The question of what happens after you’re gone is all too often overlooked, considering the inevitability of your death. Estate planning should be seen as a life-long responsibility of updating and adjusting the strategy to ever-changing conditions, rather than leaving matters to chance or the courts.
Then you need to prepare well if your goal is to end well. The good news is that preparation to ensure that your loved ones are cared for according to your wishes is never too late to start.
Sometimes, once you’re gone, the best way to continue is to think of this as a mechanism to ensure that your properties are transferred to the people of your choice. Doing so theoretically requires the use of various instruments and mechanisms that might apply, ranging from a will to local or offshore trusts, to contributions and the use of attorney rights, during your lifetime or after your death.
We remind customers that the preparation of their estate is not cast in stone, but might be an organic technique that adapts over time. And it can pay off several times over by using an expert to manage some of the nuances.
Where to start?
The simple starting point is to take stock of the legacy that you want your heirs to have.
In South Africa, where we have freedom of choice that allows you to bequeath your properties to whoever you please, this is less complicated. By comparison, inheritance laws in some countries require that such properties must be allocated to your descendants according to their degree of blood relationship to you.
There are four types of assets to include in evaluating the assets, locally or abroad.
For example, direct and indirect assets in your will may be accommodated, in this context, indirect assets apply to the ownership of shares in a private company or the interest of a shareholder of a neighbouring organisation.
Those belonging to trusts, your pension and life plans are the properties that cannot necessarily be bequeathed in your Will.
Trusts have estate planning and other advantages, but also add some complexities of law and governance that must be taken into account in your planning, and for which you can seek expert advice and assistance. In your will, you will not bequeath trust properties, but you can probably appoint successful trustees or make trust bequests. Similarly, pensions can currently be excluded from estate duties and executor’s fees, but require up-to-date nominating forms instead of being dealt with in your Will to ensure the transition to your expected beneficiaries.
Navigate the complexity
We like to show how complex it can be when addressing estate planning with new costumers, which can help us evaluate if the family can accommodate in the execution of their estate planning needs.
Usually, clients who fall at the lower end of the complexity scale would like to provide a straightforward and easy plan that seeks to reduce their tax liabilities while they are alive and ensure that assets are passed to their descendants after their death in an orderly yet uncomplicated manner.
Clients and families who can cope with a complex estate planning policy, potentially using various structures locally and offshore, are at the opposite end of the scale. In such a situation, the aim is to ensure that assets located around the world are adequately controlled in order to manage tax exposure and to reduce different risks during and after your lifetime. You will make a more educated decision on the level of advice and expertise you need and the level of difficulty with which you and your family can live in the execution of your estate plan by determining where you believe you fit on the scale. In my opinion, introducing something that is too complicated for your needs and that might not be understood by you or your family, as this can only lead to confusion and disappointment.
For purposes other than changes in your personal circumstances, you will need to be prepared to modify the schedule. For example, you must be prepared to continually tweak or modify them as you use systems that are prone to changes in law so that your tax planning remains optimal and compliant. If you are change-averse by default, then the more complicated choices for estate planning will not offer you and your family peace of mind, but rather cause anxiety.
And, if you want to use legal frameworks, to see if they still work with the scheme, they should also be checked periodically. They warrant greater attention, by their very existence, to detail and compliance with complex tax and regulatory regimes.
Therefore, the duty to ensure good governance in the development and running of your trust is serious.
It’s a family affair
Estate planning in isolation does not and should not happen. When everyone is clear about your priorities and wishes surrounding your estate, you will have much more harmonious family relationships. So, in conversations about your plans and your desires, including your spouse, partner, children and their children. Rather, make your preparations clear beforehand, to avoid any complications or misunderstandings later.
When the partners and spouses of your children are clear about where they fit into your plans, clear and simple communication will also foster healthy family dynamics. It goes without saying that if you have dependents who are minors and thus not yet legally entitled to obtain their inheritance, or if you have heirs with special needs, special arrangements are required.
Compliance is everything
For South African families scattered across the globe, handling so many intricacies takes on additional significance. In multiple jurisdictions, variations in tax and regulatory concerns almost definitely require the assistance of sector experts to assist with the execution of the estate plan.
This expert advice theme is a recurring one, particularly when your estate spans several jurisdictions and uses more complicated structures. When you start contemplating the many different laws and how they can affect your properties, the advantages of having a trusted attorney to call on become obvious. In each jurisdiction that can affect your proposal, it is vital to ensure that you take competent advice. Having a partner who will assist you in executing your strategy properly is more critical than being made aware of the nuances.
Look beyond the now
Although many people speak of taking a holistic approach to estate planning, identifying basic holes in the plans of consumers is not unusual. This may be due to bad suggestions or an inability to follow the strategy because it’s too difficult or overwhelming. It may be planning to fail to prepare, but failure to execute would be sure to fail.
The value of working with experts in estate planning is that as they take care of the details, you can concentrate on the big picture. Information such as recognising and implementing existing regulations in all jurisdictions, and ensuring that all processes continue to be compliant.
It is much simpler to prepare the whole process and execute a proper succession plan with the help of a trusted advisor who has knowledge of your wishes and your relatives, such as for the execution of your estate or for the trustees who will be responsible for managing your local legacy in the future. In order to ensure that your desires are carried out efficiently and effectively, having these experts to rely on would also simplify the safekeeping of records.
We have found the most successful way to ensure that your estate plans are well laid out and carried out.
People seem to be reluctant to speak about death and dying, but life is a reality. It’s just a matter of when, not if, and it’s important to make sure that everyone is happy with the process that will take place after your death.
It also helps family dynamics to hold conversations in a far more comfortable atmosphere than when a tough situation is already being dealt with. It will allow your family to cope with the transition that will come and to imagine what kind of life they will live after your death if you make these tough conversations a way of life. This helps alleviate some of the ambiguity of a period that is still vexed and uncertain.
So, help your family prepare for the change that will take place on your death and ensure that you will leave a remarkable legacy and end well.
