WINDHOEK - When American music icon Prince passed away in April 2016 many were shocked to learn that he had no will for his estate, which was valued at around US$200 million by Forbes Magazine. For almost three years after his death his estate was still in limbo.
“Having a valid will is arguably one of the most important financial decisions you can make for yourself and your loved ones,” says Aubrey Hardine, Wealth Financial Planner at Nedbank Namibia. According to him a will is one of the most vital documents you will ever sign. “Many people underestimate the importance of a will and post-pone it to later in life.
However, if you pass away without a will, your family will be left with huge administrational responsibilities and dependents such as a spouse and children might be without an income,” explains Hardine.
Another unfortunate, but interesting case, involved the estate of a deceased son who was awarded over N$1 million from a wrongful death lawsuit. When he died, his father, who had not been a part of his life for over 32 years, stood to inherit the entire estate, leaving close relatives and siblings completely out of the picture!
“Most people do not realise they can disinherit loved ones out of their will.” Wills specifically outline how you would like your estate distributed. In the absence of a will, your estate may end up in the hands of someone you did not intend to inherit.
“It therefore makes sense to obtain the right advice about taking care of this crucial aspect of your financial planning. By doing so, you will ensure financial stability for your family when you can no longer provide for them and it protects your assets,” says Hardine.
The Master of the High Court has jurisdiction over the estates of people who die with a valid will and also ensures that the executor or estate administrator keeps to the stipulations of the will and completes the administration of the estate in an orderly, professional and timely manner.
The Namibian law states that if a person passes away with no will, the estate will be managed and executed according to a law, called the Intestate Succession Ordinance 12 of 1946. This means that the government of Namibia will decide on and manage the estate, which can be a very lengthy process and sometimes take a couple of years. “Having a will speeds up the validation process,” explains Hardine.
Furthermore, the Intestate Ordinance applies to persons in civil marriages, with the exception of persons in northern Namibia who had civil marriages, which were out of community of property and people without an ante-nuptial contract. “When drafting your will, keep the legal framework of your marriage in mind because it determines how your estate could be distributed,” Hardine advises.
“Remember, your will is not set in stone and can be altered while you are still alive. Life changes, such as births, deaths, and divorce create situations where changing your will are necessary,” Hardine emphasises.
“When you draw up your will, you should also consider preparing your powers of attorney,” he says. A Power of Attorney allocates the responsibility to a trusted person, chosen by you, to make decisions on your behalf. This might mean they will have to manage your financial affairs or making certain personal decisions for you at the time of your death.
Other critical aspects you should consider when drafting your will include making sufficient provision for executor fees and creditors to be paid, assets owned outside the country and official documentation accompanying your will. If there is no cash available in your estate, it might be necessary to liquidate some assets to pay for executor fees or outstanding liabilities and bills. If you own assets in another country, it is advisable to create a will in that country. “Having a will in the country where you own the assets simplifies the distribution thereof,” Hardine explains.
Important documents to hand to your financial planner are copies of IDs of all the heirs and guardians, the Ministry of Home Affairs’ documentation for legally adopted children, a divorce order from the High Court, gun licenses and safe custody agreements.
“A will might not be on your priority list currently, but I encourage you to visit a financial planner at any credible organization such as Nedbank Namibia to get advice on drafting your will. It is one of those important things in life which might not have an impact on you now, but that might leave your loved ones with a difficult life after your death,” concludes Hardine.
2019-02-21 10:06:17 3 months ago