Estate Planning

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Estate Planning: Deceased Estates And The Right To Claim Maintenance

Introduction

When planning for our future, we often think about things like saving for retirement or writing a will. But have you considered what will happen to your loved ones after you pass away? This is where estate planning comes in.

Estate planning involves creating a comprehensive plan that outlines how the assets will be managed and distributed after you pass away. This plan can include things like designating beneficiaries for your life insurance policy or retirement accounts, creating a trust to protect your assets, and specifying who will inherit your property.

By creating a comprehensive plan that includes provisions for right-to-claim maintenance, you can provide financial security for your loved ones while ensuring that your assets are distributed according to your wishes.

Keep reading to find out how estate planning and the right-to-claim maintenance work, and how to provide financial security for your loved ones after you pass away.

estate planning and the right to claim maintenance

Understanding Deceased Estates

In South Africa, when a person passes away, their estate is managed by an executor who is appointed in their will, or by the Master of the High Court. The executor is responsible for winding up the estate, which involves identifying and valuing the deceased’s assets and liabilities, paying any outstanding debts and taxes, and distributing the remaining assets to the beneficiaries.

This process can be complicated, especially if you have a large or complex estate which is why it’s important to ensure that all your financial affairs are in order to make the process as smooth as possible. This should involve working with a qualified financial advisor to ensure that all assets and liabilities are accounted for so that all your loved ones have peace of mind to do the thing that matters most – take time to process their grief without worrying about what will happen to them

What Responsibilities Does An Executor Have

One of the key responsibilities of the executor is to ensure that the deceased’s wishes are carried out. If the deceased had a will, the executor will need to follow those instructions as closely as possible. If there is no will in place, the executor will need to distribute the assets in accordance with the Intestate Succession Act.

The executor needs to act in the best interests of the beneficiaries – this may include family, friends, business associates, pets, and charities. The executor needs to ensure that the estate is distributed fairly and that beneficiaries receive what they are entitled to.

the right to claim maintenance

The Right to Claim Maintenance

One of the important parts of estate planning is considering the right to claim maintenance, as financial dependents may be entitled to receive financial support from your estate when you pass away.

who is eligible to claim maintenance

Who Is Eligible To Claim Maintenance From A Deceased Estate? 

Dependents such as minor children, surviving spouses, and parents of the deceased are generally eligible to claim maintenance. However, the amount of maintenance that can be claimed will depend on the financial needs of each dependent and the value of the deceased estate.

One important aspect of estate planning in South Africa is understanding the right to claim maintenance from a deceased estate. This is a legal right that can provide financial support for those who were financially dependent on the person who passed away.

According to South African law, certain dependents can claim maintenance from a deceased estate. These dependents include minor children, surviving spouses, and parents of the deceased. However, it’s important to note that not all dependents are automatically entitled to claim maintenance. The right to claim maintenance will depend on a number of factors, such as the financial needs of the dependent and the value of the deceased estate.

how to make a claim for maintenance

How To Make A Claim For Maintenance

To make a claim for maintenance, you will need to follow a few steps. 

Notify The Executor

First, you will need to notify the executor of the estate that you intend to make a claim. It is important to do this as soon as possible, as there are strict time limits for making a claim.

Supply Supporting Documentation To The Executor

You will also need to provide the executor with the necessary documentation to support your claim. This might include things like bank statements, proof of income, and proof of expenses. It is important to keep all of your documents organized and up-to-date to ensure that your claim is successful.

estate planning and maintenance everything you need to know

Being eligible to claim maintenance can provide much-needed financial support during a difficult time. However, it’s important to note that there are limits to the amount of maintenance that can be claimed and that this will depend on the specific circumstances of each case.

If you believe that you may be eligible to claim maintenance from a deceased estate, it’s essential to seek legal advice as soon as possible. A qualified attorney can help you understand your rights and guide you through the application process.

Conclusion

Estate planning is an important part of preparing for the future. By including provisions for maintenance in your estate plan, you can ensure that your loved ones are taken care of after you pass away. 

If you believe that you may be eligible to claim maintenance from a deceased estate, it is important to seek legal advice and follow the correct procedures to ensure that your claim is successful.

Start planning your future, today. Contact us on the details below.

📞 011 839 2302

✉️ info@maysure.za.com 

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Estate Planning: Can You Trust A Trust?

There is nothing easy about estate planning. If you don’t have the right financial planning partner to ensure that your affairs are in order, it can become a nightmare. Just the sheer amount of products on the market can leave you overwhelmed and scratching your head trying to decide what to do. 

When set up correctly a trust can be a very useful estate planning tool. You need to weigh up all your options to decide if a trust is suitable for your estate. Read further as we unpack the pros and cons of trusts and help you figure out what’s best for you. 

 

What Is A Trust?

Simply put, a trust is an arrangement between two parties. The first party (the trustee) holds assets for the second party (the beneficiary) as instructed by the owner (trustor).

In recent years more and more people have wondered if a trust really is the best vehicle to store their assets for their loved ones. So why would someone still use trusts in this day and age?

