WHAT TO DO ABOUT YOUR WILL WHILE IN LOCKDOWN

AS THE death toll from the coronavirus climbs, the demand for wills has spiked. If you did not get your affairs in order before the lockdown, the crisis has thrown up some practical challenges in terms of how to get that done legally. The Wills Act requires the following for the execution of a valid will:

◆ The testator must sign the will in the presence of two witnesses, or acknowledge his/her signature in the presence of the two witnesses;

◆ The witnesses must sign the will in the presence of the testator and of each other; and

◆ The witnesses must be 14 years or older and must be able to testify in court.

With physical distancing rules, legally executing a will is practically impossible, says the Fiduciary Institute of Southern Africa (Fisa).

On April 6, Fisa made an urgent submission to the Department of Justice, asking it to declare the drafting and execution of wills an essential service. Fisa says it has had no response.

Since the easing of lockdown restrictions is hopefully imminent, the submission might be moot,

Should I review my financial plan and make some urgent adjustments due to how Covid-19 is changing everything?

Name withheld always clear when you should assess your financial plan and the products that form part of it. The Covid-19 pandemic has been daunting for investors as they watch the markets fall sharply. Although it’s good to schedule regular check-ins regarding the progress on your financial plan, fear-driven responses to market turmoil are unlikely to deliver your desired outcome.

A detailed review should take place once a year as a matter of habit, so you can assess whether everything is still on track and aligned to your goals. If something changes in your circumstances, it might be different (such as a significant income shift or having a baby). There may be new obligations, or your goals may change and require more thinking. Whatever the case, when your life changes materially, so should your plan.

If the pandemic has made you realise that your plan is lacking or outdated (even if your circumstances are much the same), don’t lose the impetus to act, and contact your adviser. The urge to act and “protect” yourself can be overwhelming. This is precisely where a structured review of your plan can add to your sense of security. If your portfolio is aligned to your needs and objectives, the best advice may be to sit it out. Your financial adviser can help you with an objective approach, so but Louis van Vuren, Fisa’s chief executive, says it’s a costly issue for those forced to approach the High Court to have a will validated.

“We want the ministry to allow people the freedom to sign a will legally,” he says. “With any other contract, if there’s a dispute the parties are available. But when you die, you can’t defend it. That’s why the strict requirement (of two witnesses and a testator) exists the world over. A will is a unilateral legal act and you have to be able to prove the provenance of the document.”

An electronic will, such as a PDF file with an electronic signature, does not constitute a valid will in South Africa. “Electronic wills are not regarded as valid, without going to court, because they’re not compliant with the Wills Act,” Van Vuren says.

The Electronic Communications and Transactions Act (Ecta), which made electronic signatures legal, specifically excludes four types of documents: those pertaining to wills, the sale of fixed property, long-term leases and bills of exchange.

South Africa is not the only country grappling with the issue of validating wills. In Canada and Australia, emergency legislation has allowed parties to sign hardcopy documents during video

I’ve seen that some share prices are falling quite a bit. Does this mean now is a good time to get into the market?

Name withheld

Between February 17 and March 19, the JSE All Share Index declined by 35%. Since then it has recovered substantially, clawing back about 80% of these losses as at April 20. This doesn’t mean that most of the buying opportunities have disappeared.

The uncertainty about the impact that Covid-19 will have on companies’ earnings will most likely lead to continued volatility in share prices, both locally and abroad.

Investors should focus on companies that have proven management, modest debt levels, strong cash flow, solid distribution channels and resilient business models. Particularly in the current economic climate, it is advisable to build a well-diversified share portfolio with companies that span a range of sectors. With these guidelines in mind, investors should be rewarded with above-average returns if they are prepared to be patient.

The merit of buying shares and the timing thereof are rarely made in isolation. It is advisable to evaluate your portfolio as a whole and determine whether you have the capacity to increase your exposure to listed equities given your existing equity conferencing.

