When it comes to estate planning, my goal is to help you protect your assets during your lifetime and ensure they’re managed and distributed according to your wishes after you’re gone. Here’s how we’ll approach your estate plan:

Step 1: Start with the Will

The first step is to make sure you have a valid Will that clearly outlines what you want to happen when you pass away. We’ll review your current Will (if you have one) to see if any updates are needed, especially if your circumstances have changed since it was last drafted.

It’s important to review your Will regularly to keep it relevant, but we’ll focus on planning for the near future and make adjustments as needed over time.

If you don’t already have a Will or choose to have it with another provider, I’ll explain why it’s essential to have one and what can happen without it, but ultimately, the choice is yours.

Step 2: Financial Needs Analysis (FNA)

Next, I’ll conduct a Financial Needs Analysis to see if your estate will have enough liquidity (cash) to cover any debts, taxes, and costs when you pass. This analysis will help us make sure your Will can be executed smoothly without delays or the need to sell off assets.

Step 3: Addressing Core Needs

Based on the FNA, we’ll build a plan to cover four core areas:

1. Liabilities (like a mortgage or car loan)

Before any of your heirs can receive their inheritance, your debts must be settled. We’ll make sure there’s enough life cover in place so your estate can settle these liabilities without having to sell assets. This helps speed up the process and prevents unnecessary stress for your loved ones.

2. Costs in the Estate

Winding up an estate involves costs—like legal fees, executor’s fees, and advertising costs. To avoid any delays, we can set up life cover specifically designed to cover these costs. This way, your estate won’t have to sell assets, and everything can be handled efficiently.

3. Providing for Your Family

If one of your priorities is taking care of your family, we’ll make sure to set aside funds for their needs. Whether it’s providing monthly maintenance for your spouse or children or covering education costs, we can structure your life cover to ensure they’re looked after. This can be done either by providing a lump sum or through regular income payments to your beneficiaries.

4. Costs in the Estate of the Survivor

If you’re married, certain taxes—like capital gains tax and estate duty—may only apply when the last surviving spouse passes away. We’ll plan for this as well, setting up separate cover to handle those costs later, so your family isn’t left with a financial burden.

Step 4: Choosing the Right Products

Once we’ve identified your needs, we’ll find the right products to meet them. Whether it’s life cover to settle debts, cover estate costs, or provide for your family, I’ll explain the best options for your situation.

Why Record Keeping Matters

Lastly, it’s crucial that we keep detailed records throughout this process. This ensures that everything is clear, and you understand how your estate plan is designed to meet your specific needs. It also helps avoid any confusion or errors when it comes time to carry out your wishes.

The goal is to give you peace of mind, knowing that your assets are protected during your lifetime and your loved ones are taken care of when the time comes. If you ever have questions or want to revisit any part of your estate plan, I’m here to help.

The cost of winding up an estate in South Africa can be significant and varies depending on the size and complexity of the estate. The primary costs involved typically include executor’s fees, legal fees, and administrative expenses.

1. Executor’s Fees: In South Africa, the executor is entitled to a fee of up to 3.5% (excluding VAT) of the gross value of the estate’s assets. Additionally, the executor may charge a 6% fee on any income earned by the estate after the death of the deceased.
2. Legal Fees: These are incurred for the drafting of necessary documents, legal advice, and any litigation that may arise during the estate administration process.
3. Master’s Fees: A fee is payable to the Master of the High Court, which oversees the administration of estates. This fee is on a sliding scale based on the value of the estate, but it typically maxes out at R7,000.
4. Valuation Costs: If the estate includes assets like real estate, vehicles, or investments, these may need to be professionally valued, which incurs additional costs.
5. Clearance Certificates: Certain assets, like property, may require clearance certificates from local authorities, which also come with fees. One of the requirements to transfer property is to obtain a clearance certificate from the city council or municipality. This will only be issued if the rates and taxes are paid in advance. Some areas require up to 6 months paid in advance.
6. Advertising Costs: The estate must be advertised in local newspapers and the Government Gazette to notify creditors, which incurs publication costs.
7. Bank Charges: There may be bank charges for managing the estate’s bank account, particularly if the estate continues to earn income after death.
8. Conveyancing attorney fees: The fee charged by the conveyancing attorney when property needs to be transferred.
9. Testamentary trust fees: The fee charged by the trustees to administer the trust you create in terms of your Will, usually to look after the money you leave to your minor children.
10. Advertisement costs: Two advertisements must be placed in a local newspaper and the Government Gazette. Costs will vary depending on the publication selected.
11. Other immediate expenses: Costs associated with arranging a funeral like catering, travel, or other expenses.
12. Tax: One of the executor’s first jobs is to ensure that SARS is paid what is owed to them.

