E ST AT E PL ANNING WHY E ST AT E PL ANNING...BE CAUSE L - PowerPoint PPT Presentation

E ST AT E PL ANNING

WHY E ST AT E PL ANNING...BE CAUSE L IF E HAPPE NS! CURRE NT ST RUCT URE S CHI L DRE N I NSOL VE NCY E MI GRAT I ON BI RT MARRI H AGE OF F SHORE DI VORCE BUSI NE SS ST RUCT URE S RE T I RE ME NT DI SABI L I T Y

WHAT IS E ST AT E PL ANNING  What is it all about ? Pre se rve , inc re a se a nd pro te c t the e sta te pla nne r’ s a sse ts 1. E nsure the mo st e ffe c tive a nd b e ne fic ia l distrib utio n the re o f to b e ne fic ia rie s a c c o rding to pla nne r’ s wishe s 2.  Common misc onc e ption: T ha t it re vo lve s so le ly a ro und the ma king o f a L a st Will a nd T e sta me nt OR T ha t it is pure ly to re duc e e sta te duty  I t is NOT a o nc e -a nd-fo r-a ll a c tivity  I t is a lso NOT a ONE -SI ZE -F I T S-AL L a c tivity  I t is a stra te g ic e xe rc ise , whic h invo lve c o mmitme nt fro m a ll the pa rtie s invo lve d.

̶ ̶ ̶ ̶ ̶ WHO SHOUL D BE INVOL VE D ?  A T E AM: T he E sta te Pla nne r T he c lie nt’ s spo use Ac c o unta nt/ Audito r Atto rne y/ L e g a l Advise r/ F iduc ia ry Spe c ia list F ina nc ia l Advise r

AIMS OF E ST AT E PL ANNING  T o a c hie ve e ffic ie nt de c e a se d e sta te a dministra tio n  T o a ppo int he irs o f c ho ic e a nd distrib ute a sse ts a c c o rding to the c lie nt’ s wishe s  T o pro vide liq uidity  T o pro vide fo r de pe nda nts a nd pro te c t mino r b e ne fic ia rie s / b e ne fic ia rie s with spe c ia l ne e ds  T o minimise impa c t o f ta xe s o n the e sta te  T o pro vide fo r future g ro wth o utside the pla nne r’ s e sta te  T o de a l with b usine ss inte re sts e ffe c tive ly  T o pro vide fo r c lie nt / fa mily’ s uniq ue c irc umsta nc e s  T o ta ke a c c o unt o f o ffsho re a sse ts (if a pplic a b le )  T o de c ide whe the r c lie nt wa nts a living will  Minimise c o sts  E nsure tha t the pla n is pra c tic a l, le g a l a nd e ffic ie nt

E ST AT E PL ANNING – IMPORT ANT CONSIDE RAT IONS  Ac c e pt tha t E sta te Pla nning is a c o mple x ma tte r with ma ny pitfa lls.  I t sho uld a lso a lwa ys b e re me mb e re d tha t e sta te duty is a ta x, a nd a s suc h is sub je c t to c ha ng e a nd mo dific a tio n, like a ny o the r ta x.  E sta te pla n must b e fle xib le to me e t the ne e ds o f c ha ng ing time s.

̶ ̶ RE CE NT T AX CHANGE S T HAT COUL D AF F E CT A CL IE NT ’S E ST AT E PL AN  VAT inc re a se fro m 14% - 15%  Ma ximum E inc re a se fro m 3.99% - 4.03% (if VAT re g iste re d) XE CUT ORS F E E  Y inc re a se fo r dutia b le e sta te s above R30m fro m 20% - 25% E ST AT E DUT DUT IABL E E ST AT E E ST AT E DUT Y RAT E 20% fo r e ve ry R 1 R 0 – R 30 000 000 R 6 000 000 + 25% o f the va lue o f the e sta te a b o ve R 30 000 000 R 30 000 001 and above  AX inc re a se fo r do na tio ns above R30m fro m 20% - 25% DONAT IONS T do natio ns tax fre e inte r-spo usal do natio ns still availab le R100 000 annual e xe mptio n still availab le

T OOL S F OR E ST AT E PL ANNING – T HE L AST WIL L AND T E ST AME NT  One o f the mo st impo rta nt to o ls  Sho uld b e re vie we d a nd upda te d o n a re g ula r b a sis  Advisa b le to c o nsult a spe c ia list whe n dra fting a will  Pre ve nt I nte sta te Suc c e ssio n (dying witho ut a will)  No will – will de la y the winding up pro c e ss, c re a ting ha rdship fo r the fa mily.  T he Ma ste r ma y re q uire the e xe c uto r to pro vide se c urity – whic h I f yo u ma y c re a te a n unne c e ssa ry c o st fo r the e sta te , furthe r de la y in ha ving to ra ise the se c urity.

