FREQUENTLY ASKED QUESTIONS
Your heirs receive more should the estate duty need to be paid and you have chosen a generosity of less than 100.
Your heirs never receive less and only the correct tax is paid.
How do heirs receive the benefit?
If your estate (net assets before estate duty) is R10m with your traditional will your heirs receive R8.7m.
Add a YFC Codicil and a generosity of "1" your heirs receive R8 914 500, R214 500 extra.
Why does the YFC Codicil lead to more for heirs?
In your will you give money and/or items to heirs but you must leave some for tax and for charity you chose. What you leave is referred to as the "residue".
The judgement in SARS vs Executor Estate/Late W E Frith held that such a "residue" is a deduction in the tax calculation.
The formula in YFC Codicil works out what heirs would receive from the traditional way and increases this based on your generosity to leave sufficient in the residue to pay the correct tax and a portion to the charity of your choice.
NB Your heirs never get less than what they would have from the traditional will only more based on how generous you are to the charity. Tax is always first paid from the "residue" leaving the remainder for the charity.
Must I name a charity?
Yes. To qualify for the deduction the residue must be left to the charity.
Can I exclude the clause giving 5% benefit to YFC Codicil?
Yes you can but the fee for the YFC Codicil would be R30 000 on set up. The 5% on an estate of R10m estate would only be R10 750 at the date of death. on a R30m estate the benefit to heirs would be R874 500 and the 5% would be R43 725 payable at the date of death.
What is The Charity Donation and 'Generosity'?
YFC Codicil requires testator to choose a generosity factor from '1' to '100'. Choosing a generosity of '100' means the testator wishes to leave all the benefit from YFC Codicil for the charity.
How will the Executor's task change?
When the executor has determined the net assets and deemed assets of the estate, identified rates, allowances, deductions and disallowable expenses he inserts this information into the YFC Codicil enabling the determination of the total value of specific bequests. The residue is determined by deducting the total value of specific bequests from the net asset value of the estate. The residue to a recognised charity is deductible in terms of the Bloemfontein Appeal Court judgement in determining the taxable amount. The estate duty is first paid from the residue leaving the remainder of the residue to be paid to the charity.
Can I change my will with a YFC Codicil?
You can change your will at any time but when you do so you must reprint your YFC Codicil with the date of your revised will. Immediately you sign the new will the old YFC Codicil is null and void. Reprint your YFC Codicil using the YFC Codicil App on Microsoft Word changing the date to the date of your new will and repeat the witness signing process. If you have the YFC Codicil App you can also change the charity and the generosity factor.
Can I assist others with a YFC Codicil?
Yes, if you have the individuals full name & ID number you can obtain the YFC Codicil App on Microsoft Word for them and insert the last will date, charity the testator choses together with their generosity factor. Extremely useful for those you know who would not be made aware of this opportunity to give extra to heirs and a charity.