today can spare loved ones from unnecessary financial stress at a time when they should be focused on healing.”
Protecting a legacy takes more than a will
Wills Month is an opportunity to think beyond simply deciding who should inherit your assets.
Effective estate planning should also consider whether loved ones will have the financial resources to manage the estate, maintain important assets and carry out the wishes set out in the will.
Reviewing a will regularly is an important first step. It should, however, form part of a broader financial plan that takes into account appropriate life cover, home insurance and sufficient liquidity to meet estate-related expenses.
Planning for these costs now can help families protect a valuable property and avoid unnecessary financial strain when the time comes to put an estate into effect.
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