Estate Planning and Administration

Working closely with our tax department, our Estate Planning Attorneys assists various individuals, especially members of our firm’s corporate clients with their estate planning. Taking into consideration the assets of the estate and the commercial interests of our client, including shares in a company, membership interest in a close corporation, our estate planning attorneys utilise our knowledge gained from years of experience to, not only achieve optimal commercial and tax benefits but, also providing for the client’s family before and after death.

Our estate administration attorneys have developed a streamlined approach to ensure that beneficiaries and executors are assisted expeditiously and effectively during the administration of a deceased estate and in accordance with the wishes of the deceased.

We are sensitive to the fact that the administration of a deceased estate can be a complex and uncertain exercise for appointed executors and beneficiaries alike. As a result, our estate planning attorneys take all the required steps to ensure that a deceased estate is reported and administered as speedily as possible.

WHAT IS ESTATE PLANNING?WHAT ARE THE OBJECTIVES/ BENEFITS OF ESTATE PLANNING?WHAT SERVICES ARE PROVIDED UNDER ESTATE PLANNING?Administration of Estates

Estate planning is legal mechanisms used to ensure a client’s property rights are secured and that their estate is dissolved upon their death in accordance with their wishes.

Estate planning can be utilised to ensure continuity of commercial interests where the client was a member, shareholder or director to ensure the commercial interest continues to benefit his estate or family.

Many clients wonder if it is worth it to engage in estate planning. Hereunder we provide a non-exhaustive list of the objectives and benefits of estate planning:

  • Obtaining optimum tax efficiency and growth of the client’s estate during his or her life time;
  • Ensuring the wishes of the client is maintained at his or her death ;
  • Ensuring efficient deceased estate administration;
  • To elect or appoint heirs, legatees and beneficiaries (in the case of trusts created) of the estate in accordance with the client’s wishes;
  • Provide liquidity of the estate;
  • Provide for and protect minor beneficiaries;
  • Use structures to legally minimise the taxation on the estate of the client after his or her death;
  • Provide for continuity and growth of the assets of the client after the death of the client;
  • To account for offshore assets in the estate of the client; and
  • To minimise costs.

We offer the following services under estate planning:

The establishment and management of trusts

Trusts are established through registration with the Master of the relevant High Court to safeguard and preserve the client’s assets and commercial interests for the future benefit of its family, including the descendants of the client.

Registering holding companies

Where a client’s needs may require the mechanisms provided through the registration of a company, we advise our clients on the benefits of a holding company. The implementation of a company in a client’s financial structure, if utilised effectively, can provide a client with various tax benefits.

The drafting of wills

A will is utilised as the first document of evidence in determining how an estate is to be devolved upon the death of the individual making the will (“the testator”). Without a valid will in place, the testator’s estate will devolve intestate, which means the law will dictate to whom and in what proportion the assets of the estate will devolve. For any testator’s family and intended beneficiaries and legatees, the consequences of not having a valid will can be devastating as the wishes of the testator may not be carried out in intestate succession.

The testator and their spouse will also need to decide if they wish to enter into a joint will which is the two separate wills of spouses written in one will, covering aspects such as simultaneous death, family obliteration and massing of estates. If there are minor children the parents of those children should make provisions for the appointing of guardians for their minor children in the instance where both of them die simultaneously.

Failure to appoint a guardian will leave the children in the custody of the state. In the same light, trustees should be appointed in the will of the parents of minor children. A trustee is not to be confused with an elected guardian and is appointed to administer the estate inherited by minor children. Where a trustee is not appointed the minor children’s cash inheritance will be paid over to the Master of the High Court’s Guardian Fund for safekeeping.

WHAT IS THE IMPORTANCE OF A WILL?

GIVE EFFECT TO THE TESTATOR’S WISHES
When a person passes away without leaving a valid will the distribution of that person’s estate is governed by the Intestate Succession Act 81 of 1987. It is possible for a person to die completely intestate or partly intestate depending on the drafted will. To ensure that a person’s estate devolves in accordance with his or her wishes, it is of utmost importance to have a valid will. It is further of utmost importance that the will complies with the prescribed formalities of the Wills Act 7 of 1953.

