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JEREMY MAGGS: Estate planning is one of those financial decisions I think that many people delay, often until it is too late. Now, Discovery Life says up to 70% of South Africans die without a valid will, and that obviously leaves families exposed to delays, costs and disputes at an already difficult time.
Now, the company has enhanced its wills and trust services and Estate Preserver offering, and is also using its Own What’s Yours podcast to help South Africans understand the practical steps involved in protecting their assets and loved ones.
So let’s put this all on the table. I’m in conversation now with Harry Joffe, who’s head of legal services at Discovery Life. Harry, a warm welcome to you. Let me start with the obvious one. Why do you think so many South Africans still don’t have a valid will? It runs against conventional wisdom, doesn’t it?
HARRY JOFFE: I think the thing is, Jeremy, no one wants to actually address the issue that you might not be here and you’ve got to think of who gets what.
It’s fascinating, it’s not just a certain strata of people who don’t have wills. It goes across the board.
I was sitting with a company director the other day, and he’s got four kids, and sadly, only the first two have made it into the will, and the bottom two haven’t quite made it in yet.
That’s just what happens to everyone, no one wants to actually address this issue of your end.
JEREMY MAGGS: I’m glad you mentioned that you were in conversation with a company director because often, and I think this is a fallacy, people think it’s only something for wealthy people. But the reality is that anyone with assets and dependants needs to be thinking about the subject, and sooner rather than later, right?
HARRY JOFFE: Exactly, Jeremy. We often have younger people coming to us and saying, well, my house is totally bonded. My car is owned by the bank. Why do I need a will?
Then we say, well, you’ve got a couple of minor kids – who’s going to look after them if you pass away with your spouse? Do you have a trust for them to look after assets that are bequeathed to them?
Everyone has got some kind of assets that need looking after when they pass.
Even if you aren’t with a spouse and you don’t have children, well, surely you want whatever you’ve got to go to the people you want to choose and not have the [Intestate Succession] Act decide who gets what. So it’s just a question of controlling your assets after you pass.
JEREMY MAGGS: Harry, do you think the biggest misconception then that people have about estate planning is not realising, in fact, that however big or however small, they are still in possession of assets?
HARRY JOFFE: I think it’s that, Jeremy, and I think it’s not understanding the consequences of passing away without a valid will.
If you pass without a valid will, then the Intestate Succession Act kicks in and it just creates a pecking order of who gets what, and you might find your brother, who you don’t speak to, ends up with all your assets, which might not be what you want, or you might find, if you don’t have siblings, that your nearest blood relative gets things, and people just don’t realise that.
Even if you are single and you’ve got no dependants, you might want to leave assets to a charity. You’ve got certain requirements. We’ve even got clients who want to leave assets to their pets, and to do that, you obviously need a trust to look after the assets for the pets.
So everyone’s got assets they want to bequeath to people, and you want to be in control of exactly who gets what.
JEREMY MAGGS: Harry, what is the most common mistake, do you think, that can make a will invalid or difficult to enforce?
HARRY JOFFE: Good question, Jeremy. There are so many errors that we get. The first thing we get is the wills aren’t signed correctly or they aren’t witnessed correctly.
The Wills Act is very, very specific, very old-fashioned and very bitty on what makes it valid. So a will has to be on paper, signed in what we call wet ink.
No digital signatures and no digitally stored wills. It’s got to be an original on paper in wet ink. It’s got to have two witnesses who sign in the presence of the testator.
There are plenty of court cases, even now, where wills come to court not signed correctly, not witnessed correctly, and those wills are invalid. That to us is the biggest mistake.
We have so many of our clients, when they send the wills back to us to store, we actually check their signatures and we check the witnesses. Probably 10% of our clients who send wills to us to check and to store, we’ve got to send the will back to be signed correctly.
So that to me is the biggest issue. Clients don’t understand the technicalities of the Wills Act.
JEREMY MAGGS: Harry, tell me, how often should someone review or update their will?
HARRY JOFFE: Oh, that’s a good question, Jeremy. We have a couple of these old grandparents who want to change their will every few months whenever they have a fallout with their children or their grandchildren. That’s probably going overboard.
But we do like to say to clients that whenever there’s a major life-changing event that they go through, they get married, they get divorced, they have children, they have grandchildren, they change properties in which they live, things like that, any major life-changing event, they should update their will.
JEREMY MAGGS: Harry, I understand your argument about the signature in ink, but the world has also moved on. And do people, do you think, need to start approaching newer assets like cryptocurrency, online accounts and digital records in a different way?
HARRY JOFFE: Yeah, that’s another very pertinent question, Jeremy, because obviously with crypto there’s passwords and there are keys and all of those things, and it’s quite a challenge for people to try and work out the most optimal way to get these passwords to their heirs.
Obviously, they need to say in the will that they’ve got crypto so the heirs know that there is crypto, but you’re not going to put a password in the will.
So you’ve got to find an appropriate way to pass the password on.
I had one client recently who’s got two kids who don’t speak to each other. He said to me what he’s going to do is leave each kid half the password. So when he passes away, they’re going to have to speak to each other to access his crypto. That’s just an anecdote. It’s not a simple thing to get passwords to your heirs.
JEREMY MAGGS: That’s almost reconciliation from the grave. It’s very interesting. Harry, final question then. Discovery’s enhanced wills and trust services and Estate Preserver, what are you offering that is aiming to simplify this often, as you’ve outlined to me, very, very complex process?
HARRY JOFFE: Yes. We’ve got different routes where the bulk of our clients, who’ve got simple wills and simple needs and simple estates, can go to testamentary specialists who draft it via the system and get the will to them quickly and efficiently.
If you’ve got clients with more complicated needs, offshore assets, crypto, things like usufruct, more complicated assets, more complicated lives, we can refer them to a bespoke will offering through a bespoke law firm that we’ve linked up to, and that’s a journey.
But either way, we’ve got this product called the Estate Preserver, which indemnifies the most expensive costs around dying. So your executor’s fees, your testamentary trustee fees to create a testamentary trust, and your conveyancing fees are normally a big drain on an estate’s liquidity.
This product aims to indemnify our clients for those costs. There’s a whole formula, a whole method we use to work out the costs, and that’s how the Estate Preserver works.
It means clients know they can get a professional executor, a professional trustee, obviously a professional law firm, to do the conveyancing, and those costs, which are quite expensive, are indemnified by the product.
JEREMY MAGGS: Harry Joffe, thank you very much indeed, head of legal services at Discovery Life. Learn more on Discovery’s Own What’s Yours podcast today online.
Brought to you by Discovery Life.
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