Well, if you contact a financial services provider who knows what they are doing, a trust can have a multitude of benefits. Trusts can be a fantastic vehicle to protect against creditors, they can help reduce certain taxes on your estate and they can be an effective planning mechanism for future generations.  

Is A Trust Right For You?

It might seem pretty obvious that the problem is not primarily with the product of trusts but who you secure the trust with. Just because they seem advantageous doesn’t mean that trusts are right for your estate. 

Maysure Finacial Services can help you decide which trust will best fit your estate or if you need one at all. It is important to think carefully before deciding to add this product to your estate. You really need to weigh the pros and cons:

Advantages Of A Trust In Your Estate Plan

Here are a few ways a trust can benefit your estate:

Asset Protection 

Certain trusts can be used to protect assets from creditors. This, of course, does not mean you can prejudice your creditors on purpose. 

You only live once and sometimes you might feel the time is right to take a high-risk business venture. In this event, a trust can be used as a shield to protect your loved ones’ assets from potential creditors. 

Provide for a dependant with a disability 

One of the biggest fears parents of children with disabilities face is “who will take care of them when I am gone”. A special trust can help you fix this problem and finally put your mind at ease. 

A certain trust may be registered for the sole benefit of a child or dependant that is not able to manage their own affairs due to disability. These trusts even qualify for favourable tax benefits that could end up making your loved ones’ life so much easier. 

Access To Capital In Event Of Your Death 

Of course, you are not only concerned with the well-being of your disabled dependents in the event of something happening to you. Your able-bodied loved ones need just as much protection and trust can ensure their needs are met in a timely fashion.

Certain trusts create an ideal situation to make sure your loved ones have capital and income after you die. Your personal accounts may be frozen as part of the administration process but your trust does not form part of these personal accounts. 

While your loved ones wait for your estate to pay out, you are able to ensure that they remain in in a stable financial position. 

Disadvantages of A Trust In Your Estate Plan

Of course, it is not all sunshine and rainbows when it comes to setting up a trust. There are a few things that make people hesitant to include them in their estate. 

Admin Costs

Running trusts can add a layer of complexity and cost to your financial affairs. If you are planning to appoint a professional trustee for your trust you need to budget for that. 

It is important to keep costs as low as possible. This will make sure you have enough money to maintain your trust and ensure all functions are attended to. 

Choosing The Wrong Trustees 

Who you partner with on your trust is of extreme importance. A trustee will essentially have control of all your assets after you die so make sure you have the right professionals for the job. 

Choose a financial partner that really has the beneficiaries’ best interest at heart. One that can put your mind at ease when it comes to your family’s being.  

Find Out More About Trusts Today

Outlined in this article are just a few of the pros and cons that you can experience when trying to set up your trust. You need to be sure this is the right product to meet your estate planning needs. 

Find out more about trusts today. Call a partner you can trust with your future. 

Contact us here:

+27 11 839 2302

info@maysure.za.com

Maysure Financial Services is a registered financial services provider. FSP 15173

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TRUSTS: EFFECTIVE ESTATE PLANNING & TAX-SAVING MECHANISMS

In order to effectively organise your financial security and legacy, you need to start by establishing your estate planning questions. These questions often touch on the complex topic of tax and trusts. To bring these concepts together takes a certain skill and expert understanding. This is where estate planning professionals are crucial.

We’ve put together a guide of some of the fundamentals when it comes to the relationship between trusts, estate planning, and tax considerations. Keep reading to find out if trusts are the right vehicle for you and your family. 

WHAT ARE TRUSTS?

Lady holding pen

A trust can be defined as a tripartite legal relationship that exists between a founder, a beneficiary, and a trustee.

The trust is created by the founder, who places his or her assets in the trust, and then administrative control is given to the trustee. This is often done for the benefit of the beneficiary.

Trusts can provide advantages in several areas, such as:

  • Estate planning and management
  • Asset protection and preservation
  • Maximisation of tax-saving
  • Flexibility and confidentiality

Trusts can also operate independently or form part of a broader financial strategy. They are often used as an instrument to allow for the preservation and transfer of assets between generations. They can also be used as a means to manage and protect your assets, after or during your lifetime.

WHAT ARE THE TYPES, USES, & BENEFITS OF TRUSTS?

Two people discussing finances

In South Africa, there are many different types of trusts available. For our purposes, we will be discussing living (inter vivos) trusts and testamentary trusts. Each type has specific uses and benefits.

A living trust, or family trust:

  • Is established by the founder, or family, during their lifetime
  • Becomes effective at the time of its registration
  • Carries with it the benefit of enabling the wealth-building of its beneficiaries during the lifetime of the founder
  • May be used as a means to protect assets

A testamentary trust:

  • Is created by the terms stipulated within the will of its founder
  • Only comes into effect after the death of its founder
  • Offers the benefit of protecting both minors and vulnerable family members
  • It does not safeguard assets during the founder’s lifetime

There are several questions you can ask yourself to assist you with choosing a trust type.

