WHOSE ESTATE IS IT ANYWAY ?TEN KEY QUESTIONS THAT YOU SHOULD BEASKING YOUR CLIENTTanya JacobsAugust 2012
AGENDA● The 10 key questions you should be asking yourself● Glacier Fiduciary Offering
1. Do I have a strategic estate plan in place? marital trustdependents emigration insolvency regime structuresbusiness offshore divorce retirement disabilitystructures
2. Do I have a signed, and up to date will in place?“There is nothing quite like a will for fomenting family dissention”Van Deventer v Van Deventer SCA Case No 88/06
Do you have a signed, and up to date willin place?● The key to the estate plan● Must deal with your assets● Must express your wishes● Must be valid and up to date● Be careful - divorce (3 months)● Consider foreign assets
3. Have I used the R3,5 Abatement to best effect?● The abatement roll-over● Bequeath R3,5 million to a testamentary trust● The type of asset● Loan accounts
4. Is “my” family trust at risk?There needs to be evidence that such party controlled the trust,And but for the trust he would have owned the assets in his own name.“There needs to be evidence that such partyBadenhorst v BadenhorstThere needs to be evidence that such party controlled the trust,controlled the trust, and but for the trust heAnd but for the trust he would have owned the assets in his own name.Badenhorst vhave owned the assets in his own name”would Badenhorstneeds to be evidence that such party controlled the trust,And but for the trust he would have owned the assets in his own name.Badenhorst v BadenhorstBadenhorst v Badenhorst
Is “my” family trust at risk?● Trustees are obliged to give effect to the provisions of the trust deed.● Perform their duties with care skill and diligence which can be expected of a person who manages the affairs of another.● Exercise their discretion with the necessary objectivity and independence.
5. Am I using my family trust effectively? “A trust is a versatile business and estate planning tool and only one’s imagination limits the purposes for which trusts may be created”.Professor W M van der Westhuizen
Am I using my family trust effectively?● Some times effectively could mean terminating the trust● Vesting the CGT gain?
6. Will my buy-and-sell arrangements protect my family?The purpose of buy-and-sell agreementsare to create certainty both for thepurchaser and the seller’s surviving familymembers
Will my buy-and-sell arrangementsprotect my family?1. Agreements not signed2. Original contracts lost3. Wrong parties4. Fixed valuations5. Outdated values6. In-community marriages7. Conflict with will / shareholders agreement
7. Are my policy beneficiary nominations up to date ?LIFE ASSURANCE: Policy Contract● May nominate anyone (in community marriages)● Can save executor’s fees● Still part of estate for estate duty● Security cessions
8. Have I made sufficient provision for liquidity in my estate?Liquidity is an essential element of a plan – It is not the plan
Have I made sufficient provision forliquidity?Liquidity (cash in an estate)The need includes: Provision for dependants Settle Debts Estate expenses i. Estate Duty ii. CGT iii. Executor’s fees iv. Outstanding taxes
Have I made sufficient provision for liquidity?The role of life assurance1. The correct amount at the right time2. Usually the most cost effective means of providing liquidity3. The capital gains tax advantage4. Beneficiary nominations
9. How will my retirement fund benefits be dealt with?Section 37 C● Dependents● Divorce● Living annuities - beneficiaries● Living annuities - divorce
How will my retirement fund benefits be dealt with?Saving estate duty● Maximum retirement age removed● Estate duty on lump sum removed● Tables allow for disallowed contributions● The opportunity to skip a generation● Reduce the surviving spouse’s estate duty
Self-assessment / Check Yourself – 10 key questions1. Do you have a strategic estate plan in place?2. Do you have a signed, and up to date will in place?3. Do you use the R3,5 Abatement to best effect?4. Is “your” family trust at risk?5. Are you using the family trust effectively?6. Are your buy-and-sell arrangements going to protect you?7. Are your policy beneficiary nominations up to date?8. Is there sufficient liquidity in your estate?9. How will your retirement fund benefits be dealt with?10. Will my family know what to do?
Glacier Offering : Plan to implementation● estate planning report● will drafting service● trust review/report – legal and governance● professional trustee services● estate planning aspects of business assurance structures● estate planning related tax solutions● executorships and administration of deceased estates● testamentary trust administration● offshore fiduciary services – referral basis….fixed fee based service
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