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Estate Planning
Estate planning is essentially about legacy planning and making provisions for the financial welfare of loved ones after the unfortunate event of your death – or after the passing away of the breadwinner. It has two main focuses; fitst being the drafting a last will and testament, which gives a comprehensive plan and directive on how the distrubition of your assets will be aportioned amongs your surviviing beneficiaries. It remains a very crucial legacy planning duty and your obligation to safeguard your loved ones from experiencing the inconvenience, suffering and pain that comes with the costs of death.
Whereever there’s no will in – there’s trouble – you owe it to yourself and loved ones to ensure that you have a plan in place that will not only protect them from death related costs, but also provide for an amicable distribution of your assets in the event of your passing.
Rearch insights indicate that;
- 70%+ of South Africans die without a valid will in place, and another 90% not even planning for the unexpted costs associated with a dying.
- Its a reality that life can be very unpredictable. Nevertheless, your will remains the most important piece of paper you will ever sign torwards taking the responsibility and power in your hands to fdecide what happens with your assets adter your demise – it allows you to decide who gets to inherit from your instate in the event of your passing.
It therefore remains evident that estate planning should be considered an the onset of the Home Buying Process for the mere fact that purchasing a home means acquiring property – which may eventually need to passed over to your loved ones in the event of your death – it also form an integral part of your family’s Wealth Creation Process.
Wealth creation in it’s own includes acquisition of assets – and this process is often referred to as Legacy Building. Legacy must be protected for future generations and to ensure financial provison for loved ones.
Legacy protection invloves (1) Will Drafting: the power to decide who gets to inherit from your assets after your death and (2) Legacy Protection Plan: it is an insurance cover that takes care of all costs associated with dying (estate duty, master office costs, conveyancing attorney costs etc).
Key Componets Involved and considerations to makein in your family's Legacy Building Process.
- Estate Planning: Is a comprehensive legacy planning process, wich is a two-fold focus – that includes will drafting: this document offers you the freedom and priviledge to choose before hand how your estate (assets) will be distributed amongst your loved oned in the event of your death. Legacy Protection: includes a making financial provisions to cover all estate related costs – commonly know as the costs of dying. Unwiding of an estate is a very costly process that involves the appointment of an executor, making use of services of attorneys and depending of the value of the estate – may include paying of estate tax (Estate Duty). These costs can easily run into the 100s of thousands and must be paid upfront in order for the process to run smoothly without any unnecessary dealays and hiccups.
- Family Protection: Whether you are married or single – especially if you have children or those depenedent on you for their financial welbeing. It is very critical to have some financial provisions that will ensure a smooth continuance of life for those left behind, it may include taking care of children’s continued educational requirements. Legacy planning also includes a component that makes for such financial requirements to protect the future of your loved ones. This will signficantly help to protect them against any unforseen legal hassles and/or financial burdens that may be brought about by your unforseen event of your death as the breadwinner.
- Estate Cost: It is equally important to note that your estate will be subject to various costs, as indicated, these costs may include Estate Duty – which is estate tax payable to SARS: South African Receiver of Revenue Services, Executor Fees, Attorney Fees .to effect any property transfers that may need to be effected in the process of the unwinding of your etate. The estate needs to ensure that it has sufficient liquidity to cover all these indicated estate costs of dying – as the adverse may bring about undue incovenience or disadvantage to the beneficiaries including leading to selling off of assets to cover the costs – this may mean selling off the family home or leaving very little for distribution to your beneficiaries.
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It therfor can’t be emphasized emough the importance of estate planning and how it links to the process of hone buying and the need to ensure that home buyers do not underestimate the importance of having a valid will.
Also that a will is not the only component to be considered in the Estate Planning Process. It simply constitues only one elements of many factors to consider – these may include Capital Gains Tax, Marriage Regimes that may affect the devolving process and distribution of your estate, Estate Tax that may be due to SARS, cost attributed to the process of Master of the High Court (advertising) and appointment of the Executor and associated fees for management of entire process of unwinding your estate.
Important: With all these various factors to consider, quite critical and key a is the availability of sufficient funds Estate Liquidity in order to be able to settle all its debts without the need to sell of assets and therefore further disadvantaging its beneficiaries.
