Up to 70% of South Africans who die each year, die without a Will in place – creating enormous stress on those who have to settle and manage the Estates. For entrepreneurs who have invested blood, sweat and tears to get their businesses off the group, this is not a place they want to see their asset depreciate or be destroyed because an Estate sits in limbo.  

If you as an entrepreneur accept that dying without a Will in place is a terrible financial planning decision, here are a couple of suggestions for preparing your Will if your business forms a major part of your Estate: 

1. 1. Beware when bequeathing a shareholding in their business - depending on the business structure (company, partnership etc) there might be pre-determined arrangements in the Memorandum of Incorporation (MOI) of the business which will determine where shares go. You always need to keep in mind that the business is a separate legal entity to the shareholder.
   
   
2. 2. It doesn’t make practical or strategic sense for your aunt who’s a home maker in Mahikeng to inherit your shares in your telecom sales company which operates in Cape Town. There is significant data which shows that very few family businesses survive beyond the second generation as the wrong people end up running the business, without having the experience or business acumen to do so.
    
3. 3. However, the value of those shares accrue to you as an individual shareholder and when you pass on, proper arrangements need to be in place for how your Estate will be getting the value of your shares. Some businesses will have sufficient cash flow to pay out the share value, some will have to take out insurance policies in the event a shareholder passes on and their estate needs to be remunerated. When you are preparing your Will and doing your Estate Planning, cashflow is going to be an important consideration.
   
   
4. 4. The appointment of an executor is one of the most critical elements of your Will. Yet many people don’t give this careful thought and often appoint close friends or family members to the role. This is a risky practice, primarily because personal relationships change over time and that person may not be the most suitable when the time comes. At Quickwill, we believe best practice is to assign the role to a professional executor or someone with extensive legal or financial experience (and who is somewhat removed from the family) and then assign this person the right of assumption. This route gives the executor the right to appoint an experienced lawyer, who can negotiate a fair and efficient outcome for the heirs fee for the administration of the estate.  

2. 5. If your business operates in multiple countries, then you need to also remember that this has a material impact on your Estate. To avoid any lengthy delays, rather look to craft a separate Will for assets that are located abroad – keeping in mind that, unless you have made adequate provision, an executor cannot administer an estate and handle assets in a different country until your estate is settled in South Africa. If you have a separately signed Will for each country, then the process of executing each Will can take place simultaneously (thus eliminating any unnecessary delays).  

While it is never pleasant to think about death, the reality is that you spend your life building an asset base – the last thing you want is your hours of toil to go to waste. The Estate process in South Africa is a challenging road and as we apply technology to improve Access to Justice, financial planning for entrepreneurs becomes easier! 

Stella Pickard is the founder of QuickWill - a South African financial and legal technology business which aims to improve access to Justice for ordinary South Africans. The technology allows you to draft your Will online, appoint an Executor and lodge it for safe-keeping. For more information, please visit www.quickwill.co.za