Planning your Will and Estate
This is a topic that is of interest to many, however for most people, there are many uncertain or unanswered questions regarding the subject. Passing from this world is inevitable, and you must plan accordingly for when you do. When you engage in an estate planning exercise and sign a properly drafted will, you will ensure your assets are distributed the way you want, and your family and loved ones are provided for.In this brief article, we will attempt to introduce the subject of Estate planning and some questions we assume you might have.
Estate planning is the process of structuring one’s assets during one’s lifetime to ensure that they are preserved and legally protected and that, in the event of death, those assets are transferred expediently and intentionally to successive generations. Most experienced lawyers and law firms consider structuring of the assets in the most tax efficient way in order to ensure protection and preservation of assets from one generation to the next; It includes the drafting or reviewing of your will. It’s a serious exercise that everyone with assets should undertake although, sadly, many people fail to do so.
Common questions associated with the topic are;
- what happens if i die without a will
- what should be included in a will
- how much it cost to draft a will
- what are the factors to consider when drafting a will
- How does marriage and marriage plans affect estate planning
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“if you don’t plan then you’ll definitely fail.”
What happens if I die without a will?
If you die without a will, your estate will be distributed in terms of the provisions of the Intestate Succession Act .
Factors that should be taken into account include:
- Ensuring that the structuring of assets in the estate and the will are synchronised to make the execution of your wishes feasible;
- Providing for minor children;
- Providing for children or other family members with special needs;
- Providing for sufficient liquidity in the estate after death. More than 30% of deceased estates in South Africa does not have sufficient cash available for all debts, costs, cash bequests, taxes, etc;
- Taxes payable during life and at death, including income tax, capital gains tax, and estate duty;
- The nomination of an Executor and ensuring that the Executor is granted the powers necessary to fulfill the role properly;
- Business succession planning.
Your marriage contract affects your estate plan
Your estate plan cannot be accurately drafted without taking into account the nature of your matrimonial property regime. This is because your marriage contract sets out the financial consequences of your union and has a direct bearing on your ability to testate. Further, our law provides spouses with certain mechanisms to help reduce estate costs and taxes, so it’s important to understand how these can be used effectively in your estate plan. For example, if you are married in community of property, you will need to keep in mind that only 50% of the joint estate is yours to bequeath and that bequeathing any assets in the joint estate to a third party could create complexities for your spouse in the event of your death. If you are married with the accrual system, it is important to bear in mind that your surviving spouse may have an accrual claim against your estate should her estate be smaller than yours which, in turn, can affect how you structure your estate plan.
How much does drafting a will cost in South Africa?
Here’s a closer look at what can affect the cost of drafting a will, by understanding these factors, individuals can better anticipate the potential costs involved in drafting a will and make informed decisions about how to proceed based on their personal and financial circumstances:
- Simplicity vs. Complexity: A straightforward will that simply divides assets among a few beneficiaries will generally be less expensive than a complex will that includes trusts, multiple beneficiaries under different conditions, and overseas assets.
- Professional Fees: Fees vary among legal professionals. Some might charge a flat rate, while others charge based on the time spent.
- Promotions or Free Services: Many legal firms and banks offer free will-drafting services as part of promotions or as a benefit if you use their other services. Additionally, during National Wills Week, many South African attorneys draft wills for free.
- Additional Consultations and Revisions: Additional costs may incur if multiple consultations or significant revisions are needed.
At Seane Mokhele Attorneys, we have affordable plans that take into consideration your affordability.
Cynthia Fowler
How many times can i amend my will?