As a 1Life Insurance policyholder, you have access to the Truth About Money Wills & Estate Benefit, which means you get an expert from Law for All to help you draft a valid will for you and your spouse. Because we’re all about making your life simpler we drew up this list of 4 things you should do before you meet with the team to make drafting your will quick and easy.
1. Make a list of all your assets
Your assets are anything and everything you own that has a value. When you die, your assets, or the proceeds of the sale of your assets after your debts are paid, are distributed to your heirs as specified in your will.
Your assets include:
- Your home
- Vehicles, including bicycles and motorbikes
- Digital equipment such as cameras, TVs, laptops, phones and tablets
- Personal items such as jewellery, art, perhaps even a designer item in your wardrobe
- Investments such as a property, unit trust account, ETF or online trading account, money in the bank and savings accounts, AND any digital assets such as cryptocurrencies
Be specific in your list and include account numbers, accurate descriptions and full names of items and/or accounts.
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Assets that you don’t need to mention are those that can be excluded from your estate such as life insurance and retirement funds, including pension funds, provident funds, retirement annuities and living annuities. The pay-out from these policies and funds are paid directly to the beneficiaries you have named. Just be sure to let your beneficiaries on these policies and funds know that they are beneficiaries and how to claim any death benefits due. Your insurer or financial services provider will have details on how to claim.
2. List your dependants and name your heirs
Make a list of your dependants. These are the people that depend on you financially and/or benefit from your income. These are usually the people who will inherit your assets.
When you’ve got a list of all your assets and dependants, you are ready to decide who gets what! For example, you can leave everything to your spouse, or leave specific assets to your heirs, such as your house to your spouse. Take some time to consider who gets what, taking into account who depends on you and what financial support they may need when you pass.
Remember, if you are married in community of property without an antenuptial contract, your estate is jointly owned by you and your spouse. Half of the joint estate will revert to your spouse on your death (you cannot leave all your estate to someone else as your spouse owns half!) You can leave your share of the estate to whoever you choose.
And while legally you can leave your assets to anyone you choose, your minor child dependants may have a legal right to claim maintenance if they are not provided for in your will.
When you name your heirs in your will you need to be specific. Make sure you have all these details for your beneficiaries:
- Full name
- ID number
- Relationship to you
- Contact details
If minor children are among your heirs, you should note that they cannot take possession of any inheritance until they turn 18. Their inheritance will be paid into the Guardian's Fund unless you have set up a trust. You can read more about setting up a trust for minor children in this blog.
3. Agree on a guardian for your minor children
If both parents are deceased, children under the age of 18 will need to be cared for by a guardian. Discuss with your family who you want to be your children's guardian, and then approach them for their agreement. You can also chat with them about how you will provide for your children in your will.
Remember to: Get the full name, ID number and contact number of the guardian.
4. Agree on an executor
Executors implement your will, making sure your estate is wound up (all your debts paid and assets distributed as per your wishes). The process of winding up an estate is fairly complex with many legal and regulatory requirements, making the job of an executor fairly onerous and time consuming.
It is advisable to name a legal or fiduciary expert as executor, although you can name a family member alongside an expert to help them.
Top tip: Include your will in your life file with all your important documents such as title deeds to property and ID documents. You can read more about preparing your life file in this blog.
Don’t forget about liquidity
Your estate will need some cash to pay expenses as it can take some time before your debts are paid and your assets distributed. These costs include executor fees and ongoing living expenses such as school fees. You can read more about these costs in this blog.
Unless there is cash on hand, some assets may need to be sold to pay these costs, leaving less for your loved ones to inherit. One way to ensure this doesn’t happen, is to have a policy, such as the 1Life Wills and Estate Plan, that covers cash shortfalls in your estate and provides for a valid will.
Ready to draft your will
Prep work done, now for your will! You’ve got all you need and are ready to get your valid will drafted. You can read more about how to draft a will in this blog.
Your will is one of your most important documents
Your will is part of the legacy you leave your family and ensures your wealth benefits your loved ones and future generations of your family. Start preparing yours today!
With thanks to Law for All for their assistance in compiling this blog.