These costs can add up, making it important to plan for them in advance to ensure that your beneficiaries are not left with an unexpected financial burden. Proper estate planning, including life insurance to cover these fees, can help mitigate these costs and ensure that your assets are distributed according to your wishes.

Tax planning is a crucial aspect of your overall estate plan, especially considering the various taxes your estate may be liable for. One significant consideration is that your death triggers a capital gain. This means that, upon your passing, you are deemed to have disposed of all your assets for an amount equal to their market value on the date of death.

As a result, the executor of your estate will need to prepare a post-death tax assessment that includes all capital gains tax (CGT) payable by your estate. It’s essential to note that while all CGT liabilities will be reflected as a liability in the estate, they are not subject to estate duty.

This understanding can help ensure that your estate is managed effectively, minimising potential tax burdens for your beneficiaries. If you have questions about how this applies to your specific situation or need assistance with tax planning, feel free to contact me for a comprehensive review of your estate plan.

Executor’s fees are governed by Section 51 of the Estate Administration Act, allowing executors to charge a fee based on the estate’s gross value: 3.5% plus VAT on the total assets and 6% plus VAT on income collected after the deceased’s death. Executors may also charge fees on joint estates for those married in community of property.

Estate Duty is a tax levied on the dutiable estate, calculated as follows:

Gross Property + Deemed Property – Deductions = Net Estate – Abatement = Dutiable Estate.

The rates for estate duty are 20% for estates valued under R30 million and 25% for those over that threshold.

The implications for common long-term insurance policies include:

• Personal Life Policy: If the policyholder is the client and the beneficiary is the estate, it is considered a deemed asset in the estate, subject to estate duty unless bequeathed to a spouse, where a Section 4(q) deduction applies.

• Buy-and-Sell Policy: Typically included as a deemed asset; however, if structured correctly, it may avoid estate duty.

• Key-Person Policy: Generally included as a deemed asset, but may be exempt if specific criteria are met.

• Retirement Funds: Excluded from estate duty under Section 3(2)(i), unless disallowed contributions were made post-March 2015.

• Flexible Investment Options and Share Portfolios: Included in the estate, with potential deductions if payable to a spouse.

• Loan Accounts: Treated as assets in the estate, with applicable deductions if bequeathed to a spouse.

This FAQ serves as a quick reference guide. For tailored advice regarding executor’s fees, estate duty, and long-term insurance policies, contact me here so we can discuss your unique estate.

Succession planning for farmers is a comprehensive process designed to ensure the smooth transfer of farm ownership, management, and assets to the next generation. It plays a crucial role in preserving the family legacy, securing financial stability for both retiring farmers and their heirs, and ensuring the long-term survival of the farming business. Key challenges such as high land values, retirement funding, and distributing assets fairly among family members make this planning essential.

A detailed succession plan includes several key components:

• Asset Ownership and Valuation: Properly listing and valuing assets such as land, equipment, livestock, and debts is crucial. Ensuring agreements and ownership structures are in place helps guide fair inheritance and simplify the process.

• Family Involvement and Objectives: All family members should be part of discussions to understand their goals and desires for the farm. This helps define roles and prevents future disputes, especially when some family members are not involved in farming.

• Business Structuring and Restructuring: Farmers must decide how to structure or restructure the farm business for smoother ownership transitions. This could involve forming legal entities such as trusts or partnerships to streamline asset transfers, secure financing, and ensure the farm’s long-term viability.

• Legal and Tax Considerations: Understanding estate duty, tax laws, and property transfer regulations is vital. A well-structured plan can minimise tax liabilities, protecting the farm’s financial health and reducing the estate’s exposure to unnecessary costs.