Where the will does not so comply, the deceased’s estate will not be distributed in accordance with his or her wishes. The draftsman of one’s will must, therefore, have thorough knowledge of testamentary law in order to ensure that the wishes of the testator are given effect to and can be lawfully enforced.

LIMIT FAMILY FEUDS

A properly drafted will can limit family disputes subsequent to the testator’s passing. Where the testator’s wishes are not reduced to writing but reliance is placed on verbal communication which it can lead to family feuds and the unnecessary delaying of the administration process of an estate.

MINOR CHILDREN
Of great importance is the consideration of a nominated guardian and the administration of funds to be distributed where there are minor children. Failure to appoint a guardian or to stipulate that funds bequeathed to minor children be held in trust until the child reaches majority or a prescribed age may not seem as important when only one of the parents passes away but it can be catastrophic where both parents passes away simultaneously or within a short period after one another.

Where a guardian is not appointed, minor children will fall in the care of the state and if bequeathed funds are not held in trust, such funds will be held in the Guardians Fund administered by the Master of the High Court.
DIFFERENT TYPES OF WILLS
Differentiation must be made between single wills, joint wills, testamentary trusts and living wills.

SINGLE WILL
A single will is where only one person is the testator or testatrix to a will. Only that person’s estate is therefore provided for in the instance of his or her passing.

JOINT WILL
A joint will is a single document containing the wills of two or more persons. In most cases a joint will is between two spouses who can outline their wishes should one of them pass away before the other and in particular what is to happen when both parties pass away simultaneously.

TESTAMENTARY TRUST
A Testamentary Trust is a trust contained in a will and is usually preferred where minor children are involved. A testamentary trust provides that the trustees have the powers and discretion to administer the bequests as made to the trust.

LIVING WILL
A living will is a document containing a person’s wishes should that person no longer be able to make decisions due to mental and or physical illness.

WHEN IS THE RIGHT TIME TO DRAFT A WILL?
<strongIn terms of section 4 of the Wills Act every person of the age of sixteen years or more may draft a will. The only provisions are that the person is mentally capable of doing so and understands the nature and effect of the contents of the will.

The drafting of a will is unfortunately often one of the last priorities of a person due to the unpleasant connection to the traumatic events associates therewith. Unless a person is comfortable with the fact that he or she will have no say over who receives his estate upon his or her passing, the aforementioned should be discouraged. It is advisable to have a will in place in the following instances:

  • When parties enter into a marriage or re-marry it is important to draft a will in order to include your spouse as a beneficiary should this be the testator’s wish.
  • When getting divorced it is important to update your will or draft a new will should the testator and or testatrix no longer wishes for the previous spouse to be a beneficiary to their respective estates.
  • When children are conceived, it is important to ensure that the children are provided for when one or both parents pass away.
  • Starting a company or expansion of business interests.
  • Acquiring assets.
Asset restructuring and management

We are able to advise on the best options regarding the management of assets after the death of the client. We shall gauge the client’s wishes and determine if any assets should be restructured, by, for example, converting close corporations to private limited companies or establishing inter vivos A decision is then made on whether the client shall personally hold the assets in his name or if the assets will be bought by the client’s company or trust.  Depending on the structure decided upon, we assist the client to register a trust and/or holding company.

After consulting with the client’s financial advisors or brokers our estate planning attorneys will also consider the optimum growth of the client’s assets and any adjustments to be made to current investments, retirement annuities and/or provident funds. We shall, in consultation with the client’s financial advisor or broker, advise on insurance to provide income in the unfortunate event of unexpected death or disablement.

Offshore structures
The implementation of offshore structures is considered for a client in the case where such structure may benefit the client who is an immigrant to South Africa or an emigrant of the country. In addition,

if any other foreign country’s legislation will regulate how the client’s estate will be devolved the will of the client will need to be drafted to meet the requirements of the foreign jurisdiction.