Do you want peace of mind about the management of your children’s inheritance, and what may be left behind when you are gone?

Or, do you want to protect your current assets and build a lasting stream of growth for your family?

Contact us so we can help you find the right trust for you and your family.

TRUSTS FOR ESTATE PLANNING

Woman in discussion with couple

Setting up a trust, as opposed to a will, is an effective estate planning measure. It can result in faster transfer processes, lower administrative costs, and tax reliefs.

Because the growth of the trust does not directly form part of the estate, and instead belongs to the trust itself, the trust is afforded protection against estate duties (unlike with a will). This will also effectively protect the assets from creditors in the event that your estate goes insolvent.

In addition, it can also be used as a means to specify the type of wealth accumulation that you envisioned for your family assets.

For example, instead of providing a lump sum of capital, or splitting up the funds amongst the beneficiaries, the fund can remain unified, continue to grow, and subsequently be used as a source of consistent income.

ENDOWMENTS AS A TAX SOLUTION

Man putting money in a jar

Trusts are not without their drawbacks though. Two of the major pitfalls in establishing a trust in South Africa include:

  1. Heavy tax burdens on income that is kept at the trust-level (between 36-45%)
  2. The inability of the trust, as an entity, to directly invest off-shore

However, there are effective tax-saving mechanisms that can exist within a trust to counter these disadvantages.

For example: if a trust were to invest in an endowment fund, it would reduce its income tax to a flat rate of 30% and their capital gains tax (CGT) to as low as 12%.

An endowment fund also allows for the creation of offshore investment opportunities. This can not only diversify your investment portfolio, but also act as an effective tax-saving mechanism.

IS A TRUST THE RIGHT MOVE FOR YOU?

There are conditions under which it would be beneficial to set up a trust:

  • If your assets exceed 3.5m
  • When you have minor children or vulnerable family members
  • If you want to retain your family’s wealth well into the future

Before you make your decision, it is vital to know that the creation and management of a trust comes with more administrative requirements than that of a standard investment account.

It is a good idea to make yourself aware of these processes and costs before you make your decision. If your top priority is to save on taxes, then a tax-free investment might be a better option for you.

Start planning your future, today. Contact us on the details below.

+27 11 839 2302

info@maysure.za.com

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Tax Law Changes: Effects On Estate Planning

Within the South African tax sphere, changes are continuously made to ensure fair and balanced taxed households.

Every business owner, employee, and regular individual must be in the know regarding tax laws implemented in South Africa. We at Maysure Financial Services have a firm grasp on estate administration and the relevant tax laws. Keep reading to find out more about changes to tax and the related effects on your estate. 

What are the current changes to tax law?

Man writing in book

Proposal of exit tax on retirement interests (for now)

You may wonder what ‘exit tax’ means’? In simple terms, it is the tax that is payable (when you leave the country) on either foreign fixed property, trusts, shares, or unit trusts as well as similar investments. All of this forms part of the standard process for emigration.

The proposal of introducing an exit tax was drafted last year but has since been on hold. During this “hold”, no tax will be charged on the assets sold. As a result, now is potentially a good time to move for those looking to leave.

Conversations are still ongoing. as the proposal will be re-examined later this year. Here at Maysure Financial Services, we assist you to prepare for the future of your estate and retirement by planning according to what regulations and legislation are in place.

Use of retirement interest to obtain annuities

In the past, an individual could not acquire annuities upon their retirement. However, now, because of the amendment to the Income Tax Act, individuals can choose from different types of annuities. Retirement annuities are an excellent vehicle of income for retirees.

Estate duty

Estate duty should not be an unfamiliar term. Well, that is if you have written a will and made plans for your estate upon your death. 

There are no changes to the tax regarding this particular aspect of estate planning. But, it must be noted once a deceased person’s assets have been filed. This is essential because it is the ultimate duty of the executor to ensure the duty levied on the property of the deceased is paid.

Estate duty is charged on movable or immovable properties/assets of a deceased person. Among other responsibilities, the executor needs to know the value of these assets. 

At Maysure Financial Services, we offer estate administration services to ensure everything is distributed according to your final wishes and loved ones’ needs. 

Capital and income gains tax

Family laying on the ground

When you pass away, your tax expense doesn’t leave earth with you. SARS has the right to claim what is owed to them before any finalisation of an estate. These include income tax, capital gains tax, donations tax, and any other form of tax that may be applicable.

Capital gains tax refers to a tax that is not separate but forms part of income tax. A capital gain occurs when you dispose of an asset for proceeds that exceed its base cost. This tax is normally for companies, individuals, or trusts.

A resident of South Africa, as stated in the Income Tax Act 58 of 1962, is responsible for capital gain tax on assets that are located both in and outside South Africa.

Whistles a  non-resident is responsible for capital gain tax only on immovable property in South Africa or assets of a “permanent establishment”  in South Africa. 

