I used to be an avid follower of the Wizard of Id. This offbeat comic strip, set in the Middle Ages, appeared in the Sunday Paper. One particular strip bears relevance to this topic. A peasant woman, cradling her cat, approaches the overlord’s official. She says to him; ‘I want to leave my fortune to my cat’. He questions her, saying what you own is not a fortune. Her answer: ‘it is to a cat’.
Real fortunes bequeathed to animals:
- Michael Jackson left $2 million to his pet chimp, Bubbles.
- The widow of Star Trek creator Gene set up a $4 million trust for their dogs, plus an additional $1 million for a domestic employee to care for them.
- Gail Posner bequeathed $11 million for the care of her pet dogs – $3 million in trust funds and her $8 million mansion to her three dogs, who presently ride to the pet spa each week in a gold Escalade.
- The billionaire TV bastion Oprah Winfrey has let it be known that she has set aside around $30 million in a trust for the care of her five dogs, should the unfortunate happen to her.
Times might have changed – I now read the newspaper online. What you consider your fortune to be and whom you want to leave it to is a very personal choice. Wanting your final wishes respected and protected is a universal desire as old as time.
Not everyone may agree with your choices
A lawsuit filed by Posner’s estranged son alleged that her house staff unduly influenced her when she bestowed her millions to her Fido, Fang, Fluffy and Frisky and Foofoo (Names of all dogs changed to protect their identity). Lending the lawsuit merit is the $27 million the staff also received after her death in 2010.
This does not mean you have to go it alone
I have been active in the Financial Services sector since 1987. Wills are more complicated than you might think…or hope. I know being reminded of your mortality is not fun. I have some bad news: you should think about it at least once a year.
There are responsibilities, rules, and ethics to consider
- Responsibilities: You may adore your pets but dislike your children and other dependents. However, if they are legally your dependents you are obligated to care for them, even if you are not around anymore.
- Rules: Before you go off making promises to your nearest and dearest, remember you can only bequeath what is actually available – debt, taxes and death duties will first have to be paid from your estate.
- Who is your executor: As a CFP® I refuse to be an executor of any client’s Will. I believe that could place me in a Conflict of Interest position. The person who draws up the Will may set it up in such a way that it can benefit them. Supposing you want somebody to inherit a million Rands. Through your Will, you could choose to give it to them I cash, or you can request that a new investment product is bought. The latter can lead to the executor earning extra income through commission. Unscrupulous executors may unfairly try to influence you to go that route.
- Efficiency: This is probably one of my biggest gripes with many of the Trust Divisions of large assurers. At any time, they may be working on 20 or 30 000 estates that need to be processed. The bureaucratic mess means that the beneficiaries have great difficulties getting information or even speaking to a human when they feel aggrieved.
- Cut ‘n Paste jobs: Many Banks have instant Wills for their smaller Estates. Their staff often lacks proper training to spot mistakes and, since it is done by cutting and pasting information into a per forma template, things can go terribly wrong.
At Northwood, our process is as follows:
As we get to know our clients, we keep their Assets and Liabilities register current. A case was brought to our attention. The testator had died, the Estate had been settled and closed off when somebody remembered that he owned a farm. This did not appear in his Asset register and the Executor had not picked this up. The Estate had to be reopened and the necessary and death duties had to be paid.
After a lengthy discussion with the clients, we provide them with a summary, which they can use to brief the proposed executor to draw up their Will. Once the Will is drafted, they can bring it back to us so that we can read it and make sure that there are no errors. We take the time to explain the contents to the client, and should they be happy, the document can then be signed.
We review the process annually. Every year we complete an estate liquidity analysis and discuss with the testator/testatrix what will happen should either pass away.
Oh, the troubles I have seen…
- It can take a long time to wrap up an Estate
Generally, it takes between 6 months to 18 months to successfully execute a Will. Sometimes, like in the Posner case mentioned above, Wills are contested. The battleground will shift to the courts and can take years and lots of resources to finalise.
- Not everyone involved will play nicely
Three years ago, a professor of one of the Universities died. The large Insurer, who was appointed as executor, sat on the Will, allowed two years to pass by before they were able to allocate someone to execute the Will. When challenged, they blamed the Master of the High Court, COVID-19, and their inability to replace staff who had resigned.
Initially, the beneficiaries did not know their rights or what to do when faced with the complete abandonment by the Master of the High Court Officials as well as the Executors. Once they had all the information they needed, they rightly threw their toys! We were then able to resolve the issue in a matter of months.
- Tomorrow may never come
While reading a Will recently, I noticed that the last born, now 15 years old, was still not provided for in his parent’s Last Wishes. Imagine for a moment that the unthinkable happened before this was resolved.
Not only will this have resulted in legal, financial and administrative consequences that could have been avoided, how do you think how this would compound the child’s grief if she had to find out she was not included? No amount of explanation would undo that heartache.
Read and review your Will regularly!