Useful tips for estate planning

When planning your estate, you need to consider the following five things:

Last will and testament

Ensure you have a legitimate last will and testament. Ask yourself: Is your will up-to-date?

Are your wishes expressed clearly?

Does the will comply with the required legal requirements? Was it signed in the presence of two witnesses? Are they fit to sign as witnesses? Is the will dated on the last page?

Have you appointed guardians for minor children?

Are there alternative provisions for the inheritances of minor children such as a testamentary trust, or for beneficiaries should any one of them pre-decease you?

Are there heirs in case the family all die simultaneously?

Have you agreed on a fixed executor fee or a sliding scale where the executor fees decline as the estate increases? Executor fees are negotiable.

Beneficiaries

Ensure your life policy beneficiaries are up-to-date or that you’ve nominated beneficiaries. If you forget to nominate a beneficiary, the proceeds accrue to your estate.

Estate liquidity

A common mistake when doing estate planning is not doing an estate liquidity calculation.

This could result in the deceased estate not having adequate cash to settle estate expenses and debts. This, in turn, could lead to the executor being forced to sell estate assets, often at values below the market value, to generate cash for the mentioned expenses.

This shortfall could easily be addressed by leaving a portion of the life policy proceeds to the estate via a beneficiary nomination.

Record-keeping

Ensure all documentation is kept in one place. It should include details such as: The will; Assets and liabilities; bank accounts with passwords;

Usernames and passwords to all social media profiles;

Names and contact details of important people to notify when you die, like your financial planner, attorney, tax practitioner and broker.

Important documents like your birth certificate, marriage certificate, home loan, title deeds and car registrations.

Taxes

By using a certified financial planner and structuring your estate plan optimally, you could avoid unnecessary taxes.

Paying a professional fee for this service may save you a considerable amount.

Martin de Kock is at Ascor Independent Wealth Managers