MICHAEL MARÉ | Why a will alone doesn’t protect your family

In South Africa estate planning is often treated as a one-off legal exercise: draft a compliant will, consider estate duty and move on. In practice it is far more nuanced. A sound estate plan must account for liquidity, timing and the practical realities of estate administration.

All deceased estates are administered under the supervision of the master of the high court. In practice, the system remains under pressure. Backlogs and administrative inefficiencies have caused delays in issuing letters of executorship. Until this document is issued no executor has legal authority to act.

This has immediate consequences: bank accounts are frozen, assets cannot be transferred or sold, investments cannot be accessed, and estate liabilities cannot be settled. In legal terms the estate only becomes capable of formal administration once the letter of executorship is issued. Only then may the executor gather assets, settle debts and make interim distributions.

The gap between death and the issuing of the letter can extend for several months. During this period a surviving spouse or dependants may have no access to capital tied up in the estate. This can place immediate pressure on household cash flow, with ongoing expenses continuing while access to capital is restricted, adding avoidable strain during an already difficult period.

To illustrate the risk, consider a common scenario. A married individual dies unexpectedly, leaving behind a spouse and children. As the sole breadwinner, most household assets and bank accounts are held in the deceased’s name. Though the will is valid and uncontested, the estate cannot be administered until the letter of executorship is issued.

Meanwhile, debit orders fail, school fees remain payable and daily living expenses continue. Despite there being sufficient assets in the estate, the surviving spouse may be forced to rely on family support or short-term debt simply to bridge the administrative delay.

Effective estate planning must therefore separate administration risk from liquidity risk. The objective is to ensure dependants have access to capital immediately, while the formal estate process runs its course.

• Maintain the legal foundation. A valid and up-to-date will remains essential. It provides the legal framework for distribution and reduces the risk of disputes. Beneficiary nominations on life policies, endowments and retirement funds should be reviewed regularly and aligned with current personal and family circumstances.
• Create immediate household liquidity. Each spouse should have access to capital in their own name. When an individual dies, accounts in their sole name are frozen. A surviving spouse without independent liquidity may face immediate strain.
• Use structures that bypass the estate. Certain assets can pay directly to nominated beneficiaries without passing through the estate administration process. Endowment policies allow for beneficiary nominations, which means payments can be made directly within weeks, provided the structuring was set up correctly. This can provide bridge capital during estate administration. Life policies with valid beneficiary nominations pay directly to beneficiaries and do not form part of the estate for liquidity purposes. They remain an effective tool for protecting dependants against short-term cash flow pressure. A standard tax-free savings account pays into the estate. However, some providers structure these investments through endowment wrappers that allow beneficiary nominations similar to endowments. This can accelerate access to capital.
• Understand retirement fund treatment. Retirement funds are governed by the Pension Funds Act 24 of 1956. Trustees, not the will, determine the distribution of benefits. These funds do not form part of the estate for distribution purposes and are paid directly to financial dependants and nominated beneficiaries. However, trustees are required to conduct a dependency investigation. This process can take several months, and in some cases up to a year. Where families rely heavily on employer-provided retirement and life cover benefits, the timing of these payments should be carefully considered as part of the estate planning process. Living annuities are treated differently. Provided beneficiary nominations are in place, benefits can generally be transferred directly to nominated beneficiaries without the same dependency investigation delays.
• Maintain documentation readiness. Even well-structured estates experience delays if documentation is incomplete. Common causes include delayed death certificates, missing marriage certificates, unregistered marital status updates and incomplete beneficiary information. A practical estate file should include the original will, copies of identity documents, marriage certificates or antenuptial contracts, lists of accounts and payments, policy schedules and a current summary of assets and liabilities. Keeping this information accessible can significantly reduce administrative delays.
• Consider your digital estate. Estate planning increasingly extends beyond traditional financial assets. Photographs, documents and personal data are often stored on cloud platforms. Cryptocurrency wallets may hold material value, with access dependent on private keys or passwords. Without planning, digital assets can be permanently lost. Clear instructions, secure storage of access credentials and the nomination of trusted individuals are becoming essential. Social media accounts and online businesses should also be addressed to prevent avoidable distress or reputational risk.

A comprehensive estate plan must therefore address liquidity, legal structure, administrative readiness and digital continuity. A valid will is the starting point, not the solution.

• Maré is wealth manager at Netto Invest.