This will be to everyone’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.
These expenses include the following:
- Estate duty;
- Executor’s fee;
- Capital Gains Tax.
In the first place these costs have a direct impact on the cash balance of the estate, and the question arises 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.
Secondly 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. A 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 above mentioned costs. If you spend time now to ensure that your will is in order in all of its aspects, it will save much 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 upon as 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 financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)