Van Vuren says the Disaster Management Act, under which the lockdown measures have been promulgated, does not give the Minister of Cooperative Governance and Traditional Affairs (who issues all regulations under the act) the power to amend legislation. Only Parliament, which is in recess, can do that.

David Thomson, senior legal adviser at Sanlam Trusts, suggests it’s time to bring Ecta in line with the 21st century. He says insurance policies can be signed electronically. “The act is antiquated: electronic systems leave a trail. Clients don’t understand why they can’t sign electronically – they want to know why we don’t have a solution.”

DECEASED ESTATES

During the lockdown, the Master’s Office is dealing with section 18.3 deceased estates only – these are estates with a value of less than R250 000. “We expect a backlog in estate administration; people haven’t stopped dying because of the lockdown,” Van Vuren says. “Billions of rands are locked up in administration.”

With bank accounts frozen after death, dependants are often severely

Covid-19 makes me very anxious about being able to retire. Is there a solid solution?

Name withheld that Covid-19 is the cause of stress for many investors. Being faced with the reality that your retirement savings have reduced dramatically within a short period will cause sleepless nights. The biggest asset you have in difficult times like these is your financial plan. Do not react to fear before speaking to your financial adviser.

Although there are a multitude of opinions on how to gain financial wealth, many of these are flawed, with promises of unrealistic returns, setting the scene for capital losses, from which you will not be able to recover. A few of these small losses add up over the years, creating a hole in your retirement assets, which becomes visible only once in retirement. Most people do not have the ability to earn an additional income at this point, making the hole a permanent fixture in their finances.

Although the world will most likely look a bit different in the years to come, the same principles with regards to financial planning still apply. If possible, saving patterns must be continued. Many people now realise that they can afford only the necessities, and your retirement plan should be regarded as one. Altering your

FISA CHIEF executive Louis van Vuren offers the following practical ways to execute a valid will under the current circumstances:

◆ If the testator is a terminally ill patient in a hospital, the testator could sign in the presence of two nursing staff members who can sign as witnesses.

◆ If your relationship with your neighbours is such that you are comfortable that they sign as witnesses, you can place the will document through or over the fence and confirm to them on the other side of the fence that it is your signature that appears on the document. They can sign while you observe over or through the fence, complying with the requirement that the signing by the witnesses must cash-strapped, and executors of deceased estates cannot access frozen funds until they are appointed by the Master of the High Court and issued with letters of executorship. Deceased estate advertisements, which are legal requirements in the estate administration process, have been stopped in the Government Gazette and newspapers, which means further delays in deceased

I won’t be receiving my full salary in the next month or two. Can I stop my retirement annuity (RA) contributions?

Name withheld done, but the impact of doing so depends on the type of RA in which you are invested. There are typically two types of RAs: Lisp (investment platform) and lifebased.

If you invested via a Lisp, you could easily decrease, stop and later increase your contribution. This is a key benefit of Lisps.

Life-based RAs are typically offered by traditional life insurers, where your monthly premiums and any escalations are agreed when the policy is taken out. You’ll need to check with the life insurer whether they’ll allow you to stop contributing to your RA. Due to the current crisis, some insurers are offering premium holidays, depending on, for example, how long the policy has been in place. Other insurers may request that you make your RA paid-up, which could result in early surrender penalties for unrecouped costs.

You will need to decide after carefully evaluating your personal circumstances, and after checking in with the product provider. Retirement savings will ultimately allow you to provide for yourself when you are no be in the presence of the testator.

◆ It is not clear whether the local police station would be willing to allow SA Police Service members to sign as witnesses to a will if you walk into the police station and ask them to.

◆ Where none of the above is an option, the common-sense approach would be to date and sign the will properly, and also draft and sign a memorandum or letter making it clear why the will was not signed by witnesses, stating that the will is intended to be your last will and testament. The will can also be scanned after signature and emailed to a fiduciary practitioner. “This course of action will increase the chances of a successful application to order the Master of the High Court to accept the will as valid,” Van Vuren says. estates already under administration.

