Understanding the value of estate planning

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

No matter what your personal set of circumstances are, 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 interests as much as it is for others.

Estate planning for the single individual

Today, many adults may choose to remain single or unmarried. It's not something that is so widely frowned upon anymore.

"Independent individuals earning an income are essentially the decision-makers of their lives," says Daniel Stoch, a Senior Risk Specialist at Discovery Life. This makes estate planning very important; as without a plan, the law makes very specific decisions for you. 

Without a plan or even a will in place that gives specific instructions for what should happen and whom should take over or benefit from specific assets, the Intestate Succession Act system would regard you a person as having died 'intestate'. This means that all hard-earned 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 the 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 person may prefer a close friend or even a charitable organisation to benefit from some of their assets," adds Stoch. "Without legally specifying this, no one may 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 much later until certain life experiences happen.

"Some 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 or even death are all possibilities for anyone to experience, at any life stage. Such life-changing events are not entirely within any individual's control.

"For couples - of any age, it's also about taking care of things for 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."

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

No matter what the family dynamic is, 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 is the decided beneficiary.

Introducing a product that makes access to estate planning much simpler

"Discovery Life understands many of 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 the Wills and Trust Services company which will be able to facilitate the estate planning process, together with the Discovery Estate Preserver." 

Clients can have access to assistance with drawing up a personalised will - something that as many as 70% of working South Africans don't currently have. The benefit includes assistance with executor and trustee appointments, deceased estate administration, testamentary trust administration and estate property transfers.

"This benefit is for every earning adult, of any age, and at any stage in their lives," he adds. "No matter how simple or complex the structure of a family is, the professional services on offer can help to create the most solid plan that benefits all those a person intends."

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