by Tobias | 24.May.2016 | Estate Planning
Estate Planning and Handling Best Left To a Legal Specialist Abraham Lincoln is credited with a phrase that has since gained the status of a proverb. The 16th president of the United States is said to have uttered words to the effect that any man who acts as his own lawyer has a fool for a client. The comment was, of course, intended to cast doubts upon the wisdom of such a decision, given the complexities of the law, rather than to imply diminished intellect. Almost everyone is likely to concur with “honest Abe’s” sentiment and be only too happy to accept legal counsel if faced with a serious criminal charge. However, when it comes to estate planning and handling, a significant number of individuals are inclined to believe that they are competent to manage this equally critical task in person. We live in an age in which vast volumes of information on every imaginable topic is freely available to anyone who has access to a personal computer and an internet connection. Much of that information is accurate and of direct value to an enquirer, while some is less so. Unfortunately, a significant quantity of online data can also be misleading and even totally erroneous. Legal advice is considered by many to be unduly expensive and, to address their needs, a number of companies are now providing legal self-help facilities via their websites. The services consist largely of legal forms for every conceivable purpose, including estate planning and handling, which may be purchased and downloaded together with guidelines on how to complete them. In the Unites States, this document...
by Tobias | 06.May.2016 | Estate Planning
The Administration of Deceased Estates in South Africa Most people are aware of the importance of making a will and the need to appoint someone who is responsible to act as the executor. Beyond that, however, unless they have already served in the capacity of an executor, they are unlikely to know a great deal about the actual administration of deceased estates and may also be distracted by stress and grief when called upon to undertake this process. In South Africa, where the individual concerned has drawn up a valid will, the process will then be governed by the terms of the Administration of Estates Act, 66 of 1965. Where no such will exists, the terms stated in the Intestate Succession Act, 81 of 1987 will apply instead. Another contingency which may have a bearing on the process is whether the individual responsible for the bequest passed away within the Republic or whilst visiting or living in another country at the time of his or her death. Finally, depending upon whether the total value of the deceased individual’s estate is less than R200 000 or more than this, the required process will differ, with that applicable to the larger amount becoming proportionately more complex. In the latter instance, the process begins by applying to the Master of the High Court for a letter of executorship, upon receipt of which, one is then required to advise the South African Revenue Services (SARS) and any other relevant institutions of the death. Thereafter, a minimum of five further steps will be required before an executor is legally permitted to begin distributing the...
by Tobias | 06.May.2016 | Trusts
Trusts can Protect your Assets and Assist with Estate Planning A simple search of the dictionaries and online sources will quickly reveal that there are a variety of ways in which they define a trust. Unfortunately, most of these definitions are couched in legal terms that can present difficulties for the layman. Perhaps the simplest way to describe it is as a relationship in which an individual, referred to in legal terms as the trustor, allocates the right to manage his or her property and financial assets to a second party. This may be an individual or a group. Known as the trustees, the latter undertake to protect and manage these assets on behalf of one or more third parties chosen to be the trust’s beneficiaries. In essence, these are legal instruments that provide an effective means to protect various assets both during the lifespan and following the death of the trustor and could, for instance, be the means to ensure that a financial legacy is maintained and continues to provide its benefits throughout the life of the beneficiaries and perhaps even beyond. When a bequest is made without such a provision, there is a risk that it may fail to provide the benefits that the deceased intended. This is commonly the case with minor children and young adults who may simply perceive their inheritance as a windfall and have little experience of how to use it productively. Trusts guard against just this type of contingency and can be tailored to ensure that its proceeds provide the maximum benefits. For example, the trustees may be instructed to dispense a...
by Tobias | 11.Apr.2016 | Estate Planning
A Task Best Left to the Professional Deceased Estate Administrators The loss of a spouse or partner is, in itself, a sufficiently traumatic event. It is, however, a situation that can prove even more so in the event that the bereaved is not sufficiently prepared to handle the financial practicalities that have become the inevitable accompaniment to death in our modern society. Winding up a deceased estate is a process that is clearly defined in law and one that is required to proceed according to a sequence of essential steps for which the responsibility will reside with the appointed executor. The latter may be a family member or a firm of professional executors as indicated in the deceased’s will once validated by the Master of the High Court. Whether assigned to an individual or to an official body, such as a bank or a trust company, the duties of the executor remain the same. These may be summarised as assuming control over the various assets that comprise the estate with the overall aim of protecting and preserving them. The first practical step in the procedure will be to identify, locate and notify each of the beneficiaries named in the will. In some cases, this may involve tracing the individual names and perhaps hiring a specialised agency to do so. Any expense involved must be covered by the executors, but may be recouped later from the proceeds of the deceased estate. In addition, the law entitles the executor to levy a fee that, excluding VAT, must not exceed 3.5%* of the total value of the estate’s assets. Before finally undertaking...
by Tobias | 11.Apr.2016 | Trusts
What Are the Main Benefits of Establishing a Trust Fund? Today, most South Africans, everywhere from Pretoria to Pofadder, are aware that estate duty, capital gains tax and the sundry costs that may arise from handling a deceased estate can severely erode the ultimate value of an inheritance. It can thus minimise the benefits that accrue to the intended beneficiaries. However, this is not the only reason why one should consider taking steps to protect it. In this respect, trust funds can prove to be the perfect instrument with which to protect those assets intended to help your loved ones, as well as making the entire process of planning your estate a safer and more efficient option than simply relying on a basic will. In principle, setting up a fund offers the individual a means to ensure that his or her beneficiaries will enjoy an ongoing income that is designed to provide them with long-term security. It is therefore preferable to willing them a capital lump sum which, unless managed with care, could prove to be of a relatively short-term benefit to the inheritors. Planned with care and depending upon the total value of the bequest, investing in a trust fund offer one the means to ensure a legacy that has the potential to endure for several generations. Death, unfortunately, follows no timetable and it is therefore essential to make early provision for the welfare of a spouse and particularly for one’s children. In the latter case, they are unlikely to have the experience to manage their inheritance effectively and it is in precisely this type of situation that...