Irene du Plessis, managing partner at Sentinel International, says after lockdown, the Master’s Office backlog will surge. “They need to start working as soon as possible, at least to accept documents. The office is working on revisions to deal with electronic lodgement, but the Deceased Estate Act also needs to be brought in line with Ecta.”

I’ve remarried and have children from my previous marriage. What should I consider when it comes to estate planning so that everyone can benefit from my estate?

Name withheld second marriages can complicate the process of estate planning and present several challenges. Poor planning can easily lead to unintended consequences that create tension between a spouse and children.

A simple will won’t suffice for blended families if you want to protect your biological children’s ability to inherit. A will that leaves everything to your new spouse can result in your children from your previous marriage inheriting nothing, as there is no obligation on your surviving spouse to give these children anything, even if that was the agreement between you and your spouse.

Trusts are a practical way to ensure that both your spouse and your children from your previous marriage are looked after. There are different options with various levels of flexibility available. It is important that an independent trustee is appointed to avoid any conflicts between your current spouse and your children.

Working with a qualified fiduciary adviser or fiduciary specialist ensures your wishes will be carried out without unintended consequences.

As a result of space constraints, we are unable to publish the unit trust prices. The performance data can be found online at www.fundsdata. co.za/navs

ARE you feeling depressed at the moment? I certainly am. This virus has utterly upended the world that we took so for granted and there’s very little positive news on our progress in defeating it. Globally, its grip seems unrelenting.

So forgive me for broaching a topic that is likely to depress you further, but it’s something you need to consider at this time: emergency hospitalisation and the possibility that you won’t make it.

What may cheer you up slightly is that if you have your affairs in order, you are likely to sleep more peacefully, knowing that if anything happens to you, those closest to you will be not be burdened with extra worries in sorting out your finances. These preparations involve big things, such having life insurance and a valid will. But they also involve a number of small things that can easily be overlooked.

The worst aspect of this pandemic is that people are separated from their families in their time of deepest distress. A recent BBC programme highlighted how paramedics have the heart-wrenching task of loading sick people into ambulances with their loved ones looking on despairingly, not knowing whether they will see their partner or parent alive again.

In a blog on her firm’s website, Sue Torr, director of the Cape Town-based financial planning practice Crue Invest, has made a list of things you need to consider. Here are some of them:

◆ Personal and medical details. Have on you your identity number and contact details for your next of kin. You should also have your medical scheme number and what plan you are on, your GP’s contact details, and other relevant medical information, such as your blood type.

◆ Bank accounts. “Does your partner have access to your bank account login details? To whose phone are one-time PINs sent when transacting online? Does your partner know your ATM PIN if he or she needs to draw money?” Torr asks.

◆ Minor children. If you are a single parent, ensure that you have plans in place for the care of your children.

Payment of accounts. Ensure that bills will continue to be paid.

◆ Access to cash. “Ensure that your loved ones can access your emergency funds quickly and with minimal red tape,” Torr advises.

◆ Living will. “A living will gives guidance to your loved ones and medical practitioners as to how you would like to be cared for if you are unable to communicate your wishes. If you have one, be sure to communicate it to your loved ones,” Torr says.

◆ Location of your will. Let your partner or family members know where your will is located, and ensure there are no old wills among your papers.

◆ Digital will. “This is an informal document that sets out the user names, passwords and login details to your social media platforms, online subscriptions and accounts, and instructions on managing these accounts in your absence,” Torr says.

◆ Power of attorney. Consider giving someone signing power over your financial and business affairs.

◆ Life policies and investments. Leave information about these with a loved one. Check that premiums will continue to be paid. Bear in mind that in the event of your death, the proceeds of life policies and retirement funds (but not discretionary investments) are paid directly to your nominated beneficiaries. Torr cautions that if you have not appointed any beneficiaries, the proceeds will be paid into your estate and will be subject to the winding-up process.

◆ For the full article, go to www.crue.co.za/ blog.