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While we can’t control everything, there are many things within our control – and, one of the most important of these is drawing up a will and ensuring that it is regularly updated. With 11 – 15 September recognised as National Wills Week in South Africa, it was the perfect time to knuckle down and get the house in order, as it were.
A will, also known as a ‘last will and testament,’ is a legal document that ensures that the final wishes relating to the disposal of a person’s assets at the time of death are followed. Many consumers know the importance of this document, yet a high percentage of working South Africans do not have a will in place and do not understand the process of arranging a will, or the importance and legal implications of not having one in place.
During National Wills Week, selected legal firms across the country offered a service to South Africans to have a basic will drafted free of charge. If you don’t have a will, or it hasn’t been updated for a while, now is the perfect opportunity to learn more about the importance of having a will and what this legal document means for you and your chosen beneficiaries.
“Ensuring that you have a will in place and it is updated regularly, particularly when your personal circumstances change, is essential. You should list all your assets – including your vintage car collection or your workhorse bakkie – and nominate who should benefit from these assets to ensure peace of mind,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank.
What to consider when drafting a will:
- Keep it simple and ensure that you name your beneficiaries and what they will each receive (in the event of more than one beneficiary)
- Provide the identity number(s) of your selected beneficiaries
- Consider your marriage type as this can impact how you draft your will
- Ensure you nominate a guardian for your children or dependents
- It is important to sign the document because a will is only valid if it is signed by the correct person
- Your will should also be dated to ensure that the last valid will can easily be identified
- Review your will regularly, especially when there is a major change in your life or in legislation
- Ensure the will document is safely stored and easily accessible to relevant parties
In the unfortunate event of an individual passing away before fully settling their vehicle finance, it is essential to comprehend the financial ramifications and the available avenues for resolution.
Upon the demise of the vehicle owner, the remaining debt on their car loan becomes the responsibility of their estate, under the guidance of the estate executor. This entails the obligation to continue making monthly loan payments until the entire loan amount is paid off.
Several options are available for settling this debt:
Using Estate Assets
If the deceased wishes for their heirs to retain the vehicle, they can specify in their will that the outstanding debt should be settled using available cash, investments, or insurance within the estate. Alternatively, assets within the estate may be sold to cover the debt.
Obtaining a New Loan
In certain cases, a surviving family member, such as a spouse, may choose to settle the amount still outstanding by applying for new vehicle finance in his or her name.
Vehicle Sale
Selling the vehicle to settle the remaining debt is a viable alternative. This can be accomplished by the executor surrendering the vehicle to the financier, who will then auction it publicly, as the executor lacks the authority to sell the vehicle while it’s still under finance. The proceeds of the sale of the vehicle will be used to settle the outstanding vehicle finance. If the sale amount falls short of the debt, the estate must allocate its funds to cover the remaining balance, potentially reducing the inheritance available to heirs. If the sale amount is higher than the outstanding balance, the credit remaining after the outstanding vehicle finance is settled is paid to the estate.
Moreover, individuals should consider the benefits of credit life cover. Opting for credit life insurance can offer added peace of mind. While it may require adjustments to one’s budget and lifestyle, the sacrifice is worthwhile. In the unfortunate event of death or disability, the credit life cover will settle the outstanding vehicle loan amount, effectively transforming the car into an asset owned by the estate. This facilitates its transfer to heirs with greater ease.
Understanding these options is pivotal in navigating the financial aspects of a deceased individual’s vehicle finance contract.
“All of these factors reinforce the importance and necessity of having an updated and valid will in place that accurately and securely reflects one’s final wishes. This ensures that the loss of a loved one is not further compounded by unnecessary trauma and uncertainty if the person has passed away without a will,” says Gaoaketse.