Tax planning
In order for our clients to obtain optimum tax efficiency and growth of his or her estate during his or her life time, we utilise the available legal framework to implement a structure which will best suit the client’s needs.
We furthermore explain the tax consequences that may occur at a client’s death including donations tax, income tax, capital gains tax and estate duties and advise our client on proposed legal mechanisms to restructure the assets of the client to ensure the minimum tax is payable on the death of the client to ensure greater prosperity for their beneficiaries.

Business planning
Our attorneys firstly ensure that they understand the nature and scope of a client’s business. There after we shall determine the client’s wishes with regards to the businesses he is involved with and consider the legal mechanisms available to realise them.

Such mechanisms often include buy-and-sell agreements and key person insurance agreements in instances where the client holds shares in or is a key person of a company.

Share scheme options and employee benefits
We assist our clients in determining and advising whether they should cede, exercise or defer their share options. In order to ensure that our clients receive the maximum benefit, our attorneys assist the client to structure their pension funds, provident funds and group life benefits.

This will be done in consultation with the individual’s financial advisor or broker (if applicable). We can also assist to ensure the beneficiaries recorded on the life insurance policies, trust deeds and group life funds are in accordance with the client’s wishes from time to time.

The administration of one’s estate can be regarded as one of the most important phases of a person’s lifetime as it determines the distribution of the hard work of a person during his or her lifetime. The importance of ensuring that one’s estate is administered in terms of one’s personal wishes and preferences starts with the planning of one’s estate while still alive. Many people do not regard their estate planning as an important aspect but when one realises that this process, in essence, will determine how an entire lifetime of hard work is distributed the importance comes to light. The first phase of the administration of an estate is the drafting of a will.

This is to ensure that the winding up of the estate is finalised as quickly and effortlessly as possible and that the preferences and desires of the deceased are adhered to. The process for the winding up of a deceased estate is governed by the Administration of Estate Act 66 of 1965. If not understood, this process can become complicated and lengthy. It is therefore advised that nominated executors appoint a competent attorney to act as the executor’s agent and attend to the administration of the estate.

When must an estate be reported?
An estate must be reported at the Masters offices or Magistrates Court, where applicable, having jurisdiction within 14 days from the date of death of the deceased. The jurisdiction is determined by having regard to the deceased’s ordinary place of residence prior to his or her passing away.

What documentation is required to report the estate?
The documentation required is prescribed in terms of the Administration of Estates Act and must all be in the prescribed form.
These are the following:

  • Inventory
  • Death Certificate
  • Will
  • Marriage certificate
  • Antenuptial agreement
  • J190-Acceptance of Trust as Executor in duplicate;
  • Executrix(es)/Executor(s) Certified ID Copy;
  • J294-Death Notice;
  • Marriage declaration form;
  • Declaration that estate has not been reported to any other Master’s office;
  • J 238- Letters of Executorship in duplicate
Who can report an estate?
An estate can be reported by any of the following individuals:

  • The surviving spouse or surviving partner (who is registered in terms of a civil union) or in the event that there is no surviving the nearest relative.
  • A person in control of a premises where the death occurs.
  • If the death occurred outside of the republic any person residing within the republic having possession or control of the property.
When to consult an attorney for assistance with administrating an estate?
If an attorney has been nominated in a will as an executor of an estate, a consultation should immediately be scheduled with that attorney. An attorney can also be consulted even though the attorney is not nominated by the deceased to act as an executor. The attorney can be appointed by the nominated executor to act as his or her agent and attend to the administration process.

The advantage of appointing suitably experienced attorneys to act as agent for the executor is that such an attorney will have the required knowledge and resources to finalise the administration process, which can be very cumbersome and time-consuming, in less time.

ATTORNEYS

ANDRIES GERHARDUS TRUTER

DIRECTOR


ZOE WORT

JUNIOR DIRECTOR


CHANIQUE COLLET-SERRET

JUNIOR ASSOCIATE


ELOISE CILLIERS

JUNIOR ASSOCIATE

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