SUMMARY INT E ST AT E SUCCE SSION Sur vivor / s Rule Spouse and no de sc e ndants T he spouse will inhe r it the inte state e state . De sc e ndant/ s and no spouse De sc e ndant/ s will inhe r it the inte state e state . Spouse and de sc e ndant/ s T he spouse will inhe r it a c hild’s shar e of the inte state e state or R250 000, whic he ve r is the gr e ate st. T he de sc e ndant/ s will inhe r it the balanc e , if any. Both par e nts, but no spouse or de sc e ndants T he par e nts will inhe r it in e qual shar e s. One par e nt and de sc e ndant/ s of the othe r T he sur viving par e nt will inhe r it one - half of the e state , and the de sc e ndants of pr e de c e ase d par e nt the pr e de c e ase d par e nt will inhe r it the r e maining half in e qual shar e s. T wo (2) half- br othe r s r e late d to the de c e ase d T he two half- br othe r s will inhe r it one - half of the inte state e state in e qual shar e s thr ough his pr e de c e ase d fathe r and thr e e (3) [1] and the thr e e half- siste r s will inhe r it the r e maining half of the inte state e state half- siste r s r e late d to the de c e ase d thr ough in e qual shar e s. his pr e de c e ase d mothe r Blood r e lations Blood r e lations in the ne ar e st de gr e e will inhe r it the inte state e state in e qual shar e s.

VAL ID E XE CUT ION OF T HE WIL L – T HE WIL L S ACT  A pe rso n 16 ye a rs o r o lde r tha t is me nta lly c a pa b le o f a ppre c ia ting the na ture o f his a c ts a t the time o f sig ning the will  Witne ss – fro m the a g e o f 14 ye a rs, pro vide d tha t he / she is no t inc o mpe te nt to g ive e vide nc e in a c o urt o f la w  Wha t do the y witne ss ?  MOST IMPORT ANT RE QUIRE ME NT – AL L the witne sse s and the te stator should be pr e se nt at the SAME T IME , whe n the will is signe d !!!!

̶ ̶ ̶ NOMINAT ING T HE E XE CUT OR  Whe re la yma n is a ppo inte d, Ma ste r re q uire s a c e rtific a te fro m a tto rne y/ a c c o unta nt tha t the y will a ssist with the a dministra tio n o f the e sta te  Offsho re a sse ts – e xc lude it fro m yo ur SA e sta te , a nd dra ft a will in the fo re ig n jurisdic tio n, a nd a ppo int a n e xe c uto r in tha t jurisdic tio n  E xe c uto r is e ntitle d to the fo llo wing re mune ra tio n: 3.5 % o f g ro ss a sse ts 6 % o n inc o me a c c rue d & c o lle c te d a fte r de a th PL US VAT @ 15 %, whe re e xe c uto r is re g iste re d a s VAT ve ndo r

IMPORT ANT CONSIDE RAT IONS: MAT RIMONIAL PROPE RT Y RE GIME S  I n Co mmunity o f Pro pe rty  Out o f Co mmunity o f Pro pe rty  Ac c rua l Syste m  L ife Pa rtne r

DIVORCE F URT HE R CONSIDE RAT IONS  Divo rc e o rde r 1. Ma inte na nc e spo use 2. Ma inte na nc e fo r c hildre n Pitfa lls: No mina ting e x-spo use a s b e ne fic ia ry o n life po lic y to c o ve r ma inte na nc e o b lig a tio ns 1. Ma ke pro visio n in Will fo r a ma inte na nc e trust 2. I mpo rta nt tha t divo rc e o rde rs a re dra fte d c o rre c tly in te rms o f Re tire me nt Be ne fits. “Ha s to re fe r 3. to pe nsio n inte re st”

DOME ST IC PART NE RS

DOME ST IC PART NE RS (1)  Re se a rc h sho ws tha t mo re tha n 2,5 millio n pe o ple in SA is living to g e the r.  Ma ny o f o ur la ws ha ve c ha ng e d to re mo ve disc rimina tio n o n the b a sis o f ma rita l sta tus.  Sinc e 2004 ma ny Co urt c a se s de a ling with this issue  De finitio n o f “spo use ” wa s wide ne d a s fo llo ws: SARS De finition “[S]pouse ”, in r e lation to any pe r son, me ans a pe r son who is the par tne r of suc h pe r son— ( a) in a marriag e o r c usto mary unio n re c o g nise d in te rms o f the laws o f the Re pub lic ; ( b ) in a unio n re c o g nise d as a marriag e in ac c o rdanc e with the te ne ts o f any re lig io n; o r ( c ) in a same -se x o r he te ro se xual unio n whic h the Co mmissio ne r is satisfie d is inte nde d to b e mane nt , pe r a nd “mar r ie d”, “husband” or “wife ” shall be c onstr ue d ac c or dingly: Pr ovide d that a mar r iage or union c onte mplate d in par agr aph ( b) o r (c ) shall, in the abse nc e o f pr o o f to the c o ntr ar y, be de e me d to be a mar r iage o r unio n witho ut c o mmunity o f pr o pe r ty;

DOME ST IC PART NE RS (2)  A “spo use ” inc lude s a pe rso n who is the pa rtne r o f suc h pe rso n in a sa me -se x o r he te ro se xua l unio n whic h the Co mmissio ne r is sa tisfie d is inte nde d to b e pe rma ne nt.  F a c to rs tha t ma y indic a te a n inte ntio n o f pe rma ne nc e inc lude :  par tne r s living toge the r in the same r e side nc e  shar ing the same postal addr e ss and bank ac c ounts  de pe ndants or be ne fic iar ie s of the same pe nsion fund, me dic al sc he me and insur anc e sc he me .  Joint owne r ship of asse ts  T ime pe r iod of r e lationship  Will whe r e the par tne r is nominate d as a be ne fic iar y  T he a sse ssme nt o f whe the r a re la tio nship is inte nde d to la st fo r a n inde finite pe rio d, a nd is thus c o nside re d pe rma ne nt, will b e b a se d o n a re vie w o f a ll the fa c ts a nd c irc umsta nc e s a pplic a b le to the pa rtic ula r c a se .