Category Life Insurance

Where there’s a Will, there’s a way

10 June 2020 Roy McMurchie, Head of Fiduciary Services at PPS
Roy McMurchie, Head of Fiduciary Services at PPS

Roy McMurchie, Head of Fiduciary Services at PPS

We live in uncertain times and the events of late are proof of this. Not only are these events uncertain but the timing of them is equally uncertain.

We believe that in times like these it’s important to talk about things that really matter. Benjamin Franklin said, “There are two things in life which are certain, death and taxes” and yet we pay our taxes religiously every month but fail to deal with the “death” side of things.

We often look to financial advisers for assistance with our financial and investment requirements through what is termed a financial needs analysis. However, we fail to address the part which makes it holistic and that is a “financial and estate planning needs analysis”. This is often because we do not want to own up to the fact that we will die, and we believe this will not happen now but rather at some future date. The unpredictability thereof, and the procrastination around this issue, should be addressed sooner rather than later and we encourage everyone to attend to this all-important aspect now before it is too late. If left too late, this can lead to delays and hardship for loved ones, something which can be avoided.

Estate planning starts with a Will discussion and it should not be seen as a once-off exercise. The sooner one looks at this aspect the greater the benefit you, and your beneficiaries, will enjoy from it. There is also peace of mind knowing that this vitally important aspect has been attended to. A startling statistic shows that as few as 14% of South Africans have a valid Will in place and this precludes you from leaving the legacy you wish to leave behind, as the Executor of your estate will need to follow the provisions of the of the Intestate Succession Act. This will likely lead to delays in the administration of your estate and the Executor appointed by the Master of the High Court might not be the one who knows your affairs best.

Your estate plan serves to preserve, increase and protect your assets during your lifetime and to ensure the effective distribution thereof at death, in accordance with your wishes through your Will. Estate planning attempts to eliminate uncertainties over the administration of your estate and to maximise the value of your estate by reducing taxes and other expenses. The ultimate aim of estate planning is determined by your specific goals and these may be as simple or complex as you would like to make them. That said, it is never good to try and “rule from the grave” and we encourage people to reduce the complexity and to facilitate the devolution of your assets at death.

Some other benefits of estate planning include the efficient administration of your estate as well as the appointment of heirs and legatees of your choice. Each person has his/her own unique set of circumstances and you wish to devolve your assets in line with the legacy you wish to leave behind. Liquidity shortfalls are seen in many estates and the estate plan will highlight your liquidity requirements. After all, there is a cost to death.

Estate planning needs to be looked at and addressed on an ongoing basis, particularly after a major life changing event such as marriage, children, grandchildren, divorce or at retirement. In addition, a change in one’s personal financial circumstances should prompt a revision of one’s financial and estate plan. This can be done through your financial adviser.

There is no need to wait for the current events to unfold as this process can be undertaken electronically. We encourage you to take advantage of this time and to address your all-important estate planning and Will needs. We all work so hard to build up an asset base to ensure a comfortable retirement and to leave a legacy in line with our wishes.

Without a valid Will in place, a legacy in line with your wishes is not possible.

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