• Gradual Transition of Management: Training and mentoring the next generation to take over leadership responsibilities ensures a seamless transition. Assigning clear roles and preparing successors over time helps avoid disruptions when the time for full management transfer arrives.

How can I ensure fairness when passing the farm to one child while treating non-farming children equally?

It’s common for farmers to face the challenge of passing their business to one child who is actively involved in farming, while ensuring fairness to other children who pursue different career paths. Since the farm is often the most valuable asset and cannot easily be divided, options like life insurance policies are often used to equalise the inheritance for non-farming children.

However, there are limitations. For example, insuring a farmer for the full value of the farm multiple times may not always be possible due to underwriting restrictions. A more balanced approach might be to assess the contributions of each child and consider their involvement in building the farm’s value. It’s also important to remember that fairness doesn’t always mean an equal amount of cash – each child’s unique situation should be considered.

What are buy-and-sell agreements, and how can they help in farm succession?

A buy-and-sell agreement is a common solution that allows a child actively involved in the farm to buy the farm from the estate, ensuring other children receive cash instead of shares in the business. For instance, the involved child can take out life insurance on the farmer’s life, and the proceeds from that insurance can be used to buy the farm when the farmer passes away. This ensures liquidity in the estate to divide among the other heirs while keeping the farm intact under the management of the farming child.

What is a bequest price, and how does it work in farm succession?

A bequest price is a condition in a will that allows a child to inherit the farm on the condition that they pay a specified amount to the estate. This ensures that the other heirs receive their portion in cash. The child inheriting the farm can use life insurance to fund this bequest price, ensuring that they have the funds available to meet the conditions of the inheritance while keeping the farm in the family.

Should I follow popular trends in estate planning, like the ‘one-year usufruct’ strategy?

Be cautious about trendy estate planning strategies like the “one-year usufruct,” which may seem attractive but can pose significant risks. For example, if certain conditions are not met, or if family members pass away unexpectedly, the plan could fall apart, leading to higher tax liabilities or unintended consequences for the estate. Instead, stick to well-established, long-term strategies that offer flexibility and cater to different possible outcomes.

What are the risks of placing my farm in a trust for estate planning purposes?

Placing a farm in a trust can offer protection from creditors and estate duties, but it can also create complications, especially when multiple children are beneficiaries, but only one is involved in farming. This may lead to situations where the farming child has to rent the property from the trust or even face pressure to sell the farm if other beneficiaries demand it. Careful structuring of the trust and its rules can help prevent these issues.

How can I protect my farm from being sold to cover debts after I pass away?

Many farms are heavily bonded, and if the farmer passes away, creditors may call in the loans. Without a solid financial plan in place, the heirs may be forced to sell the farm to cover these debts. One way to prevent this is through contingent liability cover or a buy-and-sell agreement, which ensures that enough capital is available to pay off the bonds, allowing the farm to remain in the family.

What role does life insurance play in succession planning?

Life insurance plays a crucial role in ensuring liquidity for your estate, covering debts, equalising inheritances, or funding buy-and-sell agreements. However, insurance must be structured appropriately, keeping in mind factors like estate duty and tax implications. While life insurance can help facilitate a smooth transition, its primary purpose should be to protect against specific financial risks, not to create wealth.

In conclusion, succession and estate planning for farmers is a complex but essential process. By considering the unique needs of your family and farm, involving all family members in discussions, and using structured financial strategies, you can ensure the long-term viability of your business and protect the family legacy for generations to come.

Section 7C of the Income Tax Act pertains to the taxation of trusts, particularly focusing on how the deemed donation of a loan account is treated for tax purposes. It effectively addresses situations where a taxpayer lends money to a trust. Under this section, if the interest charged on the loan is lower than the official rate set by the government, the difference between the official rate and the actual interest charged is considered a deemed donation. This can lead to significant tax implications for the taxpayer, as the deemed donation may exceed the annual tax-free donation limit. The introduction of Section 7C has raised concerns regarding the practicality of using trusts for estate planning, particularly for those looking to create wealth outside their personal estates while minimising estate duty. As a result, estate planners must reconsider how they structure trusts and utilise loan accounts to achieve their financial and estate planning goals effectively.

