Car insurance is a grudge purchase. So much so that a leading insurer is offering cash incentives to prospective clients, simply to get them on the phone long enough to sign them up. But if you are a careful, reasonably lucky driver, you may pay premiums year after year and never make a claim.
Along comes Penny Wise Pound Foolish Car Insurance (“Penny Wise”). They guarantee the lowest premiums or a free holiday to Disney World. Naturally, you are on the line to their call centre in minutes – and discover to your great joy that you can save R1000,00 a month in premiums! It’s a no brainer. Each month, you admire the teeny premium on your bank statement, and pity those poor suckers still insured by No Corners Cut Car Insurance (“No Corners”).
And then the worst happens. You are in your first-ever car wreck. Thankfully no one is hurt, but your beloved car is a write-off. To replace it would cost R100 000,00. Penny Wise informs you that your excess is R25 000,00, and that your car was insured for a total value of R50 000,00. It’s time to dust the cobwebs off your bicycle. Or prepare to take on a mountain of debt to replace your fully paid-up car.
So what does car insurance have to do with wills?
Legal fees, like insurance, are a grudge purchase. No one gets a bonus at work and enthuses: “It’s finally time to draft the co-habitation agreement of my dreams!” No one writes on their wedding invitation: “Instead of gifts, please consider a donation to our fund to finally sue that dodgy contractor that left us with an uneven, potholed driveway!”
Legal fees, like insurance, are an area where one can be “penny wise and pound foolish”. Especially in the area of wills. Why see a lawyer to prepare your will when your bank is offering to do it for free? Or you can pick up a fill-in-the-gaps version at PNA?
I visited a prominent bank’s website this morning. The website suggests that legal advice is a “nice to have” when drawing your will – only really necessary when you want to put “lots of special conditions” in your will. The website concedes that a will drafted by a lawyer is unlikely to be open to interpretation and so end up in legal disputes. That’s a pretty big advantage, I would say. If you want to put in “lots of special conditions”, the website concedes that professional advice would be worthwhile, and hyperlinks to a terrifyingly pared-down website that promises you a downloadable will for R350,00 in six easy steps (the first of which is “sign up” and the last of which is “print” – so actually four steps).
As an attorney with 16 years’ experience, I charge R1500,00 for a will. On the face of it, a bank customer who uses the web-based service is saving R1150,00. However, a client who sees me for their will gets a lot more than 4 answers plugged into a template:
- There are a wealth of different options available to testators to achieve exactly what they want with their estate. The best option in each case depends on the testator, the size of their estate, the nature of their assets, and even the personalities of their heirs. Is your youngest son terrible with money and in need of a trustee to look after his financial interests? Is your eldest daughter a home owner who would benefit more from a cash bequest than from inheriting a third of your house? Will it mean a lot to Aunt Mildred that she gets Granny’s emerald ring even though you are leaving the rest of your jewellery to your cousins? Come drink a cup of coffee with me and tell me about your family. There is no algorithm for that.
- Lawyers are trained to ask “what if” – and to confront head-on the worst case scenarios that most of us like to avoid thinking about. This is where things can go badly wrong. When I consult with a client for a will, I try to look around all the corners, and provide for every eventuality. You cannot assume that life will unfold as you expect it to, and there is tremendous benefit to being led to apply your mind to the unexpected, and covering all the bases.
- Once we have selected the options that make the best sense for you and your heirs, I will ensure that your wishes are put to paper in unambiguous terms. Your executor will know exactly what you meant. Your heirs will understand what they are getting. The aim is to enable an easy process to wind up your estate, and not leave confusion and conflict in the wake of your passing.
- You don’t have to use your own paper to print my wills. Seriously, I will print it for you (not on R1000 paper, but still.) I will supply a sturdy cover to store the will in. I will help you sign the will in accordance with all legal formalities. You do NOT want to sign a will incorrectly and have it rejected by the Master when your heirs try to wind up your estate. If that happens, your heirs must apply to the High Court to have your will accepted, and your initial saving of R1150,00 from Penny Wise Wills Ltd will fade into insignificance when those fees start rolling in.
- Once your will has been signed, our relationship continues. I will register your will online so that it can be easily located when needed. I will store the original will for you, should you so choose. I will make contact with you each year to ask: how has your life changed since we met, and does your will need to change to keep up with it?
- In my view, banks do not offer free wills to benefit their customers. They offer free wills to snag lucrative executors’ fees when their customers pass away. Should your estate be deemed small potatoes, the bank will drop it like a hot potato and your heirs will need to get the Master to appoint another executor in their place. Should it be sufficiently large, a bank official who probably never met you will wind up the estate and charge the maximum allowable fee (3,5% of asset value) for doing so. I recommend to my clients that they appoint their major heir as the executor, unless there is good reason not to do so. The heir can then approach an attorney of their choice for assistance in winding up the estate. That may be me. It may be their own attorney. Some clients prefer to appoint me as their executor, as they trust me to treat their heirs with care. We have a relationship, and winding up a client’s estate is generally the last service I can offer them. My fees for winding up an estate are negotiable, and unlikely to be the maximum fee unless the estate is very small in value and the work still considerable.
- And the website offering a four-step will for R350,00? Whoever owns it has a great passive income business and may be getting quite rich. I hope they have had a professional draw up their will. Ha.