What you should know about Estate Planning
After your death, you need to make sure that your loved ones are taken care of by planning your estate, drafting documents, and putting processes in place is the first step.
No matter how modest, everything you own is considered part of your estate (with some exclusions).
Evaluating what you own is the first step in understanding how best to protect it.
When planning your estate, you are mindfully organizing your finances and assets in a way that will ensure estate duties are minimised, that there is adequate liquidity to meet your estate obligations upon your death and most important that any inheritances are appropriately distributed or protected for your children.
Estate planning can be daunting, but here are a few things to consider that can assist and help you better understand the process.
An Estate Plan Protects Beneficiaries:
Nowadays all families need to plan for when something happens to the breadwinner of the household. After all, you do not have to be wealthy to have investments or real estate, both of which produce assets that you will want to pass on to your beneficiaries.
The main aspect of estate planning is designating beneficiaries for your assets. Without an estate plan, the courts will often decide who gets your assets, a process that can take years, stack up fees, and turn into a nightmare.
If you die without a will, which is a vital part of an estate plan, the courts will decide who gets your assets.
An Estate Plan Protects Young Children:
None of us are prepared for an accidental or untimely death, but if you are the parent of small children, you need to prepare for the unthinkable. This is where the will portion of an estate plan comes in.
To ensure that your children are cared for, you will want to name their guardian/s if both parents die before your children come of age. Without a will that names these guardians, the courts will step in to decide who will get custody of your children.
An Estate Plan assists Beneficiaries with Tax:
Estate planning is about protecting your loved ones, which means in part giving them assistance with Tax burdens. Transferring assets to beneficiaries could come with Tax obligations and a proper estate plan will help reduce the amount of Tax that will be payable to SARS.
A good estate plan can help you reduce certain taxes applicable when transferring assets to beneficiaries. This will include transfer costs, inheritance tax, Estate duty tax, income, and dividend tax.
An Estate Plan Eliminates Family Messes:
We have all heard the terrible stories when someone in the family with money or assets dies and the war between siblings or members of the family begins. Such arguments can get ugly and even end up in court, with family members set up against one another.
Avoiding family feuds before they start is a great reason why an estate plan is necessary. This will enable you to decide who controls the finances and assets if you become mentally ill or after you die. This will go a long way toward avoiding any conflict, ensuring that your last wishes are carried out correctly.
Take the time to decide whether to divide your estate equally, and of course, if you’ve had more than one spouse or have children from more than one family an estate plan is essential.
In short:
If you want your loved ones protected when you can no longer do it, you will need an estate plan, without one your beneficiaries could face big tax burdens and the courts could designate how your assets are divided and even who gets to raise your children.
Should you need assistance with planning your estate please do not hesitate to contact any of our estate planning consultants:
Jacques Horn: legacy1@curemed.co.za or 012 472 7014
Stefan Scheepers: legacy2@curemed.co.za or 012 472 7016
Quinlann Henning: quinlannh@curemed.co.za or 073 302 8345
