An estate plan has many moving parts that must work together to achieve a pre-determined set of succession goals.
Effective estate planning involves making full use of the mechanisms available to you when structuring your affairs and planning the transference of wealth to your loved ones. Like a cog, an estate plan has many moving parts that must work together to achieve a pre-determined set of succession goals.
On the other hand, where an investor has not nominated a beneficiary for their living annuity, note that the proceeds will be paid into the deceased estate, and while not attracting estate duty, the executor is permitted to charge fees on the value of the assets. In calculating the appropriate level of life cover required, it is therefore important to take into account factors such as how much debt would need to be covered in the event of your death, your estate duties and taxes, and the extent to which you would need to provide for your loved ones. Insufficient liquidity in your estate may result in your executor having to realise assets otherwise intended for your heirs.
When it comes to reducing estate duty, transferring immovable property into an inter vivos trust ensures that any growth in the value of the property is contained within the trust and does not accrue in your personal estate. However, saving on taxes and estate costs should not be the overriding reason to form an inter vivos trust, and the estate planner must be clear about their intentions before forming a trust.
As such, if you intend to make special bequests in your will, it is vital to ensure that there is sufficient liquidity in your deceased estate to honour those bequests without needing to realise assets intended for one’s heirs.
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