If you have never planned your estate, perhaps now is a good time to consider it. This will be to you and your family’s benefit, as there are often hidden costs which come into effect at the time of passing, that are not taken into account when you plan your estate and inheritance.
Expenses when an estate comes into effect
- Estate duty
- Executor’s fee
- Capital Gains Tax
These costs have a direct impact on the cash balance of the estate. Questions arise of whether there will be enough cash to enable the executor to administer the estate without having to sell estate assets. This can slow down the administering process of the estate considerably with potential detriment to the heirs.
Settling the estate’s expenses
The care of the dependents will be influenced because the above-mentioned costs will have to be settled from the estate cash. This may result in the spouse and children inheriting less than what the testator had planned. The person who gets the worst of it is the person who lives longest, because he/she usually inherits the remaining estate cash.
Unfortunately, the fact that you have a judicially sound will may not necessarily provide the answers to these questions. Thorough estate planning will be needed in order to find the answers. The stipulations of the will must be tested against the aforementioned costs, after which the necessary changes can be made to produce a cost-effective will. The will’s lay-out will therefore have a direct impact on the costs. If you spend time to ensure that your will is in order in all aspects, it will limit the grief when you are no longer there to set things straight.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)