Trusts continue to be an effective tool for addressing various estate planning challenges. Below are several scenarios illustrating their ongoing relevance.

A: Alternatives to Usufructs

Problem:
Usufructs grant one person (the usufructuary) the right to use property owned by another (the bare dominium holder). While beneficial for reducing estate duty, this arrangement can lead to complications. For example, a farmer may leave his farm to his son while granting a usufruct to his spouse. This requires the son to seek his mother’s consent for transactions, limiting his independence and ability to build wealth. Moreover, the spouse cannot sell the property without the son’s agreement, trapping them in a restrictive situation.

Solution:
Establishing an inter vivos trust allows the son to become a trustee and beneficiary, managing the farm for all involved. This arrangement enables him to operate the farm without constant approval from his mother. Life insurance can also be arranged within the trust to cover the mother’s living expenses, ensuring that any remaining assets benefit the other beneficiaries after her passing.

B: Solutions for Diminished Mental Capacity

Problem:
Caring for individuals with limited ability to manage their affairs poses significant challenges, particularly regarding financial needs.

Solution:
Creating a trust with the individual as a beneficiary allows appointed trustees to manage both personal and financial affairs. It is essential to ensure that adequate funding is available for both the trust and the individual’s needs, which can be supported by life insurance.

C: Protection for Minor Children

Problem:
In complex family structures, minor children require protection if one or both parents die, especially if there are concerns about the other parent’s ability to manage the inheritance.

Solution:
Establishing a trust to manage the child’s inheritance ensures that funds are allocated appropriately for the child’s welfare. This trust can remain in place even after the child reaches adulthood, helping manage assets such as property and potentially reducing future estate duty liabilities.

D: Estate Planning and Wealth Creation for Future Generations

Problem:
Section 7C complicates the creation of loan accounts for trust funding, making it challenging to build wealth outside the personal estate.

Solution:
A trust can receive the R100,000 annual tax-free donation (up to R200,000 between spouses), allowing wealth to accumulate over time. Additionally, structuring the will to transfer growth assets to the trust while utilising life insurance for estate duty provides a proactive approach to estate planning, benefiting future generations.

Conclusion

Trusts play a vital role in modern estate planning, extending beyond merely reducing estate duty. The focus should be on creating straightforward, manageable structures that cater to the needs of all parties involved while fostering long-term financial well-being. By considering the practical applications of trusts, estate planners can facilitate smoother transitions for heirs and establish legacies that endure beyond tax considerations. Life insurance remains a key component in ensuring liquidity and addressing costs associated with effective estate planning.

The solutions above are merely examples of why trusts are a valuable estate planning tool. However, there are reasons why they may not be the best option in all situations. Since everyone’s problems and situations are different, I advise you to contact me for a more in-depth conversation regarding the pros and cons of estate planning tailored to your specific needs.

Local and offshore trusts serve as essential tools for estate planning and asset protection, but they differ significantly in their formation, structure, and tax implications.

Formation and Structure

1. Local Trusts:

   • Established under South African law, a local trust is formed when the founder (also known as the donor) enters into an agreement with the trustees through a trust deed.
   • The trust is then registered with the Master of the High Court, which issues a Letter of Authority to confirm the trustees’ authority to act on behalf of the trust.
   • Local trusts are governed by contract law, and the trustees hold legal title to the trust property for the benefit of the beneficiaries.

2. Offshore Trusts:

   • Offshore trusts are set up in foreign jurisdictions and begin with the settlor instructing a trust company to form the trust, often outlined in a settlement deed.
   • These trusts are recognised under Common Law and feature dual ownership: the trustee holds legal title, while the beneficiaries hold beneficial ownership.
   • A key distinction is that the settlor cannot serve as a trustee, which requires full divestment of control over trust assets.

Key Parties Involved

Both types of trusts involve:

• Founder/Donor/Settlor: The individual establishing the trust and determining its beneficiaries.
• Trustees: Responsible for administering the trust and acting in the best interest of the beneficiaries, both local and offshore trusts require trustees to uphold a fiduciary duty.
• Beneficiaries: Individuals who benefit from the trust.

