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Estate planning, simply put, is the process of arranging and managing your assets during your lifetime so that when you die, your estate is transferred in accordance with your wishes. Effective estate planning can ensure that estate duty, taxes and other costs associated with death are minimised as far as possible, and it can make extending your legacy to multiple generations easier. Estate planning is also aimed at protecting the beneficiaries of your estate, particularly where there are special needs involved.
Estate planning entails the legacy you would like to leave through your will, as well as giving consideration to the establishment of trusts and the needs of your beneficiaries, be they majors or of minor age. The estate planning process generally starts with the drafting of your will.
A will is a document which determines the distribution of your estate. Everyone over the age of 16 may draft a will and it’s important to keep your will up-to-date, particularly following a life stage change. These life stage events include occasions such as a change in your marital status, the birth or death of an heir such as the birth of a child or grandchild. Additionally, this can be an increase or decrease in your asset base such as the purchase of a new home, or your changing jobs, or reaching retirement age.
Everyone should have a will, irrespective of your asset value, as it allows you to leave a legacy in line with your wishes. You work a lifetime to build up an asset base which carries specific meaning and sentiment. A will allows you to determine who will benefit from it and in what proportion. It avoids your asset base being passed down in terms of the Law of Intestate Succession (dying without a will in place) and allows your investments to be placed with an investment house for minor beneficiaries to maximise capital growth, rather than monies being placed in the Guardian’s Fund. Having a will in place generally reduces the timeframe attached to the estate administration process and makes it easier.
We encourage people to try and keep their wishes simple rather than “ruling from the grave”. Specific inheritances, your marital status, maintenance or divorce obligations, age of beneficiaries, donations and business succession planning are some of the areas for consideration. In addition, you need to be mindful of the costs associated with death. Some costs include the following:
The administration of an estate is often a complicated matter. The executor plays an important role in ensuring that the estate is transferred in accordance with your wishes and that the administration process is undertaken in line with the Estate Act, 66 of 1965 (as amended). The process needs to be handled with empathy, efficiency and professionalism and in the shortest possible time.
You may appoint an executor of your choice. However, this appointment needs to be ratified by the Master of the High Court at death. The Master needs to be comfortable that the appointed executor has the necessary skills and knowledge to administer your estate. The executor needs to be able to attend to the legal, accounting and related aspects of the administration process.
There are risks attached to the administration process and the executor carries the accountability for this process, acting as your representative in ensuring your estate is distributed in accordance with your wishes, while also acting legally and in good faith.
The estate administration process entails the following four stages:
Our services are offered nationally and are competitively priced and we have the necessary continuity in place to ensure that processes are not disrupted.