Understanding the Importance of a Will

By Katlego Mei, CFP® (Financial Planner at Galileo Capital)

Many South Africans don’t have a valid will. This means lots of families are left vulnerable to financial trauma. In this piece, I discuss the importance of wills in personal finance and estate planning. Understanding the significance of wills can profoundly impact the well-being of your loved ones. So, let’s dive in and explore why wills are essential and how they can help you protect your assets and provide for your family.

Why are wills important?

Control of your assets: One of the primary purposes of a will is to specify how your assets should be distributed after your death. Without a will, your assets will be distributed according to the law of intestate succession, which may not align with your wishes.

Caring for young children: If you have children under 18, a will allows you to designate a guardian to care for them in the event of your death. This ensures that your children are cared for by someone you trust and who shares your values.

Avoiding family disputes: A well-drafted will help prevent family disputes over your assets and reduce the likelihood of legal battles among your loved ones. By clearly stating your intentions, you can minimize confusion and potential conflicts.

Naming an executor: When you create a will, you can choose an executor to carry out your wishes and handle your estate. This person will manage your assets, pay off debts, and distribute your remaining assets to your heirs. It is always a good idea to choose someone with the ability and experience to do the required work.

Estate planning: A will is a crucial component of your overall estate plan, which includes various documents and strategies to protect your assets and provide for your loved ones. By creating a comprehensive estate plan, you can ensure your wishes are fulfilled and minimize the financial and emotional burden on your family.

Remember that not all your assets will be distributed according to your will. Some assets, such as retirement funds, life insurance policies, and annuities, are dealt with outside your will. Ensure that your beneficiary nominations are up to date. Reviewing your overall estate plan and ensuring all your assets are properly accounted for is essential.

In conclusion, wills are vital in personal finance and estate planning. They allow you to specify how your assets should be distributed, designate guardians for your minor children, and avoid family disputes. Creating a comprehensive estate plan can protect your assets, provide for your loved ones, and leave a legacy. So, take the time to review your current estate plan or consult with a professional to ensure that your wishes are properly documented and your loved ones are taken care of. If you already have a will, ensure that it is up to date.