Offshore trusts also include a protector, appointed to oversee the trustees and potentially veto certain decisions.

Funding Methods and Tax Consequences

Funding a trust can involve donating assets or providing loans. The tax implications differ:

• Local Trusts:

  • Donations above R100,000 annually may incur donations tax at rates of 20% or 25% for amounts exceeding R30 million.
  • Interest-free loans are deemed donations if the interest rate falls below the official rate, incurring further donations tax.

• Offshore Trusts:

  • Similar funding structures apply, but South African Revenue Service (SARS) may classify funding transactions as affected transactions, impacting tax treatments.

Income and capital gains are taxed differently in local and offshore trusts. Local trusts face a flat tax rate of 45% on taxable income, whereas offshore trusts typically do not incur taxes in tax-friendly jurisdictions if income is retained within the trust.

Non-Resident Beneficiaries

Non-resident beneficiaries receiving benefits from a foreign trust may face tax implications based on their home country’s laws. It’s crucial for them to seek specialised tax advice to navigate these complexities.

Death of the Founder/Settlor

In both local and offshore trusts, if funded by a loan account, the loan remains an asset in the deceased’s estate, subject to estate duty. However, growth within the trust remains outside the personal estate, providing significant estate duty savings.

Reporting Requirements

Establishing offshore trusts does not allow for asset concealment. Reporting obligations under FATCA and the Common Reporting Standard (CRS) require disclosure of settlors, beneficiaries, and other parties exercising control over trust assets. Failure to report can lead to penalties and fines.

Voluntary Disclosure Program

SARS offers a permanent voluntary disclosure program for taxpayers to declare offshore assets, assisting in rectifying tax affairs. However, if SARS discovers undeclared assets first, penalties will apply.

In summary, while both local and offshore trusts provide avenues for asset protection and estate planning, understanding their unique characteristics and implications is essential. Consulting with a legal adviser is recommended to tailor a trust strategy to individual needs and circumstances, allow me to assist you with the process of setting up your Trust.

The accrual system, introduced by the Matrimonial Property Act 88 of 1984, allows couples to retain separate estates while still sharing in the growth of their assets accumulated during the marriage. This arrangement is particularly beneficial for those entering marriage with existing debts or significant assets, as it protects both parties from the liabilities of the other.

What is the accrual system in an antenuptial contract?
The accrual system allows couples married out of community of property to share the growth of their estates during the marriage. It ensures that the net increase in each spouse’s estate is considered at the time of divorce or death, allowing the spouse with the smaller estate to claim a share of the growth from the other spouse’s estate.

Why should couples consider an ANC with the accrual system?
Couples often choose an antenuptial contract (ANC) with the accrual system to protect their individual assets and effectively manage debts. This arrangement offers financial security by allowing each spouse to maintain separate estates while still sharing in the benefits accrued during the marriage. Importantly, when married out of community with accrual, one spouse’s debts do not impact the other. Each partner remains responsible for their own financial obligations, fostering greater protection and financial independence. This structure not only safeguards individual assets but also enhances peace of mind in the relationship.

How is the accrual calculated?
The accrual is calculated by determining the net value of each spouse’s estate at the time of dissolution, subtracting any liabilities and the declared commencement values from the ANC. The difference between the two net values is then divided, resulting in an accrual claim for the spouse with the smaller estate.

Accrual Calculation Steps

1. Net Value Calculation:

   • Total Assets: List all assets at dissolution.
   • Liabilities: Subtract any debts from total assets.
   • Commencement Value: Deduct the commencement value from each estate, adjusted for inflation.

   Net Value of Estate=(Total Assets−Liabilities)−Commencement Value (adjusted)
   

2. Accrual Claim Determination:

   • Identify which spouse has the larger estate.
   • Calculate the difference in net values.
   • Divide the difference by two for the accrual claim of the spouse with the smaller estate.

   Accrual Claim=(Value of Larger Estate−Value of Smaller Estate) / 2​​

Waive of ANC accrual and Inheritance

It’s important to remember that the specific provisions of your ANC can significantly influence the outcome of your estate planning. For example, a spouse may choose to waive their accrual rights; however, such a decision could be regarded as a donation and may have serious financial implications. Consulting with a financial planner or legal professional is advisable before making such choices.

