Archive for the Estate Planning Category

The danger of appointing an Executor who faces a conflict of interest

We hear a lot nowadays about the importance of avoiding a conflict of interest, and a recent court case illustrates, somewhat dramatically, the effects of an unresolved conflict. This case is Elena van Niekerk v Kathleen van Niekerk and the Master of the High Court 2011 (2) SA 145 (KZP). Mr Basil van Niekerk divorced his wife Kathleen in 1987, and in 2005 travelled to Russia where he married Elena Karipova in Volgograd according to Russian law. Returning to South Africa, the couple got married in 2008 under SA law by ante-nuptial contract. Read on

Retirement Fund Deductions: One door closes, another opens

According to the 2011 Budget Review, 1 March 2012 will see the introduction of a new dispensation for permissible deductions towards retirement funds. There is a clear twofold message behind these changes, particularly when read together with the taxation of lump sum benefits:

– higher income earners will have to make additional provision for retirement outside of tax incentivised retirement funds; and

– retirement fund benefits are intended to provide annuities at retirement and not tax free lump sum benefits on withdrawal and retirement.

Read On …

Estate Planning Essentials

The dangers of an unsigned will and intestate succession.

A will is essentially a contract one enters into with the person one wishes to take charge of dealing with all one’s assets (and liabilities) after one dies.  A non-existent, unsigned or incorrectly signed will can cause practical problems and place surviving family members and dependants under immense stress when one is not around to assist them in making financial decisions. Read on….

Estate Planning Essentials – The Farmer and his Will – Part 3

This edition of Estate Planning Essentials is the last in a 3 part series and looks at some of the practical issues that farmers face, concerning their estates.   Read on…

Estate Planning Esentials – The farmer and his will

A farmer’s will often tries to accomplish the equal treatment of family members, yet the wording of a will often leads to unenforceable wishes and major liquidity shortfalls in the estate.
Issues that need to be discussed in full with the farmer before the will is drafted are:  Read on…..

Estate Planning Essentials – Estate planning for farmers

Estate planning is specifically important where a family business is involved, especially when the family business is a farm. Certain practical issues are often not taken into consideration when dealing with the complexities of the estate of a farmer as a business owner. The following three-part series of Estate Planning Essentials will look at these issues and the impact thereof on the farmer’s estate. Read on…

Estate Planning Essentials – Budget 2010

This year’s pre-budget anticipation did not go entirely unrewarded. While the budget speech itself contained very little by way of change, it was a comment included in Chapter 5 of the 2010 Budget Review which has caused the biggest stir.

With regard to research proposals for possible attention in the tax proposals for 2011 and 2012 the following comment was made:  “Taxes upon death Both estate duty and capital gains tax are payable upon death, which is perceived as giving rise to double taxation. Read on…

Estate Planning – The New R3.5 million Abatement

The 2009 Taxation Laws Amendment Bill will introduce a new way of applying the R3,5 million estate duty abatement and with it, significant and unexpected estate duty savings for some estates.

In this issue of Estate Planning Essentials we look at the technical background to the amendment as well as at some of the considerations which should be taken into account when reaching a decision regarding the use of the abatement as an estate planning tool. Read on….

Important considerations on the death of a family member

The recent untimely death of a friend highlighted the need for an answer to the question – Joe’s just died, what do we do now?  Death is not something we like to think about but we need to make sure that our affairs are in order, so that surviving family members are not caused further undue and totally unnecessary hardship.

Here are a few practical steps to assist you…..  Read on

RA’s are still a good estate planning tool

Using a retirement annuity provides a viable alternative to traditional estate planning instruments. Here are ten estate planning reasons to look at RA’s this retirement annuity season.

Traditionally, clients wanting to provide for a surviving spouse with the benefit of added estate duty relief would look at creating a usufruct as their instrument of choice. Read more

In recent years, developments on three fronts have reduced the attractiveness of a usufruct:

Estate Planning Essentials – Executor’s Fees

The Administration of Deceased Estates Act allows an executor to charge fees up to an amount of 3,99% (including VAT) on the gross asset value of the estate.

Clients typically do not negotiate executors’ fees upfront, but rather leave surviving family members to deal with this issue after death – if at all.  Most executors will only consider a reduced fee if requested by the beneficiaries. Read on

Estate Planning – Things you need to know when using the R3.5m abatement

The R3.5m abatement amount is a useful technique when structuring a client’s will but should not be used blindly, without due consideration.

Estate planning involves building a strategy and putting the underlying structures in place to assist with the accumulation, preservation and distribution of a client’s assets. Once the relevant structures have been established, implementation of the strategy takes place over time and is not a once-off event.

Then setting up the strategy it is necessary to take into account both the assets in the client’s estate as well as current legal and tax legislation.  Read on

General mistakes planners make when drawing up a Will

In this issue we look at the drafting of Wills and some of the general mistakes people make – some of which can
have serious practical implications. A badly drafted Will may cause delays in the winding up of the estate, in some
cases even resulting in rifts among the beneficiaries. Read on


In this issue of Estate Planning Essentials – the third and last in a series on Trusts – we look at the “ugly”. The “ugly” being where a Trust fails and the Trust assets form part of the planner’s personal assets.

Only when it’s too late!

The planner or his estate will typically only discover that his Trust is wanting when it is attacked by:

  • a creditor,
  • a disgruntled spouse, or
  • SARS, in the case of income tax (for arrear taxes where assets still vest in the planner) or estate duty (Section 3(3) (d)).

 When will Trust assets be exposed? Read on 

Estate Planning Essentials – Trusts – Negative Perceptions

This issue of Estate Planning Essentials is the second in a series of three on Trusts. In this issue we look at some of the negative perceptions around Trusts. Read on