Couple talking to estate administration consultant

How all of these tax laws affect your estate

Drafting an estate plan shows your loved ones that you care for them and understand the importance of planning. Tax laws make up an important part of estate planning which may affect your estate in the unfortunate but inevitable event of your death. 

In many ill-fated cases, families are left in devastating financial and emotional situations because of hefty tax penalties and red tape. A financial professional can help you to navigate the intricate web of tax regulations and stipulations. 

Changes are inevitable. It is how you plan around them that matters.

Man sifting through paperwork

If you need assistance in understanding Acts and Laws concerning your estate, don’t hesitate to call us.

+27 11 839 2302

info@maysure.za.com

Maysure Financial Services is a registered financial services provider. FSP 15173

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Estate Administration: Inheritance & Wills In South Africa

South Africa has an inclusive justice system. This can be seen from its acknowledgment of rights for foreigners and people in customary marriages.

With the interplay between different laws and stipulations, estate planning and administration may seem a daunting task. Fortunately, writing a Will and the inheritance process do not have to fill you with dread.

Here is our guide to understanding estate administration, inheritance, and Wills in South Africa.

What Is Estate Administration

An estate is the total of money, assets, and property owned by an individual, especially at death.

Estate administration is the process of:

  • managing the estate,
  • paying any taxes or debts due on the estate, and
  • distributing the property and assets to the heirs and beneficiaries.

Estate administration ensures the deceased’s final wishes are carried out correctly. However, it’s important to note that it is a highly technical process.

Each individual’s estate and circumstances differ. Let’s draw a comparison.

A 65-year-old parent with five dependents, two businesses, numerous properties, foreign assets, and a large investment portfolio

vs

A 33-year-old young professional with life cover, a spouse, no property, and a trust.

Both individuals have different family situations and are in different life stages. Yet, both would benefit from professional expertise to help them plan out their estates in the most tax-efficient and timely manner.

Avoid the pitfalls

The estate administration process is littered with pitfalls and red tape. The estate needs to be dealt with properly in order to give your family peace of mind after you’re gone.

The greatest tool to protect your final wishes is the Will. Drafting a valid Will simplifies the entire estate administration process by setting out your intentions in writing.

Drafting, Amending, And Revoking Wills

Drafting, Amending, And Revoking Wills

Most people in South Africa can draft their own Will. Drawing up your own valid Will requires you to have two people sign as witnesses (read more about the Will-making process here).

It is a simple process if you have a simple estate. However, taxes and know-how of the law are useful, especially if you have a large family, several assets, or policy payouts to manage.

At this point, it is always best to consult your financial advisor who will be able to help you with your financial needs. In this way, the process is smoother when it comes to dividing your assets.

As your life changes, so will your financial circumstances. This is why it’s important to regularly update your Will in the face of new life events like the birth of a child or purchase of a business.

Amending A Will

You can amend your current Will through a codicil. This is also known as an update to the Will.

All changes must comply with the requirements of a valid Will. Fortunately, the process does not require the two original witnesses to sign the Will again.

Revoking A Will

Asides from amending your Will, you can also completely revoke it. You can create a new one. The latest Will must state that the previous one has been revoked, or the old Will has been destroyed.

Revoking and/or destroying previous versions prevents future confusion and potential feuds between your beneficiaries and heirs. It helps all interested parties and loved ones stay on the same page.

Inheritance Law In South Africa

Inheritance Law In South Africa

Inheritance law applies to South Africans who own property in the country. The inheritance legislation generally respects the wishes of the deceased.

However, there is one exception to this law. If the spouse is left out of the Will, he or she can petition to claim a part of the estate to support themselves. This is called the Maintenance of Surviving Spouse Act.

Grant Of Probate

Grant Of Probate

A grant of probate is a document that affords a person the legal authority to act as executor. This executor can then administer the estate on behalf of the deceased.

After the subject’s passing, the family has two weeks to notify the Master of the High Court. This begins the process of settling the estate, including officially recognising the executor.

Within the Will, the deceased makes known the executor of their estate. This person will collect the deceased assets, pay any debts and estate taxes, and distribute the estate among beneficiaries.

Because of the sensitivity around death and finances, many people prefer to appoint estate administrators with both an excellent knowledge of the estate planning environment and a good relationship with the family.

Inheritance Tax In South Africa

South African inheritance tax (estate duty) applies to all estates that are valued below and above a certain amount. These estates may be subjected to capital gains and donations tax too.

  • For an estate under R30 million, the estate duty is 20% of the estate’s dutiable amount.
  • For an estate over R30 million, the estate duty is 25% of the estate’s dutiable amount.

Feel free to get in touch if you need help with navigating estate duty taxes and the small print of estate transfer.

Maysure Financial Services Estate Administration

Maysure Financial Services Estate Administration

Estate administration requires a professional and personal perspective. At Maysure Financial Services, our services are tailored to your circumstances.

Our offerings are inspired by your life and we do all we can to help you achieve financial freedom in this lifetime and for your family in the next.

We offer estate administration services that are fully committed to your needs. At all times, we provide you with the best support possible.

