By Shamiso F. Mangwengwende, Senior Associate.
Estate planning is the process of preparing for the transfer and handling of a person’s wealth and assets during his/her lifetime and or after their death. An estate consists of all property of any kind that is registered in the person’s name or belongs to the individual with no provision for others to own it. Assets like life insurance, pensions, real estate, vehicles, cash and shares, are all part of one’s estate.
Some of the most effective tools for estate planning are Wills, Trusts, Companies and Ante-nuptial/Pre-nuptial Contracts. These are not exhaustive but these are some of the most common tools that are used in Zimbabwe.
Wills
What is a will?
It is a legal document in which a person specifies his or her wishes and the method to be applied in the management and distribution of his/her estate in the event of one’s death. The contents of a Will include instructions on the handling of one’s assets and personal belongings, guardianship of minor children, appointment of an Executor and burial arrangements.
This is the most commonly used tool for estate planning purposes in Zimbabwe.
What are the requirements for a valid Will?
- It must be in writing;
- The Testator (the person making the Will) has to be over the age of sixteen (16);
- The Testator must sign each page of the Will;
- It must be signed in the presence of two witnesses, at the same time, who must also sign every page of the Will.
Advantages of a Will
The advantage of having a Will is that it is an inexpensive way of protecting one’s assets which minimises fights amongst family members. It also allows designation of guardians for minor children which ensures protection of minor children.
Once a Will has been prepared and signed by the Testator and the witnesses, it can be submitted at the office of the Master of the High Court at the option of the Testator. This extra step minimises disputes and guards against fraudulent Wills because the Will that is in the Master’s possession is taken to be valid and applicable.
Disadvantages of a Will
The office Master of the High Court is responsible for overseeing the process of the administration of the estate of a deceased person and that process incurs various taxes, duties and fees before the estate can be wound up by the Master of the High Court. For example, the Master charges an estate duty that is equivalent to 4% of the value of the assets of the estate and a professional estate administrator also charges 4% of the value of the assets of the estate for their services. These are fees that the estate itself and family of the deceased may not be liquid enough to pay within the specified timelines.
A Will can also be easily challenged because a Will becomes public record upon the death of the Testator. The capacity and mental competence of the Testator can also be easily challenged, especially in relation to “deathbed Wills” which are made at the last minute just before the death of the Testator.
Wills only take effect after death and therefore do not allow for protection of assets during the lifetime of the Testator. An individual would also then have to consider setting up a Trust in order to manage their assets during their lifetime.
Trusts will be discussed in detail in the next part of this article.
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