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Useful estate planning tips

Ensure your estate is would up quickly, with as little burden on your loved ones as possible.

There is a lot more to estate planning than drafting a will and calculating estate duty. To minimise the burden on your loved ones and to expedite the winding up of your estate, here are some considerations and tips that will benefit those who are left behind:

  1. Simultaneous death: Most wills make provision for what will happen in the event of you and your spouse’s simultaneous death, although this is an eventuality that is not often considered. Make sure that someone other than your spouse or partner knows where your will (or wills) are kept.
  2. Digital will: Most of us have a significant online presence in the form of bank and retail accounts, social media accounts, subscriptions, charities, utility services and work-related sites. Preparing what is termed a ‘digital will’ can greatly assist your loved ones in closing down your social media accounts, cancelling online subscriptions, notifying service providers of your death and managing your finances. The best format for a digital will is to prepare document listing all your online accounts and services, together with your usernames and passwords for each site. At the same time, make a note of other important information such as codes to the safe/gun safe, combination locks, alarm codes and PIN numbers.
  3. Beneficiary nomination: Ask your financial adviser to double-check the beneficiary nominations on any life assurance policies you have in place. One of the benefits of a life policy is that it is possible to nominate a beneficiary. This means that should you die, the policy will be paid out relatively quickly to your named beneficiary. Bear in mind that if you list ‘estate’ as your nominated beneficiary, the proceeds may be subject to the winding up process which could take up to nine months – sometimes even longer in complex cases.
  4. Overseas family: If you have beneficiaries in your will who reside overseas, we recommend that you keep certified copies of their identity documents at hand. In the event of your death, waiting for copies of their identification from abroad can delay the winding up of your estate unnecessarily.
  5. Overseas assets: Although it is legally possible to draft one will to deal with worldwide assets, it is always best to seek advice to determine whether you require an offshore will. Depending on the nature and location of your foreign assets, you may be exposed to foreign tax, and a second will may be necessary. It is also important to make sure that each will stipulates that it deals only with the assets of the country in which it was drafted.
  6. Organ donation: Bearing in mind that it can take up to a week before your will is read, it is advisable not to include your wish to be an organ donor in your will. Ensure that your loved ones know you are a registered organ donor and keep a copy of our organ donation card on file.
  7. Pets: If you are single or widowed, it is important to make plans for your pets in the event of your passing. Although these instructions can be included in your will, it is advisable to rather make arrangements directly with the person nominated to look after your animals. If there is a delay between your passing and the reading of your will, your pets may be suffer in the absence of any clear instructions.
  8. Liquidity: In the event of your death, your bank accounts will be frozen. Even a well-organised estate can take up to nine months to wind up. If your spouse depends on you for an income, it is important to ensure that he/she will have access to funds while your estate is being wound up.
  9. Incapacity: It is important to make plans for the possibility that you may suddenly become mentally incapacitated. A general power of attorney is not valid in instances where the principal has no mental capacity and would therefore be of no use. Ensure that adequate preparations are made by discussing curatorship and administration options with your financial adviser.
  10. Ethical will: Although not a legal document, an ethical will is a wonderful way to communicate your values, experiences and life lessons with your family. Unlike a legal will, an ethical will is a voluntarily prepared document that is designed to pass on things such as guiding principles, memories, spiritual values and wishes for your family’s future. It can also be used to communicate your personal story, and to share your thoughts and memories.
  11. Retirement funds: It is important to remember that, although you may have nominated beneficiaries on your retirement fund, it is the trustees of your fund who are responsible for determining who your dependants are and who will receive the benefits. This can be a time-consuming process, especially in circumstances of blended families and where there are minor children from more than one relationship.
  12. Copies of documents: One of the executor’s first functions will be to gather all the necessary documents relating to your estate including ID and passport, birth and marriage certificates, divorce orders, maintenance agreements, trust deeds, tax numbers, firearm licenses and so on. To expedite the winding up of your estate, keep a folder of these essential documents including a couple of certified copies of each.
  13. Personal belongings: Some of the biggest family feuds take place over the personal belongings of the deceased. To avoid confusion as your specific intentions, our advice is firstly to talk to your loved ones about your wishes while you are still live. Alternatively, you can make a list of your personal belongings (for example, items of jewellery, artwork, stamps or other collectables) and indicate who you would like to leave these to, all of which can be included in a letter of wishes.
  14. Charities: There may be specific items, such as a book collection, tools or sewing material, that you would like to be given to a charity of your choice, all of which can be included in your letter of wishes.
  15. Safe-keeping of your will: Be cautious of keeping your will with the bank. In the event of your passing, your bank accounts and credit cards will be frozen, and the bank may refuse to release your will without the executor’s permission which can cause administrative problems and unnecessary delays.

ADVISOR PROFILE

Craig Torr

Crue Invest (Pty) Ltd

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