Advice Column, Money, Parenting

How a bespoke Last Will & Testament will save your business

  • Parenting Hub
  • Category Advice Column, Money, Parenting

Take a moment. ….Now take a deep breathe.  Imagine that was your last.  Nightmare! You can’t imagine anything worse, right? Wrong! 

Now imagine this night terror…

You’re unprepared for death.  Everything you’ve spent your life working so hard for, your business, your immortal legacy, your white Pickett fenced home, your precious children and your loyal Labrador are all wasted away in the hands of the South African default system and the taxman.

If you do not have a Last Will & Testament (“Will”) in place, this is the detrimental reality your empire and your loved ones face.   If you have a template “google” version of a Will, be cautioned that that is potentially more hazardous than not having a Will in place at all.

Entrepreneurs and business owners are often concerned with limiting business risk.  In order to do so it is vital to engage in an estate planning exercise which ensures that your business interests and your empire are given mechanisms to survive your death, whether it be that your business interest is inherited by a family member or your business co-owners are given a mechanism to pay your business interest over to your loved ones.  Failing to do so is likely to result in major losses and the crashing of an empire.

It is imperative to have a bespoke Will drafted by a professional who, through their vast knowledge of the law, is able to tailor the most suitable estate planning mechanisms which give effect to your intention … and a little less for the taxman.

What to put in your will…

  • Your voice and instruction, enforceable by law, as to the division of your assets (your business in it’s entirety, the house, the car, investments, the special ring you want your daughter to have). i.e “who gets what”.
  • As a business owner a valid will allows you to leave an immortal legacy.

Often sole trader and partnership run businesses are left in a detrimental situation on the passing of a key player. The business is abandoned, only to later be sold for well under market value, by an executor with no relevant business experience or who isn’t given sufficient powers in order to protect your business interests during the winding up process. Powers granted to your executor in terms of your Will.

As well as mechanisms to ensure your loved ones are protected against your enterprise’s debt liabilities.

A business owner will always have debt liabilities from which your loved ones need to be protected;

In practice, we often see many a business having to be liquidated or sold just to cover taxes payable. There is a dire need to minimize tax and estate duty payable whether through the creation of separate business and personal asset trusts, or otherwise.  There are options available to every circumstance and every lifestyle to sidestep many of the financially detrimental consequences of your passing away. It is your benefit to make use of these.

  • As a parent of minor children, the appointment of the desired and most compatible guardians for your children. Leaving the appointment of the caretakers and the future of your children, where you are not here to safeguard them, should not be left in the hands of a Court or a distant relative you haven’t seen (or liked) in years.
  • An Executor who will be responsible for winding up your estate and manage your affairs as if he or she had set foot in your shoes. Bear in mind that the executor is entitled to remuneration of 3,5% of your gross assets and 6% of any cash value of  your estate.  Value which rightfully belongs to your family, not a financial institution. For this reason we advise our clients to nominate a family member as executor who is then able to appoint professional agents to assist in the winding up process for a mutually agreeable fee.
  • Testamentary Trust– it’s structure and inner workings to assist you in “asset protection, estate duty savings, dilution of income tax and the protection of beneficiaries such as minor children and/or incapacitated” heirs. Means for the maintenance of your dependent heirs are similarly put into place in this way.

What makes a will valid…

Validity hinges on a number of formalities which include:- signing within a certain measurement of the text at the end of the Will as possible, signing in the presence of at least 2 witnesses over the age of 16 and of sound mind, requirements to be met where a testator (or testatrix) is only able to sign by making a mark or otherwise, effecting valid amendments and formatting formalities. Please note that is by no means an exhaustive list

Lack of compliance with these formalities has resulted in the Master’s Office rejecting Wills, leaving families deprived and having to resort to financially and emotionally costly High Court litigation.

When not to use a free DIY online template…

“Using a DIY will is like pulling out your own tooth with a pair of pliers instead of going to the dentist”

A bespoke Will is an affordable investment for your estate as well as your heirs.

10430824_839063049450371_7135562584190533673_nSpecial Offer… 

As a ParentingHub affiliate, MBI is offering you a 30% discount on all Estate Planning services which include drafting a Last Will & Testament, liquidity determination and strategy. Valid until end of February 2015.

For a Free, no obligation, consultation to ensure your families future is taken care of, give our dedicated team at MBI Attorneys a call on:-

Chantelle Martins                        Beverley Brown

Chantelle@mbiattorneys.co.za        bev@mbiattorneys.co.za

082 837 1358                                       082 573 9680

“Planning is bringing the future into the present so that you can do something about it now”.

 

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