Inheritances received during the marriage are typically excluded from the accrual calculation unless expressly included in the ANC, ensuring that individual contributions to each estate remain protected. While changing the terms of an ANC after marriage is complex, it can be possible with mutual consent and legal guidance.

Is it possible to modify the terms of an ANC after marriage?
While changes to an ANC are generally more complicated after marriage, it may be possible to amend terms with both parties’ agreement and proper legal procedures.

How does the law protect against fraudulent actions concerning the accrual?
In cases where one spouse may try to conceal assets or manipulate the accrual system through trusts or other means, courts can “pierce the trust veneer” and ensure equitable treatment during the accrual calculation.

Conclusion: The Role of Estate Planning in Managing Accrual Rights

Understanding the accrual system in antenuptial contracts is essential for couples looking to secure their financial futures while maintaining individual asset protection. Estate planning plays a vital role in preparing for death and ensuring that the accrual party’s interests are safeguarded. It can provide peace of mind and help structure the distribution of assets effectively.

Benefits of Using Life Insurance for the Accrual Claim

Utilising life insurance to pay the accrual claim offers several benefits:

• Liquidity: Life insurance provides immediate liquidity, allowing the surviving spouse to settle the accrual claim without needing to sell assets or liquidate investments.

• Financial Security: By ensuring the surviving spouse has access to funds, life insurance can help maintain their standard of living and provide stability during a difficult time.

• Estate Preservation: Using life insurance to cover the accrual claim can preserve the deceased’s estate for other beneficiaries, ensuring that assets are passed on according to the deceased’s wishes.

For a comprehensive assessment of how the accrual claim could impact your financial situation, contact me now so we can see what the accrual claim would be. Together, we can create a robust plan tailored to your unique circumstances.

When it comes to implementing insurance products for you as a business owner, my goal is to ensure that your family business continues to thrive after your passing and that the financial burdens are minimised for your heirs. Here’s how I would approach this:

1. Evaluate Your Current Business Structure and Ownership

We’ll start by understanding the structure of your business, including whether you have partners or if the business is entirely family-owned. This will help determine the type of insurance policies that best fit your needs.

2. Determine the Value of Your Business

Knowing the value of your business is critical in deciding the amount of life insurance and other coverage you’ll need. We’ll evaluate how much liquidity is required to cover estate duties, debts, and other financial obligations, such as capital gains tax (CGT), upon your death.

3. Implement a Life Insurance Policy

I’ll help you put in place a life insurance policy that provides enough liquidity to cover any estate taxes and other liabilities without forcing the sale of business assets. This will allow your heirs to inherit the business without having to scramble for cash.

• Ownership: We can explore setting up the policy through a trust, ensuring the proceeds go directly towards covering estate taxes and securing the business, preventing creditors from accessing the funds.

4. Set Up a Buy-Sell Agreement (if you have partners)

If your business has co-owners or partners, implementing a buy-sell agreement is essential. We’ll set this up using life insurance, so that if you pass away, your partners have the funds to buy out your share of the business from your estate.

• Cross-Purchase Agreement: Your partners will take out life insurance on you, and upon your death, they will use the proceeds to buy your share of the business.
• Entity-Purchase Agreement: Alternatively, the business itself can take out a life insurance policy on you, and when you pass away, the business uses the proceeds to buy back your shares from your heirs.

5. Key Person Insurance

If you play an essential role in the daily operations of your business, we’ll implement key person insurance to provide the business with liquidity in the event of your passing. This will allow the business to cover any immediate financial needs, such as hiring new management or covering operational expenses during the transition.

• Purpose: The policy proceeds can be used to keep the business running smoothly, ensuring that there is no financial strain on your heirs or the business itself during the transition.

6. Protect Against Disability and Critical Illness

While death is a key part of estate planning, it’s also important to consider the possibility of disability or critical illness. By setting up disability and critical illness insurance, we ensure that the business and your family are financially protected if you are no longer able to manage the business.