If you’re not sure where to turn, contact us today with your estate administration queries.

+27 11 839 2302

info@maysure.za.com

Maysure Financial Services is a registered financial services provider. FSP 15173

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Estate Planning: Questions You Should Be Asking

When it comes to preparing your estate plan, it’s natural to have questions. The thought of getting your affairs in order can be mind-boggling. Especially when you consider all the moving parts of an estate plan, such as legal documents, wills and testaments, setting up trusts, and the executorship.

We’ve put together some of the most frequently asked questions about estate planning. We hope this will help you with your estate planning endeavours.

Will Vs Trust: What’s The Difference?

Happy man signing document

When it comes to bequeathing your assets, the choice between drafting a will and forming a trust can seem confusing. Both wills and trusts are estate planning tools that help to ensure your assets are protected.

A will is a legal document created to express how a person wishes his or her property to be distributed at death. It also names a person to manage the estate during its final distribution. Keep in mind that a will can only become active after your death.

In contrast, a trust is a fiduciary arrangement that allows a trustee to hold assets on behalf of a beneficiary. Trusts become active the day you create them. A grantor, the person who creates the trust, may even list the distribution of his or her assets before death.

What Is Better; A Will Or A Trust?

Women looking at two documents

Having a trust can quicken the process of transferring your estate after you die. With this tool, your loved ones may be able to avoid the potentially drawn-out process of distributing your estate.

On the other hand, if you have minors or any other dependents, a will naming a legal guardian may be crucial to protecting them and their inheritance. A will is also typically less expensive and easier to set up than a trust.  

The bottom line is this. Having a will or a trust, or both, can help you ensure your assets end up where you want them to go. Contact Maysure Financial Services to decide which options are best for your estate.

I Am Not Wealthy, Why Do I Need To Have An Estate Plan?

Man with model house and key

The benefits of estate planning are not just for the rich. With a proper estate you can:

  • Derive the maximum benefit from your assets during your lifetime
  • Provide for the maximum transfer of wealth to the next generation
  • Create funds for the payment of any liabilities that may arise when you pass away
  • Ensure your estate is administered correctly
  • Minimise costs and estate duty taxes
  • Ensure your future asset growth is not limited
  • Protect your assets

These are just a few of the financial solutions estate planning offers. If you choose not to form your own estate plan, the state or even legislation could end up making these decisions for you.

Who Should I Trust To Handle My Estate Planning?

Couple shaking hands with advisor

Selecting the right partner to assist you to plan your estate is important. Not all estate plans are the right fit for you and your family. A plan that is inferior to your needs can lead to unfulfilled potential and wasted time.

The process of finding the right financial advisor doesn’t have to be a difficult one. While the family lawyer may seem like the perfect person to handle all your financial affairs, you could end up paying more for someone without all the relevant financial knowledge. You are better off consulting an expert than risking unintended errors.

When it comes to an estate planner, you need to be able to trust this person implicitly.

Before you commit, ask your financial advisor about their experience in dealing with clients with similar needs to your own. These needs could be anything from a closely-held business, a disabled child, or Shariah investment criteria.

Don’t Wait, Plan Your Estate

Hand with computer and diary

Life (and death) happens when you least expect it. A good estate plan can act as a shield against worst-case scenarios. At its core, estate planning is a sure-fire way to protect your assets and your loved ones.

With the right partner, your estate plan can actually grow your asset base. Maysure Financial Services provides you with the right combination of tools to help your assets realise their full potential. Whichever way you look at it, your future can only benefit from a well-thought-out estate plan.

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Get started on your estate plan today. Contact us here:

+27 11 839 2302

info@maysure.za.com

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Writing Your Will: Frequently Asked Questions

You’d be surprised at how many people believe that writing a will is not essential. They assume their hard-earned money will be left to intended beneficiaries automatically when they pass away. Unfortunately, this is not always the case.

Other people tend to procrastinate – a real roll of the dice since we don’t know when the end will come. We know first-hand that writing a will can be daunting. To help with the process, we’ll answer some frequently asked questions about creating your last will and testament. 

Why Is It Important To Have A Will?

Man looking at a document

When you are alive you have absolute control of your estate. But, upon death, that can all change. A will helps to regulate what happens to your estate after your death. It can even contain provisions that guarantee care for your dependents after you are gone.

Merely leaving verbal instructions or simply having the intent to execute a will is not sufficient. Even an attempt to draft a will yourself could render the document invalid if all the prescribed formalities are not properly followed.

Leaving a professionally drafted will that applies effective estate planning strategies ensures your vision becomes a reality. A will helps ensure that your hard-earned work is not needlessly devalued.

When Should You Consider Drafting A Will?

Woman and child hugging in forest

Anyone with assets would benefit from drafting a will. Legally, any person over the age of 16 is allowed to make a will unless he/she is mentally incapable of doing so.

You can choose to write a will at any point in your life. However, there are certain life events that may make the decision more necessary. Events such as having children, starting a business, or inheriting a large sum of money make having a will more urgent.

