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This is why Alida Brink, Fiduciary Specialist at Old Mutual Wealth Trust Company, says that when it comes to dealing with the estates of ultra-high net worth clients, the more thorough and comprehensive the will, the better. “With more wealth comes more complexity, and a simple one-pager will just doesn’t carry the level of detail required to cater for all possible scenarios.”
Commonly overlooked scenarios referred to by Brink include options available around inherited assets, treatment of gifts given during the testator’s lifetime and the possibility of an heir being insolvent. “The inclusion of a plethora of clauses serves as a ‘catch all’ and therefore may include scenarios that a testator would never even consider at the time of drawing up their will.”
Furthermore, even in a case where no heir is a minor, Brink emphasises the importance of including a ‘trust for minor beneficiary clause’. “This clause becomes important in a case where an heir predeceases the testator and the testator has died before getting to amend their will after the heir has died. In such a case, the law automatically dictates that an inheritance is passed on per stirpes to the descendants of the original heir.
“If the heir’s descendants are minors, the ‘trust for minor beneficiary clause’ will make sure that their inheritance has the option to go into a trust, should the amount justify setting up a trust, as opposed to the inheritance lying in the guardians’ fund until they reach the age of 18.”
Additionally, says Brink, the powers for the trustees and executors are wide and comprehensive, and thus contribute significantly to the complexity of a will. “When a will trust is set up from a will, the will then essentially becomes the trust deed, and dealing with a trust with a one-pager will is a nightmare.
“It is therefore better to cater for all powers of the trustees in the will to make economic and administrative choices in favour of the beneficiaries. We try to not be too prescriptive in our wills, so that we can deal with our client’s wealth in the best possible way,” she explains.
Brink concludes that as nobody knows what the future holds, including every possible clause cannot hurt – especially in the case of high net worth individuals. “While all clauses will probably not apply on the client’s death, there is no harm in including them as a precautionary. If a clause does not apply, it will simply be ignored when the estate gets wind up. However, if applicable, such a clause could result in a great deal of your heir’s time of money being saved.”