The administration of deceased estates is a pleasure when proper estate planning has been done. Without sound planning, things can easily become messy and, in many cases, result in a redistribution agreement. If the heirs cannot reach a consensus, issues may arise. I’ve personally seen how families can fall apart over pots and pans.
There are several definitions of estate planning, but according to the expert Meyerowitz, it is the arrangement, management, safeguarding, and structuring of a person’s estate assets.
He explains that it should be done in such a way that the individual ensures the optimal and ongoing use of those assets for himself, his family, and other beneficiaries during his lifetime, as well as for his family and beneficiaries after his death.
Estate planning is a specialised field in its own right, but I’ll briefly explain why it’s so important.
The first question is whether you know exactly what makes up your estate and what its value is. This is critical and forms the starting point of the estate planning process. Once you’ve determined what’s in your estate, the next step is setting clear goals.
I want to emphasise that estate planning should not be focused primarily on tax savings, as this can be risky, because legislation can change overnight. Tax certainly plays an important role, but other objectives include ensuring that your spouse and dependents are cared for, avoiding disputes among family members, and ensuring the continuity of farms, businesses, and investments.
A practical and executable will form an integral part of a solid estate plan and make the administration process much easier.
Another question is whether you know what your estate costs will be, and whether you’ve made provision for them in time.
In addition to the executor’s fees, there are also income tax, estate duty, capital gains tax, and transfer duties typically payable. And don’t underestimate the effect of the accrual system. If your estate does not have enough liquidity, assets may have to be sold. Correct business structures also play an important role.
Consult an expert today to avoid unpleasant surprises.