The Basics of Estate Handling and the Importance of Proper Planning

Estate planning precedes estate handling and only if you have taken the necessary steps to plan for the future will it be possible to ensure that your personal assets are managed according to the wishes as stated in your will.

An estate can take the form of:

  • Personal estate that comes into effect upon the death of the person and is managed according to the wishes stated in the person’s will.
  • Assets within a trust – which is a legal instrument for the protection of assets to the benefit of beneficiaries where the estate is handled by the trustees.
  • Estate for retirement fund benefits.
  • Trust for purpose of property agreements.

Professional estate planning takes into account that a person’s life entails many events of which some may be good and others bad. As such, the planning should be flexible enough to cater for specific needs of the person at the set time.

It is essential to follow a strategic plan to ensure that the long term goals of the estate can be reached. The planning should not only be flexible, but make provision for long-term requirements. As part of this process you will need to set up a will and should review such every two years, unless there have been changes in your financial status, the beneficiaries or your wishes. Note that your will covers your personal assets. It does not extend to assets that have already been transferred to a trust for your family or appointed beneficiaries.

If you are married within community of property, your will cannot express any instructions on your spouse’s portion of the estate. For instance, you cannot instruct for the property, of which you are both owners, to be sold and the proceeds to go to your children. You can only state your wishes regarding your share of the property.

Note that you can have two wills when you have offshore assets though it isn’t necessary. The one will then deal with the offshore assets and the other with your South African-based assets.

Important aspects of a family trust to remember

  • Appointed trustees must manage the trust properly with due care as they can be held accountable for any losses that the trust experiences because of their mismanagement.
  • Trustees must meet annually to make decisions regarding the trust.

It is essential to maintain objectivity as trustee and to ensure that the personal assets and assets in the trust remain separate. A well-planned estate plan will make provision for expenses related to estate handling, such as the winding up process, as the lack of sufficient funds for such may mean that the beneficiaries have to sell some of the assets to cover the expenses. One way to make provision for adequate funds is to take out life insurance as the proceeds can be used towards expenses related to estate handling.

Don’t get caught off-guard, but instead plan ahead by getting expert advice on trusts and estate handling from our experienced lawyers. Our services include tax planning, off-shore structures, succession planning, trust establishment, and guidance regarding property purchases.