What Should I Put In My Will?

Family laughing on the floor

While you can virtually do what you want with your estate, there are a few limitations of which to take note. For example, there can be no provisions in your will that are unlawful, against good morals, too vague, or impossible to perform.

Additionally, any minor children have a common law claim to maintenance. Certain legislation may also limit one’s freedom of testation. Such as in a case where pension funds or spousal maintenance is concerned.

When drafting a will, consider these crucial elements:

Guardianship

Most parents want to ensure that their children are properly cared for in the event of their deaths. Without a will, it could solely be left up to legislation to govern what happens to your children.

Having a will gives you and your loved ones needed relief. You are free to clearly indicate who you would prefer to raise your children.

Assets

One big factor to consider when creating a will is your assets. Assets can include anything from money and business to heirlooms and other valuable items.

With a will, you can outline which individual should inherit which asset. This part of the will must be as clear as possible. The asset must be clearly described so that it is not left up for interpretation.

Property

The decision of how to split your home is obviously more complex than giving away a favourite heirloom. If you have one home but many beneficiaries, you’ll want to clearly outline your expectations for dividing the property.

Who Should Be My Executor?

Couple listening to an executor

The role of an executor is an important one. It should preferably be a person or institution that is familiar with deceased estate administration.

Professional establishments like ours at Maysure Financial Services give you the option to appoint a skilled executor together with a surviving spouse or a direct family member. As a result, your estate is left in the most capable hands.

It is the executor’s job to do the bulk of the work. By sharing this responsibility, your loved ones can feel included in the decision-making. It can also help to bring important family issues into consideration.

Certified Financial Planners vs Bank Executors

While the bank might seem like the obvious choice to handle your will and estate, it could create difficulties for your surviving spouse or heirs. Having a financial institution as your estate executor means your family has much less control.

Your loved ones are left at the mercy of an impersonal financial institution. And, the process of completing your estate could take years. In the meantime, your family members will have no access to estate funds, which could lead to unwanted debt and financial struggles.

Estates are often complicated and the “standard draft will” provided by the bank might not fit your individual needs. Although its affordability makes it attractive, it usually is not equipped to render the service best suited for your situation.

Plus, these wills are never truly inexpensive. Often banks will seek to be appointed executors in order to gain the executor’s fee that works out to 3.5% of the value of the estate assets.

A serious drawback to having a bank as an executor is this. If, after your death, the bank decides the estate has little value, the institution could refuse to take the appointment as executor.

Your heirs would be forced to approach the Master of the Court to appoint a new executor. This could lead to more delays and frustration for your loved ones.

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In contrast, a financial advisor assists you to map out the relevant costs as part of your estate planning. He or she can give you invaluable advice that will help you make the most out of your will and estate.

An advisor can also act as your executor. With your financial planner, you can negotiate your executor’s fees by discussing related factors, such as age, asset values, and the estate’s complexity. In that way, you can keep costs to a fair and reasonable minimum. And, you’ll ensure your will and estate administration are watertight.

Now Is The Best Time To Start Your Will

Woman discussing will with man

Wills are the best way to plan ahead. While there is no “perfect” time to establish one, it is a tool that can offer you and your family peace of mind. Will drafting is a delicate process that must be handled with the utmost care.

We suggest employing a professional who can assist you with this process.

Maysure can connect you with an experienced, qualified professional to handle your affairs. We offer a range of services to assist you in planning your estate at any stage in your life. It is our life’s work to ensure you feel like your last wishes are being respected.

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Trust us with your last will and testament. Contact us here :

+27 11 839 2302

info@maysure.za.com

Maysure Financial Services is a registered financial services provider. FSP 15173

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Inheritance Tax & Estate Duty Guide

Many people have a mental block when it comes to the topic of tax. Who can blame them? Trying to make sense of tax laws in South Africa can be an incredibly difficult undertaking. However, this is not an excuse to leave your assets to fate.

When creating your estate plan, you need to have a basic understanding of inheritance tax and estate duty. In that way, there won’t be any surprises for your loved ones later.

In this guide, we’ll take you through inheritance tax in South Africa and Estate Duty.

Inheritance Tax In South Africa

When a natural person passes away, that person’s assets are collectively placed into an estate. This deceased estate has to pay certain inheritance taxes as well as personal income tax for the deceased’s final tax year.

The estate assets can include property, movable property (like cars and keepsakes), money, or even business shares.

Several different laws apply to inheritance tax in South Africa:

  1. The Estate Duty Act (Act 45 of 1955): This law places an estate duty on the deceased estate.
  2. The Administration of Estates Act (Act 66 of 1965): This Act handles the disposal of deceased estates in the country.
  3. The Wills Act (Act 7 of 1953): This law influences all testators (those who have written a will or given a legacy) with property in SA.
  4. The Intestate Succession Act (Act 81 of 1987): This Act covers all deceased people who own property in SA and have not left a valid will.
Five red houses in a row

Inheritance tax is divided into the following types of tax:

  • Personal income tax for the deceased
  • Estate duty tax
  • Capital gains tax
  • Donations tax (if relevant to the deceased estate)

We’ll take a look at estate duty tax below.

