Contrary to common belief, planning for your own death is not the forte of the rich or the morbid. Given that death has a 100% certainty, is it not worthwhile to spend a bit of time planning what we want to happen when we die?
1. Have your say. In South Africa the distribution of a person’s wealth when he dies is determined by the law of succession, which primarily favours the spouse and legal descendants of the deceased. However, subject to certain limitations, individuals also have freedom of testation, which means that they have considerable freedom and discretion as to how their estate should be distributed upon death. These wishes are expressed in a will, which must comply with the provisions of the Wills Act 7 of 1953 (referred to as “the Wills Act”).
2. Guardianship. One of the benefits of having a will is that you may deal with matters such as the nomination of guardians for minors. These would be people whom you trust and that understand your values and how you would like them to raise your minor children. Your will could also direct how you want cash inheritances in favour of minors to be handled. Where a will makes no other provision, cash inheritances due to minor beneficiaries are normally paid into the Guardian’s Fund (a government fund). You could avoid this by creating a testamentary trust (a trust that comes into being upon your death) which will receive the inheritance on behalf of the minors. This would give trustees considerable flexibility regarding the distribution of income and capital from the trust, as well as the investment of trust property.
3. Burial wishes. Your will can also state how you want your body to be dealt with, eg burial / cremation. If it is your wish to be buried, you can specify your preferred burial location. This is especially helpful to avoid conflict after death and protect your grieving loved ones in the process.
4. Living will. In your will, you can also state what your wishes are if at any point you are on your deathbed and there is no reasonable prospect of recovery from physical illness or impairment. You may request that, in such circumstances, you be allowed to die and not be kept alive by artificial means.
5. Most cost-efficient way of dying. Death is not only a traumatic event in the lives of your loved ones. It can also trigger associated taxes due to the transfer of wealth. Such taxes could include estate duty, transfer duty, capital gains tax and even VAT. By anticipating these, we can assist you to structure your assets in ways that are most tax-efficient whilst simultaneously protecting your assets for the benefit of your loved ones.
6. Providing for death-related expenses. Usually, when we think of death-related expenses, the first thing that comes to mind is the funeral costs. However, there are other, lesser-known costs that can render dying an expensive exercise. Such costs could include executors’ fees, conveyancing fees (transfer of property to beneficiaries), property clearances prior to transfer, etc. Helping you understand and provide for such costs is part of what we do. Contact us for an appointment and we will gladly assist.
7. Peace of mind. Once you have gone as far as you can preparing for your death, isn’t it reassuring that you can focus on living with peace of mind, knowing you have done the best you can for the ones you love the most?