Estate planning forms an important part of your financial planning for when you are no longer around. While a sombre thought to think about, estate planning will ensure that your dependents receive their inheritance as per your will and are taken care of to the standards you would desire when you are not here. 

Proper estate planning will not only cover the drawing up of your will but can also include other important aspects such as a marriage contract and taxes that may have an impact on how your assets are distributed. Estate planning will also ensure that all your financial obligations are covered adequately in the event of any shortfalls and that estate duties taxes are reallocated to the most appropriate assets to reduce estate tax duty costs. 

Statistics show that over 70% of South Africans fail to plan their estate adequately thereby leaving their dependants in a difficult position to manage any shortfalls should the unforeseen occur.  Reviewing your estate plan at regular intervals is, therefore, necessary to ensure that there is sufficient liquidity available to provide for these expenses as well as to ensure your details are up to date to avoid any unnecessary confusion and delays at a time where we would desire for the process to be finalised as quickly as possible.

This review is usually done in conjunction with the review of your financial plan with the help of your financial advisor or a legal representative and is recommended to be done every three or five years or when a significant event occurs that may potentially alter the contents of your estate plan such as the following life events:

  • New birth or adoption in the family.
  • If there is a change of circumstances or the death of the guardian in your will where there are minors involved. 
  • If the number of your dependants have increased or decreased.
  • If there is a marriage or a divorce in the family.
  • Where there is illness or a recent disability that has occurred.
  • Where the need arises for educational funding for children or grandchildren.
  • Major changes in your career whether you have acquired a new job or recently suffered a job loss.
  • Where there has been a notable appreciation in investments.
  • The acquisition of a new property.
  • Any debt that may have accrued over time.
  • Making sure that all policies such as life and insurance policies are updated with all the necessary details and that basic details such as your name, ID number, place of address etc. are as accurate as possible as even small deviations can cause significant delays in the execution of your estate plan.

Providing for our family when we are no longer here is a significant part of how we handle our finances in the here and now. Proper planning and making use of the many financial educational tools that we have at our disposal (many of which are free) will enable us to plan better for the future. 

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