Estate Planning Guide
Find and expert to draw up your will
It is important to get an expert to help you draw up your will and round up your estate. Attorneys, auditors and trust companies that specialise in estate planning should be used.
Banks also help with drawing up a will but you need someone to ensure that your will is honoured when you cannot and that is where the attorneys come in.
They have the skills and knowledge to test whether the instructions on your will can be executed.
You cannot offer a huge amount of money to someone in your family, if you do not have the funds to back it up. These are things that they check before you conclude your will.
Searching for trust companies and good attorneys can be a long process and it must not be rushed in order for you to find someone that you can trust and a company that will follow through without making mistakes.
This is your last chance to ensure that your family is taken care of and that your estate is sorted out in order for everyone to have peace of mind, therefore you need to know that the people you select to use are professional and trustworthy.
Choose executors and trustees with care
These are the people that will finalise everything for you when you are no longer there. You can nominate anyone over eighteen to be your executor but it has got to be someone that you trust completely and they should have knowledge of winding up estates or it could end up being a confusing mess for your family.
The executor should be familiar with the laws that apply to estates, including taxes both estate and capital gains, administration, wills and marital property.
The courts do sometimes refuse an executor if they lack the experience in the winding up of estates, unless they can prove that they are assisted by a reputable administrator.
It is best to select an experienced and recognised company to avoid any complications and they will be remunerated from your estate.
The executor does charge a fee and this can be negotiated at the time that you draw up your will.
The fees that they charge can vary but most executors charge 3.5% of your gross estate assets (excluding beneficiary policies and pension.)
6% of the gross income of the estate assets collected after your death until your estate has been finalised.
Vat or tax can only be charged if the executor is a registered company.
Appointing a trustee is crucial and they are there to manage and administer your trust. Trustees invest trust funds and pay your beneficiaries. They can also ensure that anyone else that you have appointed will follow through and execute their duties, ensuring that your beneficiaries receive what you have stated they should.
Who has helped you plan and draw up a will?
Update your policy beneficiaries
This is extremely important to do but you need to ensure that you have the correct people named as your beneficiaries in your policies and pensions.
You cannot name a girlfriend or boyfriend as a policy holder if you eventually leave that person to marry someone else as they will still be the beneficiary, unless you change it.
Naming your beneficiaries should be well thought out, planned and updated. The name of the beneficiary cannot change after you are gone, irrespective of the provisions in your will. The same applies should you get divorced. (
Beneficiaries
| Trustees
| Executors
|
|---|---|---|
People you would like to name on policies and pensions
| A person or company that holds or administers property and assets for a third party
| The protector of your estate
|
Your children
| They must know the law and should be neutral
| Should be someone trustworthy
|
Spouse
| It should be someone that is able to use their judgment in order to delegate duties
| Should be honest and diligent
|
Parents
| A person that can avoid conflict of interest
| They are there to manage your estate until the final taxes etc are paid
|
Close friend should you wish
|
Excuses for not planning a will
You do not own a property
You have more debt than assets
You are invincible and will not need one
Your family will know what to do
You are alone and don't have anyone to leave a will to
You cannot afford it
Not sure how to draw up a will
Ensure that everyone is aware of your will and estate plans
You do not have to tell your entire family about your will and you don't have to go through who gets what at the dinner table but it is important for your executor to know where you would keep your important documents and you should probably give them a list of them too.
In that way, when you are gone they will know where to look or whom to go to in order to carry out your plans and finalise your estate.
A good idea is to inform your next of kin about the provisions of the will to prevent potential family issues and strife, as well as facilitating the winding up of your estate.
Inheritance is a privilege and not a right and when drawing up a will you should keep that in mind. It does help for your family to know the contents of your will so that if they do have the opportunity for their inheritance to be left in a trust rather than be left to them personally.
These are things that can be discussed later on and you could leave an option for a family member to decide what they would like to do with the inheritance.
Provisions for your children in your will
If you die without having made a will then your estate will be administered by the Intestate Succession Act.
The act determines who is entitled to inherit and requires that minor children's inheritance be placed into a guardian's fund.
Minors can be provided for by a trust but it is only as effective as the trust deed, which is the document that sets out the provisions of the trust.
Make arrangements with guardians and trustees about how your minor children should be taken care of in the event of your death. It is also your duty to ensure that there are funds and enough assets to provide for your children as this is not the duty of the guardian.
It is of the utmost importance to have a legal guardian appointed to protect your minor children.
Estate planning checklist
- Talk to family members about how you would like to handle your will and let them know if you are going to appoint someone to do so.
Ensure that you make provisions for a time where you could become incapacitated so that they know what medical care you wish to receive, to avoid family stress.
- Draw up a list of your assets including property, financial accounts, policies and personal belongings.
- List your beneficiaries which include charities, schools and organisations that are meaningful to you, should you wish to add them to your beneficiary list.
With doing this you need to understand who it is that you are listing.
- Plan for pets and minor children; should something happen to you, you need to know that they will be taken care of.
- Make a list of passwords and account numbers and place them in a safe place along with all your other documents in case a family member should need them when you are gone.
- Appoint someone to be in charge of your will, medical arrangements and someone to ensure that your will is executed. You can select anyone that you think is capable enough with knowledge on these matters.
- Find and consult with an attorney who will advise you on the best way to arrange and manage your estate as well as to give the person that you put in charge fewer complications.
