4 Misconceptions about the need for estate planning

Why is it that so many income earners in the country do not have a valid will in place? Is this indicative of a lack of understanding? Do South Africans really understand the value that having a valid will can add to the lives of their intended heirs? Or is it that many people simply don't feel it's relevant for them to have? Or all of the above?

Daniel Stoch, Senior Risk Specialist at Discovery Life says that the South African market is one that does indeed appear to have challenges of this kind. Hence, misconceptions persist.

Does this then present an opportunity to better educate people about estate planning's value and what it can mean for rightful heirs when a loved one passes away?

"Yes, it does show us that there is an opportunity within the market," says Stoch. "It also tells us how as an insurer, we can help educate people around the importance of wills, as well as provide a means for people to access it," he adds. 

What are some of the misconceptions that South Africans have?

1. A financial plan and estate plan are the same thing

"Estate planning remains one of the most misunderstood areas of financial planning," says Stoch. "Unfortunately, some people have the view that if a financial plan is in place, an estate plan isn't necessary - not realising that the one is not entirely the same as the other, or that estate planning is only one key component of a more comprehensive portfolio," he adds.

"Think of it as an integral component of life planning, instead of what will need to happen when you're no longer around," suggests Stoch. Reframing how we think about  estate planning may make it easier to understand from  a more appropriate (or positive) point of view.

2. You have to be very wealthy to have an estate plan

"Estate planning isn't only for wealthier individuals. Yes, owning property and other assets, like a car, for instance are part of the meaning of "estate", but essentially, any adult earning an income and providing for loved ones or family members is able to set a plan in motion," says Stoch

"At the very least, having a bank account is enough to 'have an estate'. Other assets like a car, a home, or an investment portfolio are also elements that define an estate. Estate planning is thus applicable to anyone who is financially supporting family, regardless of the size of their estate," he explains further. "It doesn't really matter how many valuables a person owns or how much money is in their bank accounts."

3. Estate planning is just about money

Estate planning is not just about the distribution of assets after a policyholder has passed away. "It's also about a legacy that is unique to every person," says Stoch. "Monetary aspects are one of the main reasons estate planning is important, but it's also about a person's values, memories and life experiences. There are aspects of such things that can be passed down too. These things also define our lives as individuals and can be meaningful to our loved ones as well."

4. Estate planning is only important to do in your retirement years

 "Estate planning isn't necessarily only for older populations," says Stoch.

"No earning adult is too young to start thinking about getting an estate plan in place. An unexpected event can happen at any time, at any age. A smooth transition of assets doesn't depend on age," he adds.

Introducing Discovery Wills and Trust Services

Perceptions, misplaced attitudes and disjointed viewpoints. Within every challenge, lies an opportunity. 

"Discovery has recently set up a company within the group, specifically for addressing estate planning needs and correcting misunderstandings too," says Stoch. "In order to complement the services offered through this company, Discovery Wills and Trust Services, clients will be able to take out a Discovery Estate Preserver policy to help fund the costs of winding up an estate."

"Estate planning is an intricate and very technical process that involves money and asset ownership. It is bound by legal structures and regulations that are intended to serve the best interests of leaving a legacy, by protecting the financial aspects of the estate," he adds further.

A holistic approach to estate planning is at the core of the company's formation. Discovery Life recognises that making the correct financial decisions in the context of estate planning are crucial. Through the company, supplemented by the Discovery Estate Preserver, clients have access to the right kind of expertise to assist with the process, making sure their last wishes can be met.

"Discovery Wills and Trust Services will be offering services that include the drawing up of a last will and testament, executor and trustee appointments, deceased estate administration, testamentary trust administration and estate property transfers," Stoch says. 

"The company and benefit will ensure that clients and their families are comprehensively protected against legal costs as well as the administration difficulties associated with estate planning. This way the process can be carried out without a hitch and legacies can be seamlessly fulfilled."

Speak to your clients about holistic estate planning from Discovery Life today.