July 2022
Mariska Comins, Head of Technical Support
PSG Wealth
Estate planning is a crucial building block for your savings and investment journey – perhaps even the most important one. Your life is fluid and will change, and so will your needs and goals, so your financial plans must be flexible enough to be adapted to achieve your goals – even if they change. But once you have passed on, there is nothing you can do to change your plans.
“ By failing to prepare, you are preparing to fail. - Benjamin Franklin ”
How much time do people spend on planning their next holiday, home renovations, birthday parties, and obsessing over little details until everything is perfect? Yet, on something as important as estate planning, it seems as if many people believe in leaving it for another day – at an undefined time in the future. We should be wary of this line of thinking, as we never know what the future holds. One thing the pandemic has highlighted to us all is that life is unpredictable.
Why is estate planning so critical?
An estate plan will ensure that you leave your loved ones a legacy you can be proud of. The last thing you want to do is leave your affairs in disarray, leaving a challenge for your loved ones to deal with. Experience teaches us that an untimely death in a family where the deceased did not have an estate plan in place can often causes a major family feud.
An estate plan is designed to preserve and legally protect assets during a person’s lifetime while ensuring that these assets are distributed effectively to succeeding generations when that person dies.
Consider these benefits that an estate plan provides which can help you to avoid potentially devastating consequences for your family and heirs:
Estate plans extend beyond your financial wishes
An estate plan is not only about creating a will and covering the financial aspects of dying. It is also about having a plan in place that will make it easier for those left behind. It is about ensuring that your family is well looked after when you are no longer there. Here are a few additional considerations:
It is also very important to make sure that your family members are aware of your wishes, and it is important to give consideration to finer details as well. For example, what is your wish regarding your remains? Many people simply mention cremation, but is there a clear understanding of what should be done with your ashes? There are so many options available, and understanding your wishes and having clarity on the details will make very difficult decisions slightly easier during a very traumatic time.
The consequences of neglect
If you die without a will, South African law of intestate succession will determine the distribution and beneficiaries of your estate. The end result could be very different to what you would have chosen while alive. This drawn-out process can be so easily avoided by simply drawing up a valid will.
While estate planning can be daunting, engaging with your trusted financial adviser will make the process a lot easier.
A thorough and well-considered estate plan is an important and everlasting gift you can give your family and loved ones.
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