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By Ryno Crous

Death is a subject that is frequently shied away from or avoided entirely. However, planning for the distribution of your estate and the wellbeing of your loved ones after you have passed, is an important financial duty.

Even with the importance of estate planning being heavily advocated in the financial industry, the Master of the High Court estimates that more than 70% of working South Africans do not have wills.

Should you pass away without having a prior Will and Last Testament, legislation determines how your assets are distributed at death, which may be contrary to your wishes. Drawing up a will is however only one – albeit essential – aspect of holistic Estate Planning. Please see a previous article written on the importance of a will:

Estate Planning Overview:

  • Estate Planning is of utmost importance to those individuals who are married, have been married, have children or other parties who are financially dependent on them.
  • By planning for the inevitable (through the assistance of an accredited and qualified financial advisor), you will be carefully structuring your financial matters in such a way that increases liquidity at death and minimises final taxes such as estate duty.
  • You will also have the opportunity to provide for minor beneficiaries in a way that is both prudent and financially responsible.
  • Further issues such as your marital regime, income taxes and capital gains tax are all aspects to be considered in a comprehensive Estate Plan.

Why is Estate Planning so essential?

There is a misconception that one can simply draw up a will to indicate your final wishes, and the distribution of assets will automatically take place as per the provisions as mentioned in the document. The reality is that the winding-up of an estate is an often-onerous process that entails many pitfalls (if not properly prepared for prior to death) that could significantly affect the transfer of assets and the enforcement of a person’s last wishes. The following covers a few examples:

  • Owning a business could have an impact on your financial affairs upon death. By receiving accurate advice, and planning adequately, you could limit the extent to which creditors can lay claim to your estate.
  • Since South-Africans are (subject to certain exclusions) taxed on their world-wide income, taxes may be levied on foreign assets and should therefore be considered as part of an integrated Estate Plan.
  • Various forms of taxation may have an impact on the inheritance your beneficiaries receive. With proper planning your financial advisor can assist you in minimising the eroding effects of final taxes by utilizing the various exemptions available at death, as well as benefits linked to your marital status.

Estate Planning is an exercise that should ideally be conducted on an annual basis, or immediately reviewed when a significant event takes place, which alters your estate or has an impact on your financial plan and/or objectives. Essentially, any change in a person’s circumstances should be followed by commensurate adjustments to their Estate Plan.

The reality is that anything can happen, and your loved ones could be placed in extreme financial distress if you do not have a plan in place to be actioned after you have passed away. Should you be interested in having a practical Estate Plan conducted, please contact your financial advisor today. Should you not have a dedicated financial planner, please let us know so that one can be assigned to you.


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Morebo Wealth (Pty) Ltd, an affiliate of Liberty, the Liberty Group Ltd is an authorised Financial Services Provider in terms of the FAIS Act (no. 2409)
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