Ten Goals of Estate Planning

Your affairs need to be arranged, managed, and protected so that you, your family and other beneficiaries may enjoy the maximum benefit from your estate both during your lifetime and after your death.

Goals of estate planning include:

  • Achieving efficient deceased estate administration.

When planning an estate, the goal is to ensure that the winding up of an estate takes place as efficiently and effectively as possible.

  • Appointing heirs or legatees of choice and distributing assets as the estate planner wishes.

When there is no Last Will and Testament, the estate will be dealt with in accordance with the Intestate Succession Act. The estate planner’s assets may accordingly be dealt with in a manner that was not according to his intentions. A Last Will and Testament will indicate the estate planner’s wishes and ensure that his assets are transferred to heirs of his choice. 

  • Providing liquidity.

Ongoing planning for the liquidity needs of an estate is essential for estate planning. Should an estate not be liquid at death, the deceased’s family members and dependents may suffer as they may have to provide the cash themselves or agree to the sale of an asset to generate the cash needed.

Planning for liquidity means ensuring that there are sufficient cash funds available for Estate Duty; to settle liabilities and administration costs; and to provide for other taxation liabilities that may arise at death, such as capital gains tax. Furthermore, until the Master of the High Court has issued the Letters of Executorship, authorising the Executor to act on behalf of the estate, the estate assets will be frozen. The estate planner needs to build this contingency into his plan to ensure that his family have cash funds immediately available.

  • Providing for dependents and protecting minor beneficiaries.

An estate should essentially provide for dependents during the estate planner’s lifetime and after death as well as provide for the protection of minor beneficiaries, including custody or guardianship, and to prevent any bequest to a minor being held by the Guardian’s Fund until he or she reaches majority. 

  • Minimising the impact of taxation on an estate.

Suitable planning could help minimise the impact of tax on an estate, including estate duty, income tax, capital gains tax and transfer duty.

  • Taking account of offshore assets.

The estate planner may hold assets offshore. When planning his estate, the estate planner needs to take account of these assets.

  • Deciding on whether to execute a Living Will.

The purpose of a living will is to guide the family and doctors when you are in a medical state from which you cannot recover, and due to your condition, are no longer able to make your own medical decisions.

  • Minimising costs.

To ensure that the costs do not outweigh the benefits when implementing the estate plan, the estate planner, together with our estate planning team, will carry out an exercise of weighing the costs against the benefits of implementing the proposed plan, considering professional fees, transfer duty, estate duty, donations tax and capital gains tax implications.

  • Ensuring that the plan is both practical, legal and efficient. 

An estate planner needs to align his goals with his practicalities of implementing strategies to achieve those goals.

  • Providing for flexibility.

Any changes and amendments to the plan should be implemented at minimal costs and inconvenience to the estate planner.

It is important to start with your estate planning process now, so that you can ensure your family will be provided for during your lifetime and after your death.

Contact our Estates Department for all your Estates-related needs.