• Disability Insurance: Provides income replacement for your family and covers business overheads, ensuring the business remains operational.
• Critical Illness Insurance: Provides a lump sum payment that can be used to cover medical expenses or business operations if you become critically ill.

7. Trust-Owned Life Insurance (TOLI)

We’ll explore setting up a life insurance policy within a trust. This trust will own the life insurance policy, and the proceeds will be distributed according to the terms of the trust, ensuring your heirs and the business are protected. It also ensures that the proceeds are shielded from creditors.

8. Address Estate Taxes and Liquidity Needs

The life insurance policies we put in place will be designed to provide enough liquidity to cover estate duties, CGT, and any outstanding debts without forcing the sale of the business or personal assets. This protects the long-term viability of the business and ensures your heirs are not financially burdened.

• Liquidity Insurance: We can also implement a specific liquidity insurance policy, dedicated to covering estate taxes and financial obligations, so that your business stays intact.

9. Ensure Family Business Continuity

By aligning the insurance policies with your estate plan, I’ll ensure that your family’s interests are protected, and the business stays within the family or transfers to the successors you choose. We’ll work to ensure that there is a clear, financially supported succession plan in place.

10. Regular Review and Updates

Finally, estate planning isn’t a one-time event. As your business grows and changes, we’ll regularly review the insurance policies to ensure they continue to meet your needs and that your family and business are fully protected.

By carefully selecting and structuring these insurance products, we can ensure that your business continues to flourish after you pass away and that your family’s financial future is secure. However, without proper structuring, these products could lead to excessive tax liabilities. Incorrect beneficiary nominations, policy ownership issues, wrong premium payers, or improperly calculated coverage amounts can all contribute to hefty tax bills and complications for your family or business.

Would you like to schedule a conversation to explore these options further? Contact me now to review your current business policies and ensure they are structured effectively to protect both your family and your business from unnecessary tax burdens. Let’s make sure your estate plan works in your best interest.

Upon the death of a person, the estate must be reported by an interested party to Master’s Office in which jurisdiction the deceased normally lived, within 14 days.

The reporting documents will differ slightly depending on the value of the estate and the type of appointment required.

If the value of the estate exceeds R250 000, letters of executorship must be issued and the full process prescribed by the Administration of Estates Act must be followed.

However, if the value of the estate is less than R250 000, the Master of the High Court may dispense with letters of executorship and issue letters of authority in terms of Section 18(3) of the Administration of Estates Act, (Act 66 of 1965).

The Magistrates’ Office service points will only have jurisdiction if the deceased did not leave a valid will and the gross value of the estate is less than R125 000 where there is no PEAS ( Paperless Estates Administration System).

Letters of authority entitle the nominated representative to administer the estate without following the full procedure set out in the Administration of Estates Act.

What documents will be required in the event of the value of the
estate exceeding R250 000?

• Completed Death Notice (afr or eng) form – J294 (pdf)
• Original or certified copy of the Death Certificate
• Original or certified copy of Marriage Certificate (if applicable) or acceptable proof of marriage, as requested by the Master. Marriage certificate/proof of registration of a customary marriage/ minutes of a family meeting where proof of registration of a customary marriage cannot be furnished /proof of religious marriage (Muslim or Hindu)/declaration confirming the existence of a same-sex life partnership (if applicable)
• A Declaration of Marriage by the Surviving Spouse indicating how the deceased was married
• All original wills and codicils or documents purporting to be such (if any)
• Completed Next-of-Kin Affidavit – J192 (if the deceased did not leave a valid will)
• Completed Inventory form – J243, showing all the assets of the deceased
• Nominations by the heirs for the appointment of an executor in the case of an intestate estate, or where no executor has been nominated in the will, or the nominated executor has died or declines the appointment.
• Completed Acceptance of Trust as Executor (eng) forms in duplicate by the person(s) nominated as executor(s) (form J190) plus a certified copy of the photo page of the executors ID document
• Undertaking and bond of security – J262 (unless the nominated executor has been exempted from providing security in the will, or is the parent, spouse or child of the deceased)
• If the deceased passed away before 2007: Affidavit by the next-of-kin of a deceased person who has died without leaving a valid will, to the effect that the estate has not already been reported to another Master or service point (if applicable)

• Note the “Letter of Executorship” must be obtained from the Office of the Master.

