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This is a challenging topic as it requires us to embrace the reality of our own mortality.  This is difficult, but worth it as to live conscious of our own mortality encourages us to live our lives more fully.  Proper end of life planning also empowers and protects our loved ones.  It’s one of those things that is simple and difficult.  I invite you to embrace the challenges.

Death can be an expensive event: COSTS OF DYING

  • Estate Duty (The first R3 500 000,00 is exempt from estate duty. If the deceased is married, no estate duty is payable until the surviving spouse dies. Roll-over applies and the first R7 000 000,00 is exempt from estate duty. There are deductions that may apply, but if no deductions are applicable, estate duty of 20% is charged on the balance of the estate.
  • Capital Gains Tax: Death is an event that triggers capital gains tax on any properties you own (less primary residence exclusion) and on shares.
  • Income Tax: Amounts owed to SARS as at date of death, and for funds earned after death.
  • Property transfer costs: Conveyancing fees, Deeds Office Fees and postage and petties are payable. No transfer duty is payable if property is transferred in terms of a will.
  • Executor’s Fee: The tariff cost to wind up an estate is 3.5% + VAT of 15%;
  • Master’s Fee: The fee is determined by the value of the estate. The maximum fee payable to the Master is R7 000,00.

It is important to take out a life policy to cover these costs, as well as funeral costs. Doing so will avoid the situation where your beneficiaries have to sell assets to pay for the costs consequent to death.

The most effective way to protect your assets and save taxes and costs is to have a will carefully crafted. There is a misperception that exists that only very wealthy people need to have a will. In South Africa, 70-80% of people die without a will. The truth is that everyone over the age of 16 should have a will to protect their property and the best interests of their family.

Why is a well-crafted will a good idea?

It gives us a measure of control over our assets after our death. A will empowers you as you to choose your executor (the person you wish to honour your wishes). This is a decision to be taken carefully to ensure that your estate is wound up quickly and your wishes are honoured.

A well drafted will enable you to state your Intentions clearly. You can choose your heirs. You can also ensure that assets bequeathed to your loved one only goes to your loved one and do not have to be shared with partners/spouses. Provisions can be included to keep funds within your family, in the instance where a beneficiary is insolvent. Lastly, should your beneficiaries be minors, you can create a trust to be set up to look after their assets until they are old enough to do so themselves.

A well drafted will includes clauses that will save your family costs and prevent squabbling. How? Some examples are:

A collation clause ensure that assets given to loved ones during your life are excluded from your estate.
a clause excluding the need for security for your executor. The cost of a bond of security is 0,5% of the value of your estate. This is required by the Master unless your will stipulates that security is not required.

What happens if you without a will?

If someone dies without a will, they are deemed to have died intestate.  The Master may appoint an executor or family members may make application for an Executor to be appointed. This can be a lengthy process.

The main issues of dying intestate is that you are not able to choose your executor or your heirs. The Laws of intestacy apply. Your assets will go to your spouse. If you don’t have a spouse, they will go to your children. (Note: If your children are minors, the funds will be controlled by the Guardian’s Fund until your children reach the age of majority. This is administratively cumbersome). If you don’t have children, they will go to your parents, and then to other family members. Furthermore, you are not able to take into consideration the needs of your loved ones.

The allure of a free will:

Banks and many companies offer free wills.  These free wills frequently come at great cost to your family.  Important provisions are excluded, and there may be a dire lack of estate planning, which could be very costly for your beneficiaries.

Furthermore, there is often a great deal of anonymity about who your executor is. This makes is difficult for your loved ones to keep track of the process.

An unusual invitation to create a death file:

When I meet with people and assist them with their will, I invite them to really consider the practical consequences of their death. I suggest that they create a death file. I encourage them to include their will, financial advisor’s details, policy details, banking details, facebook passwords, and any other information that will assist their executor to wind up the estate. In my experience as an executor, the more information provided to an executor, the quicker the winding up process.

I ask my clients to consider designing their own funeral service. It is an enormous gift to grieving loved ones to not have to make practical arrangements during a very sad time.

I also ask my clients to stipulate if they wish to be buried or cremated. If they wish to be buried, I ask them to state where they wish to be buried and if they wish to be cremated, I ask them to state where they wish their ashes to be scattered.

I also encourage them to leave letters of wishes for their loved ones that deal with practical things like pets, and other intimate parts of their lives. Lastly, I recommend that they sign a living will.

What is a living will?

This is a document that speaks for you when you can’t. It is only implemented if you are in a situation where there is no reasonable prospect of recovery.  It states that you don’t wish for your life to be prolonged artificially by feeding or medication. It states that you wish to be pain free, even if pain meds hasten your death.

To have a will properly crafted requires us to embrace the reality of our own mortality.  We all wish to leave a legacy.  A carefully constructed will enable us to do so. Should you already have a will, you are welcome to email a copy through to me so that I can review it and let you know if all of the important clauses are included and best interests of your loved ones are protected.

Please contact us at, on (021) 671 5454 or on 083 412 4540 if we may be of any assistance.

Yours faithfully
Michelle Dommisse