Death, being the morbid topic that it is, is not openly discussed often enough. (AP Photo/Gregorio Borgia)
Death, being the morbid topic that it is, is not openly discussed often enough. (AP Photo/Gregorio Borgia)

The Will to take dignity and security beyond death

By STAFF WRITER Time of article published Dec 6, 2018

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Death, being the morbid topic that it is, is not openly discussed often enough. 

The reality is that we will all die eventually, and sometimes we forget that the surviving members of our family will need to face life without us. Ensuring your family is provided for financially is the responsible thing to do, and the earlier you start planning for that, the better. You’ve worked hard to acquire assets for your family, so you are bound to have some firm ideas on how they should be distributed after your death.

This is why estate planning is vital. Estate planning gives you an overview of your assets and helps you to establish the best way to divide your assets. Apart from ensuring your assets will be distributed to your beneficiaries according to your wishes, proper estate planning will minimise the taxes and duties payable at death, and allocate sufficient liquidity (cash) in the deceased estate to settle outstanding liabilities.

You either die testate or intestate. If there is no will in place (intestate), then your assets are divided according to the Intestate Succession Act, 1987. The danger with dying intestate is that your wishes may not be taken into account and your assets may not be inherited by the people you would prefer to be your inheritors.

So a valid will is vital in ensuring that estate planning is effective.

Starting with advice is key: estate planning should be part of holistic financial planning. When drafting a will it is important to have knowledge of the provisions of the Wills Act 7 of 1953, Maintenance of Survi ving Spouses Act, Matrimonial Property Act 88 of 1984 and the Subdivision of Agricultural Land Act 70 of 1970. Check with your adviser that they have access to legal support to ensure your will is legally compliant. You don’t want your family to face challenges to its legitimacy after your death.


Appoint a suitable executor

An executor administers the deceased’s estate. This includes settling all liabilities and ensuring that the remaining assets are distributed according to the wishes of the deceased, as outlined in the Will. It’s a complex task and requires specialised knowledge. Ideally, the person you appoint as your executor should be competent, impartial and possess the necessary skills, knowledge and expertise to wind up an estate properly.

Remember to account for the costs

How your assets are distributed (your bequests) determines your estate’s tax liabilities. Various taxes and fees must be paid from the estate, including estate duty tax, capital gains tax, administration costs, and executors fees. Proper estate planning will ensure there is sufficient liquidity (cash) in the estate to cater for all the costs that may arise.

Consider your family’s immediate needs

If there is insufficient liquidity in the estate, the executor may be forced to sell some of the assets to create the liquidity required. This could have a negative impact on the beneficiaries. One of the most effective ways to create liquidity is to take out life insurance that will cover a cash deficit.

Your life savings may not be enough to replace the income your family may lose in the event of your death. Think about how the loss of your income will affect your family. Not only may your spouse need the financial support, but other expenses such as children’s school fees and university savings may also be affected. Having adequate life cover in place that can provide for your family is therefore critical.

Firstly, you need funeral cover as a short-term solution to cover immediate costs for a funeral. Then it is also crucial to make sure that the lump sum provided by your life policy is adequate to settle possible debts and financially support your family. Lastly, you can leave instructions for your financial planner to assist your family in reinvesting the money paid out by your insurance claim, in order to provide a life-long income for your spouse or other dependents.

When life changes, update your planning

Update your will on a regular basis so that it reflects major lifestyle changes. You need to review your Will at least once a year or whenever your financial circumstances change. Changes such as marriage, divorce, new additions to the family or death usually require an update of your Will, to ensure that the necessary alterations are made to make provision for those changed circumstances.

Keep a record

List all your assets - investments, policies, shares, bank accounts etc. with your policy numbers, account numbers or investor numbers together with the company name, in one document and keep it up to date. Also make sure you are aware of what cover/benefits you have at work. This information should be readily available to the executor of your estate. Ensure that your family members know where to find the most recent copy of your will as well as where all the paperwork relating to your assets are kept, in the event of your death. Get the right advice

A properly structured estate plan will ensure that your estate has a tax-efficient structure that will benefit you during your lifetime - and your beneficiaries after your death.

The time is now to secure your family’s future.


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