What Is Estate Duty Tax?

Documents for Estate Duty

The estate beneficiary/beneficiaries do not have to pay tax on what they inherit. The inheritance is not seen as part of their gross income.

Estate duty is deducted from the estate before it reaches the beneficiaries. Usually, it is the estate executor’s responsibility to pay this tax.

As mentioned, estate duty is regulated according to the Estate Duty Act. This tax applies to the transfer of assets and wealth from the deceased estate to the beneficiaries. It applies to the dutiable amount of the estate.

The tax amount differs depending on the value of the estate.

  • For an estate under R30 million, the estate duty is 20% of the estate’s dutiable amount.
  • For an estate over R30 million, the estate duty is 25% of the estate’s dutiable amount.

There are some exceptions and limits applicable to this type of tax. For instance, in some circumstances, double taxation may occur. This happens when the deceased’s assets are subject to estate duty within South Africa and a foreign country.

Fortunately, South Africa has estate duty agreements with several countries to avoid double taxation. You can find out more about these tax agreements here.

Estate Duty, Debt, & Life Cover

Large extended family in front of front porch

The winding-up of a deceased estate can take anywhere between five months and several years, even if there is a valid will in place.

This can lead to a trying time for loved ones and family members in a financial and emotional sense. Even more so when estate duty and debt are added to the mix.

When it comes to estate duty and debt, life cover is a useful tool that can help to reduce debt and assist loved ones. The payout from a life insurance policy goes directly to the beneficiaries. It does not form part of the estate, meaning no estate duty tax is applied.

This means your life insurance beneficiaries will receive immediate relief upon your death, instead of having to wait for the estate wealth transfer to be finalised. This gives plenty of value to your loved ones.

In the case of any debt you may have outstanding, life cover is also beneficial. If you nominate a family member as your beneficiary for the policy, the payout is protected from creditors, ensuring your family’s financial security.

Contact us to discuss life insurance and how it can improve your estate planning.

Final Thoughts On Inheritance Tax & Estate Duty

Life belt on ship

Inheritance tax and estate duty may seem complicated at a glance. Yet, with the right information and help, you can easily navigate through it.

Having life cover policies in place will be instrumental for your estate planning. This type of cover will alleviate the financial stress that the eventual estate transfer process will have on your beneficiaries.

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Feel free to contact us with your queries about inheritance tax and estate duties.

+27 11 839 2302

info@maysure.za.com

Read more about life cover and financial health from Maysure Financial Services.

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Estate Planning, South Africa: Write a Will

The global pandemic has made plenty of people aware of their own mortality. Many of us have caught ourselves thinking of what would happen to our loved ones if we passed away. Would they be alright? Would they be financially secure? 

These thoughts can be the start of the process of estate planning. By looking to the future, we can secure a legacy for our families and our businesses. 

In this post, we’ll look at the process of writing a will, what happens if you don’t draft one, and how a will relates to estate planning in South Africa. 

What Is a Will? 

Blank will with pens

According to South African law, any person has the freedom of testation. You can plan to distribute your estate how you wish. This means that you can decide how your assets will be dealt with when you die, as long as it doesn’t go against the public interest. 

Writing a will enables you to nominate an estate executor. This is the person who will act on your behalf and manage your assets after you die. You can also nominate a guardian for your children if they are minors. 

Do I Need to Write a Will?

Fountain pen

No, you don’t, but we advise that you do. 

If you pass away and you haven’t written a will, the Intestate Succession Act takes effect. This piece of legislation is generally quite fair, ensuring that your estate and assets are distributed between your spouse and children. 

If you don’t have a spouse or children, your assets will be split between your blood relatives according to a hierarchy: your parents, then your siblings, then your other relatives. If you decide not to write a will, it’s your responsibility to get familiar with the Intestate Succession Act. 

According to this Act, your asset distribution can be influenced by customary or religious law. This is one of the reasons we suggest every individual should draft a will. They can ensure their legacy and assets are left in their manner of their choosing. 

If you pass away without leaving a will, problems can arise:

  • Your assets may not be passed on to the person of your choice.
  • There can be extra and unnecessary costs for your loved ones.
  • There can be a lengthy time period before an executor can be appointed. 
  • This can cause misery and conflict in your family due to the lack of clear instructions about how to deal with your estate. 

Writing a Will: Requirements

Hand signing a will

Below, we’ll take a look at the requirements for drafting a will. 

Who can draft a will?

Anyone who is of sound mind and is over 16 years of age can write a valid will. Although, we do recommend you get help from the experts. 

Asking an attorney to draft your will is a good move as they are qualified in law and can help you with potential problems that may arise in the drafting process. Attorneys also have the legal knowledge to ensure that your will is valid and fulfils your wishes.

We also recommend seeking the expertise of a financial advisor. By asking your financial advisor for insight, you can take action to secure your legacy for the future. By consulting the experts in the process, you engage in considered and effective estate planning. 

