Estate planning: How prepared are you for unforeseen events

Is estate planning only relevant once you reach a certain age or if you have children?

No matter your personal circumstances, all South African income earners can (and should) put together an estate plan. If you're an earning adult with assets, it's in your own best interest, as well as the interest of those you want taken care of when you are no longer around, to have an estate plan.

Estate planning for singles

Today, many adults may choose to remain single or unmarried. "Independent individuals earning an income are essentially the decision-makers of their lives," says Daniel Stoch, Head of Market Analytics and R&D at Discovery Life.

This makes estate planning very important; as without a plan, the law makes specific decisions on your behalf. Without a plan or will in place giving specific instructions for what should happen, who should implement these instructions or even receive specific assets, the Intestate Succession Act system would regard you as having died 'intestate'. This means that your assets will be divided up according to the order stated within the Act. "This may not be according to your actual preference," adds Stoch.

For instance, surviving parents, siblings or even other extended family members (if they are your closest blood relative) - such as a distant cousin - will be selected on behalf of a single individual who has passed away without giving clear direction by law as to what should happen to their assets.

"It could happen that a single individual would want immediate or extended family members to inherit. It could also happen that a single person may prefer a close friend or even a charitable organisation to benefit from some of their assets," explains Stoch. "Without legally specifying this, no one will know that this is what you'd have wanted or be in a position to follow through with your wishes."

Couples and estate planning

It's not uncommon for younger adults to put off any thoughts around estate planning until certain life experiences happen.

"Some people feel that they are too young to start thinking about such things; while others take the view that they're in good health, so it's not yet necessary."

The reality is that severe illness, accidents and even death are all possibilities, at any life stage. And such life-changing events are not entirely within your control.

"For couples - of any age, it's about taking care of each other should the worst occur and not just if there are dependents in the picture. A tragedy may throw everything off course and disrupt lives, but an up-to-date estate plan can help to pull things together again," adds Stoch.

Families and estate planning

Family dynamics play a significant role in estate planning. A couple may have children together. A couple may also have children from prior relationships living under one roof, or even adopted children. Some individuals doing their estate plan may have no children at all, and never intend to; but also have complicated relationships with other blood relations.

Any family issues, however small or insignificant, that are unresolved can quickly create complications in the estate planning process. While planners and legal teams can customise the governing documents needed, according to your individual needs and wishes, addressing family-related challenges should ideally be appropriately handled beforehand to avoid complicated outcomes.

No matter your family dynamic, it's a good idea to be upfront about any potential complex family matters. Without transparency, the transfer or distribution of assets is difficult to handle seamlessly - no matter who the decided beneficiary is.

Tax planning and estate planning go hand in

When it comes to tax on your estate, tax exemptions are not always as clear and simple as everyone would like them to be. There are many interactions between the different taxes.

Choosing the right professional, who is able to guide you through all the aspects of tax that affect your estate and help you plan well in advance, will save your beneficiaries many unnecessary costs further down the line.

A product that makes access to estate planning simpler

"Discovery Life understands the challenges people face when it comes to estate planning and that everyone is unique in their own right," says Stoch. "That's why we've set up Discovery Wills and Trust Services, a company which facilitates the estate planning process, together with the Discovery Estate Preserver."

Every September is an ideal opportunity to get your affairs in

National Wills Week is acknowledged every September in South Africa. It's a great reminder for us to re-look at our wills or estate plans - or even to put one together.

"Our clients have free access to will drafting as part of our services," says Stoch. - "We know that having a will in place is something that as many as 70% of working South Africans don't currently have. So, this is a critical service that clients can make use of."

Through Discovery Wills and Trust Services, you can rest assured knowing that your legacy is safeguarded through a wide range of holistic estate planning and professional services that have been crafted by industry experts. Discovery Wills and Trust Services' offering includes assistance with executor and trustee appointments, deceased estate administration, testamentary trust administration and estate property transfers.

"As a client, you will also be afforded peace of mind, knowing that your loved ones are comprehensively protected against the legal and administrative costs of wrapping up your estate efficiently," adds Stoch.

"These services are for every earning adult, of any age, and at any stage in their lives," he adds further. "No matter how simple or complex the structure of your family is, the professional services on offer can help to create the kind of solid plan you would want for your loved ones."