The state of your estate

One certainly wouldn’t be wrong for assuming that estate planning involves the drafting of a Will and indicating one’s preference between burial and cremation. The reality, however, is that the winding up of a deceased estate can take anywhere between 8 months and 3 years, with many loved ones left in the aftermath wading through unpaid bills, standing in queues at the Master’s Office or searching for dated insurance policies from companies that last existed three mergers ago. Over and above the all-essential Will, there is so much more to putting your financial affairs in order, regardless of your age, health status or life expectancy.

Funeral and burial wishes

Although most people document their funeral wishes in their Will, this isn’t necessarily the most practical place to catalog your requests. Depending on the timing and/or circumstances surrounding one’s death, it is possible that one’s Will is only read after the funeral takes place. To give full expression to your funeral and burial wishes, consider drafting what is known as a Letter of Wishes which details your desires regarding exactly what you’d like to take place in the days following your death. Whilst not a legal document, it can be considered a gift to your loved ones who would undoubtedly appreciate your guidance on such personal matters. When emotions are running high and your family is grieving, even a simple task such as choosing the funeral hymns can be seemingly overwhelming.

Paying for the funeral

Depending on the funeral package that is chosen, a funeral can cost anything from R7 000 to R70 000, and your loved ones will need access to sufficient funds to cover these expenses. When a person passes, their bank accounts are immediately frozen which means that your loved ones will not be able to access your accounts. In general, funeral parlours won’t agree to recover funeral costs from the deceased’s estate because they have no guarantee that the estate is solvent. If you have a life insurance policy in place, speak to your financial planner about including a funeral benefit which will pay out within 48 hours of your death. Alternatively, you can set aside an emergency fund in a family member’s bank account to ensure that the cost of your funeral is provided for and that the funds can be easily accessed if you are not around.

Your Executor

If you have a valid Will in place, you will no doubt have appointed an Executor to your Estate. This person could be someone known to you (such as your spouse or sibling) or a firm of attorneys or accountants. The Executor performs a vital role in winding up your estate and distributing your assets to your nominated heirs, so it is strongly advised that you appoint someone with sound financial and administrative skills. To assist the Executor in wrapping up your affairs, we advise that you have the following documents in safe-keeping and that your spouse or close family are aware of them:

Your Will: Double-check your Will to make sure that it is dated and signed, because without these two vital components your Will is not valid, meaning you could die intestate. Secondly, make sure that you destroy all copies of previous Wills, as the presence of a previous Will could cause unnecessary confusion and heartache.

Your beneficiaries: Although most of your beneficiaries will be listed in your Will, other beneficiaries may have been nominated in terms of your insurance policies. Part of an Executor’s function is to draw up a complete list of all your beneficiaries and heirs, together with their ID numbers and contact numbers. To expedite this process, draft a simple document that provides all this information in central place.

Your bank accounts: Most people nowadays operate more than one bank account. To avoid the Executor having to search for your banking information, prepare a list of all the accounts in your name, the account numbers and any PIN or login numbers associated with these account.

Your property: The Executor will need the title deeds of all properties in your name. Applying to the Deeds Office for copies of title deeds could delay the process, so we advise that you keep a copy of all title deeds, as well as all vehicle registration papers, in your files in the interests of smoother administration.

Insurance policies: If you have insurance policies in place, make sure that you have clearly nominated your beneficiaries. The proceeds of these policies will be paid directly to your beneficiaries and will bypass the estate administration process. Retain a copy of your insurance policies so that your loved ones know exactly what policies you have in place and to whom the proceeds are intended.

Your financial planner and financial plan: Retain the latest copy of your financial plan, as well as your financial advisor’s details close on hand. Depending on the size of your estate, your passing may trigger a Capital Gains Tax event which your financial planner would have made you aware of in your financial plan. Either way, your Executor will benefit from being able to consult with your financial planner when wrapping up your financial affairs.

Investment documents: Make a list of all your pension funds, retirement annuities, share portfolios or living annuities together with policy numbers. Your Executor will need to conduct a search for all investments registered in your name in order to complete the Liquidation and Distribution Account.

Memberships: Another way to expedite the winding up process is to leave a list of all memberships and accounts that would need to be closed. This would include the likes of gym membership, petrol cards, medical aid membership, clothing accounts and cell phone contracts.

Your creditors: In terms of South African law, all creditors of a deceased estate are to be paid in full before the estate is distributed amongst the nominated heirs. This means that, before the Executor can apportion your estate to your loved ones, he needs to know if there is anyone that your estate owes money to. A simple way of bypassing this process is to compile of list of creditors and their contact details in your file.

Organ donation: Ensure that your loved ones are aware of your membership with the Organ Donation Foundation, and that the contact details are readily available.

Your life online: Even the most intrepid techno-phobe has little chance of departing this world without a life on-line. Whether it be internet banking, an Amazon.com account, a blog site, Facebook, Twitter, chat rooms or full-time online gaming, the chances are that you have an online presence which will need to be dealt with sensitively on your passing. Compile a list of all online accounts, user names and passwords. Nominate a technically savvy person that you trust implicitly to manage the closure process of your online presence in a sensitive manner.

Estate planning is so much more than just drafting a Will. It’s about creating a legacy that is indelibly you. As John Allston once said, “The only thing you take with you when you’re gone is what you leave behind.” Taking control of your estate planning while you are alive is one of the greatest favours you can perform for those to whom your legacy is intended. Prepare today to ensure that, in the aftermath of your passing, your loved ones can spend time celebrating your life and appreciating the legacy that you worked so hard to gift.

Have a blessed day!

Sue

Estate Planning

There’s so much more to effective Estate Planning than your Will.

 

 



Categories: Financial Planning

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