Reporting documents where the value of the estate is less than R250 000

• Completed Death Notice (afr or eng) form – J294
• Original or certified copy of the Death Certificate
• Original or certified copy of Marriage Certificate (if applicable) or acceptable proof
  of marriage, as requested by the Master. Marriage certificate/proof of registration of a customary marriage/ minutes of a family meeting where proof of registration of a customary marriage cannot be furnished /proof of religious marriage (Muslim or Hindu)/declaration confirming the existence of a same-sex life partnership (if applicable)
• A Declaration of of subsisting marriages
• All original wills and codicils or documents purporting to be such (if any)
• Completed Next-of-Kin Affidavit  – J192 (if the deceased did not leave a valid will)
• Completed Inventory (form – J243) showing all the assets of the deceased (Proof of the value of the assets must be provided)
• List of creditors of deceased (if applicable)
• Nominations by the heirs for the appointment of a Master’s representative in the case of an intestate estate or where no executor
  has been nominated in the will or the nominated executor declines the appointment.
• If the deceased passed away before 2007: Declaration confirming that the estate has not already been reported to another Master’s office or Service Point of the Master.
• Acceptance of Master’s Directions – J155 (eng), completed and signed by the person as nominated above.
• Certified copy of the ID of the person to be appointed as Master’s representative.
• Note the “Letter of Appointment as Master’s Representative ” must be obtained from the Office of the Master.

The above-mentioned reporting documents must be posted to, or handed in at the Master’s Office.   Faxed reporting documents are not acceptable.

* Update to Master’s fees in deceased estates and curatorships: Administration of Estates Act: Regulations: Amendment(English/Afrikaans) GG 41224, GoN 1161, 3 Nov 2017

Appointment procedure:

If the above documents have been completed correctly and lodged with the Master/Magistrate (whatever the case may be):

• A file is opened in the name of the deceased.
• The documentation is perused by an examiner for correctness.
• The will (if any) is considered by the assistant Master and either accepted/rejected.

PROOF OF THE EXISTENCE OF A CUSTOMARY UNION OR ALLEDGED SAME-SEX PARTNERSHIP
Proof of marriage or an alleged permanent same-sex life partnership must be lodged in all instances where such relationship is indicated in the death notice; except in instances where the surviving spouse or same-sex life partner is an heir in terms of a valid will. The following documents constitute acceptable proof:

(a) An original or certified copy of the Marriage certificate must be lodged where a civil marriage in terms of the Marriage Act, or a marriage or civil partnership in terms of the Civil Union Act, or a customary marriage duly registered in terms of the Recognition of Customary Marriages Act is indicated.

(b) In the case of customary marriages registered after the death of one of the parties, proof of registration issued by the Department of Home Affairs may be accepted as an alternative to a marriage certificate.

(c) Where proof of registration of a customary marriage cannot be lodged, and such proof is required only for purposes of succession, and provided there is no dispute regarding the existence of the customary marriage, a family meeting can be convened by the Master to confirm the existence of the alleged customary marriage.

d) Where the deceased was a husband in more than one customary marriage, any of which was entered into after 15 November 2000, a copy of the contract which regulates the matrimonial property system of the marriages, duly approved by court, in terms of section 7(6) of the Recognition of Customary Marriages Act must be lodged.

(e) If the deceased was married in terms of religious rites without compliance with the Marriages Act (Muslim and Hindu marriages) proof of the marriage from the Muslim Judicial Council or similar religious body or person who performed such marriage, must be lodged.

(f) Where a permanent same-sex life partnership is alleged in the death notice, and the estate is to devolve intestate, an affidavit (form MBU 19) must be lodged as confirmation of the alleged partnership.

The Service Point of the Master can assist with further advice in this regard. When a certificate of registration cannot be lodged, please contact the Master’s Office further guidance with regards to the available remedies. The abovementioned reporting documents must be posted to, or handed in at the Master’s Office or service point.

https://www.justice.gov.za/master/deceased-how.html#DEORS