Financial Advisors have urged consumers to draw up a will to ensure that their assets are distributed accordingly once they have passed on. They have also called on consumers to nominate beneficiaries for their life covers.
They warn that if one dies without a will, the winding up of their estate could be delayed for months if not years.
According to the experts, a will does not supersede the beneficiary’s nomination on your Life Cover, but the Life Cover must be updated from time to time to avoid a situation where it contradicts your will.
Legal Manager at Old Mutual, Monica Moodley, says while beneficiary nominations are final, there are options to change it.
“Beneficiary nomination is final. There are options to change it and to avoid complications. The beneficiary nomination must always be in line with the beneficiary nomination on the will.”
Intestate Succession Act
If a person dies without a will, the laws of Intestate Succession Act will apply and the Master of the High Court will administer their estate. It could take several months, and even years, before the estate is wind up.
“If the beneficiary has not been nominated and there is no will in place, then assets will be distributed by the courts and it could take a long time before the estate is wind up,” Moodley says.
Life cover for young people
If you are young and do not have dependents, you still need life cover insurance and a will. Your Life Cover will be utilised to pay for your debt obligations assets you have acquired over the years.
“We think we need Life Cover only if we have dependents, but we still have to pay for our debt obligations and tax when we pass on,” Moodley says.
Experts agree that it is important to have both the life insurance and will and nominate beneficiaries to avoid delays and complications during the winding down of one’s estate.
The importance of having life insurance and a will:
Source: SABC News (sabcnews.com)