What makes a will valid?

For a will to be valid, it needs to:

  • Be in writing
  • Have been signed on every page and at the end by the person writing the will
  • The signature must be conducted in front of two witnesses (older than 14 years and they cannot benefit from the will)

Signing a Will: What You Need to Know

Man looking at a screen with quizzical expression

There are a few things you need to consider when signing a will. Firstly, you cannot sign your will and then email it to your witnesses to add their signatures. The will writer (testator) and the witnesses have to all be present at the signing of the document. 

Your witnesses cannot be benefactors, the appointed guardians, or the executor of the will. Also, interesting to note is the fact that your witnesses don’t need to read the will. Their primary function is to witness you signing the will. 

Estate Planning and Wills

Family walking on pier by sunset

Estate planning is inspired by your life. These plans usually include a will and other documents that act as a map for fulfilling your wishes, before and after death. 

Effective planning includes structuring of estate duties so taxes are minimised and ensuring the protection of your heirs’ inheritances. Estate planning is not restricted to life policies. All your assets are taken into account by your advisors, such as wills and trusts, marital contracts, and income tax.

Estate planning is essential to protect those you love because, without a plan in place, the negative consequences could impact them for years to come. 

For more information about estate planning and wills, feel free to get in touch:

+27 11 839 2302

info@maysure.za.com

See our estate planning service here: https://maysure.co.za/services/

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Maysure Estate Planning: Leave a Lasting Legacy

Leaving a lasting legacy for those you love is ultimately the final gift that you will be giving them. Although it is not a subject that one likes to dwell on, your life cycle is just that, a cycle; and if planned properly you can leave a lasting legacy that will set up those who have been with you on your journey, for generations to come.

A pivotal part of your planning should include estate planning. Simply put, this is ensuring that your lifelong assets such as your car, home, other real estate, savings accounts and other personal possessions and policies are effectively managed in the most appropriate and financially savvy way during your life so that they can keep on giving after your life.

Estate planning is inspired by your life and plans generally consist of a will and other documents that are meant to provide a map for fulfilling your wishes both before and after death. Effective planning includes structuring of estate duties so that taxes are minimised, ensuring sufficient liquidation to cover all your estates financial obligations and protection of inheritance options for future heirs. This planning is not restricted to life policies, and all your assets will be taken into account by your advisors, such as wills and trusts as well as marital contracts and income tax.

It is important to remember that estate planning is so much more than just planning physical assets, but should also include:

  • Provisions for your intrinsic values. Who you are and what you believe in are the cornerstones for your family and should be documented and included. This can include things such as your religious wishes, education choices and family values.
  • Instructions for care should you become disabled. This is vitally important because you might not be of sound mind and your wishes need to be documented before hand should the unforeseen happen.
  • Ensure that instructions for minor children are set in place including the naming of guardians as well as inheritance trustee’s.
  • Trust planning for children who might leave South Africa to either work or live permanently overseas. Ensuring that your legacy is left for them in a protected trust in South Africa, leaves you and them with the peace of mind that they will be looked after, no matter where they decide to lay down their roots.

With the above in mind, an important consideration when undertaking the estate planning process is to set up provisions for the needs of any children who might have disabilities. This can be covered as a “Special Trust Type A”. and should this be relevant to your circumstances, it must be discussed from the outset with your financial advisor, so that it can be included in your directives.

The professionals at Maysure know and understand that to your family, you are their world, and because of this, their expert advice and guidance is inspired by your life. No two clients are the same, and no two clients will be advised the same. Your unique place in life, your personal journey, and the exact position that you are in on this journey will be taken into account, and from there all advice will be tailored and varied to determine the exact services we will offer you to ensure that your unique financial goals are reached.

It may seem like a daunting task to take stock of and financially plan the assets that you have accumulated, but death is not an ‘if’, it is a ‘when’, so doing the necessary groundwork now can reduce burdens of hundreds and thousands of rands for your loved ones. Some pertinent questions to ask your financial advisor should include:

  1. Do I have a will in place?

This is the first step that should be completed whether you have small or large assets. A will establishes how your assets are distributed and without one you will have no control over your wishes upon your death.

  1. Have I designated beneficiaries for all my assets?

This may seem obvious but ensuring that you have properly completed a beneficiary designation form ensures that your assets are transferred correctly and timeously upon your death to the person you have designated.

  1. Have I planned for joint ownership?

A pivotal question when planning your estate, jointly held assets ensure that upon the death of one of the named owners, the assets are passed on the joint owner without the need for laborious court proceedings.

Estate planning is essential to protect those you love, because without a plan in place, the negative repercussions could impact them for years to come. Coming to terms with our own mortality is hard and is usually not something we want to think about. However, if we want our families to be protected and if we want to protect the assets we’ve created, the earlier we start thinking about estate planning the better.

Let the Experts at Maysure advise you on the course of your journey, so that you are free to live your best life, with peace of mind that your legacy is in good hands.