Life Insurance – Why Your Will Matters
Do you have a will in place? Have you and your spouse set out instructions that will help ensure your children are financially secure in the event of your deaths? Do you know if your parents have a will, and who the executors of their estate are?
These aren’t the kind of questions we typically like to think about – often, until it’s too late.
Our latest blog explores why so many South Africans are unprepared in this respect, and why having life insurance – and a will – should be the first thing on your to do list.
WHY WILLS MATTER
We all know the saying that two things in life are inevitable: taxes and death. As a society, our own mortality is a subject we tend to shy away from – perhaps we avoid these conversations while we are still relatively healthy because they hold immeasurable weight and consequences.
Simply put, setting out instructions for what happens after you die is essential not only for your own peace of mind, but also to make it as easy as possible for the people closest to you who are left to deal with the emotional consequences of your passing and the administration and financial matters you’ve left behind.
This is why it is so vital to have an up-to-date will, to help your loved ones to determine what needs to happen when you’re gone with the least possible amount of stress and uncertainty.
UNDERSTANDING THE IMPLICATIONS
According to Business Day, over 70% of South Africans do not have a will in place, which has the potential to complicate matters significantly in the event of their death. So what happens in these cases?
When a person dies without a will in place, it is left in the hands of the government to decide how the deceased’s estate is handled and how it will be distributed.
Experts remain puzzled as to why South Africa has such a high prevalence of citizens who do not prepare wills.
A potential answer is that simple misconceptions exist about the function of a will. Do South Africans understand the value of a will, or do we feel like it is not relevant?
Perhaps one of the greatest misconceptions is that you need to be wealthy in order to have a will and an estate plan drawn up. Every citizen with a bank account has an estate – the number of assets you own increases the size of the estate, but an estate is just that, no matter its size.
A will determines what will happen to your estate and sets out provisions for how it should be dealt with in the event of your death, avoiding any unnecessary delays or uncertainty during an already difficult time.
A will is also not only for monetary value, but can also help if you have specific items of sentimental value that you wish to pass on to your children or grandchildren.
PREPARING FOR YOUR FAMILY’S FUTURE
If you are the sole provider for your family, a will and a life insurance policy can ensure your family are cared for.
For new parents, the safety and well-being of your children is always at the forefront of your mind, despite the myriad of distractions that come with raising a family.
You dream about how their future aspirations and goals will become a reality. But if you are no longer by their side, how can you prepare so that they will be supported after you have gone?
Should you die without a will, and specifically as a parent, your child’s inheritance will be paid into the government’s Guardian Fund which creates a labyrinth of processes to go through before any funds can be accessed.
Along with making a will to avoid this additional bureaucracy and delays, you should also ensure that you nominate a guardian in the event of both parents passing away, or in the event of the death of a single parent.
This is an important decision which should never be left up to anyone else to decide. We recommend that you consider creating a testamentary trust as part of your will, which protects your children’s inheritance and avoids interaction with the Guardian Fund.
Are you considering setting up a will? Do you need to amend your existing will now that you have become a parent? Make the right decisions today for the future, and speak to one of our brokers for advice and assistance with your life insurance policy.