Consider these five essential parts of good estate planning
Fsp Invest Team, 15 Apr. 2013
“It doesn’t really matter how much money you leave behind; if you don’t plan your estate properly, you could leave your family financially wanting. And worse, it can deprive your loved ones of the life you’ve always wanted them to have, leaving them with more to deal with than just grieving once you’re gone,” writes Karin Iten in the South African Investor. Read on to discover the five vital elements of good estate planning.
“Rich or poor, everyone needs to plan their estates. It can be as simple as drawing up a will in which all your worldly possessions are left to your spouse, or it can be as complex as establishing a local or offshore trust,” says Bryan Hirsch, a veteran financial planner.
According to some estate experts, planning your estate is quite easy if you’re properly prepared.
And all it requires is that you have certain important elements in place to protect your legacy.
Here’s are five essential parts of good estate planning
According to the South African Investor your estate should:
1. Protect the worth of your growth assets. These are assets, such as shares and property, which should provide strong investment returns over the long-term.
2. Reduce exposure to taxes, such as capital gains tax (CGT) and estate duty.
3. Shield assets from forced sale by assessing the liquidity of the estate. “Unless you leave your assets to your spouse, the taxman will believe you’ve disposed of them and your estate will be liable for taxable capital gains. If there isn’t enough cash in the estate to settle your debts, transfer costs, expenses, executor’s and master’s fee, or pay CGT, the executor may have to sell assets to raise some cash. And, in extreme cases, he may have to sell the house you left your family to cover costs,” explains the South African Investor.
4. Limit estate expenses. “Unlike limiting estate duty; this simply means ensuring you pay as little as legally possible,” says the South African Investor.
5. Ensure a smooth transition of your estate on your death.
Remember, “the easiest vehicle to makes sure your estate ticks all five of these boxes is to regularly review your will and set up a Trust ,” advises the South African Investor.
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