The new year is finally upon us, and it is important to use this time wisely to evaluate your estate planning, which includes your Wills and Trust affairs, as part of long-term financial planning.
Matlhodi Leteane, Head of Operations, FNB Fiduciary, says that, "We owe it to ourselves and our loved ones to make sure that our estate planning affairs are in order. This will also help you to avoid leaving your family stressed and frustrated about how to manage things going forward. More importantly, change is inevitable, and we all have to plan for it while we still have the opportunity."
According to Leteane, estate planning could be as simple as having a valid Will in place. "This would allow you and your family several benefits, such as being able to appoint heirs of your choice, nominating a guardian for your minor children, and making a provision for a trust to protect any inheritance," she says.
If you already have a Will in place, Leteane also offers useful tips on what you need to consider when reviewing it this holiday season:
Outdated beneficiaries: It is important to update the beneficiaries listed in your Will as relationships with some beneficiaries may have become obsolete or some may have passed on. When one of your beneficiaries passes away before you do, you will need to find a substitute beneficiary. It is also important to make sure that, if you have beneficiaries with special needs, their inheritance needs to be in a specially drafted trust to protect them and keep them eligible for tax preferential treatment from the South African Revenue Services.
Consider the tax implications: it is important to understand and also explain the different taxes to be considered in the execution of your Will and testament to your loved ones. Forgetting to consider minimising the estate tax or life insurance taxes can be a big mistake that might leave your beneficiaries with little or nothing after your estate taxes are paid before anything is distributed according to your wishes.
Get the right advice: It’s good to do things on your own, but at times there are certain things that you will need to get advice and confirmation on, especially with your Will and Estate plan. Consider regular consultation with your bank, advisor, or other estate executors who will ensure that your estate plan and any changes you have are properly drafted.
"Estate planning can be intimidating at times, but with good advice from a qualified and reputable institution, you can avoid unnecessary anxiety," concludes Leteane.