Financial Goals
Your first estate plan is about direction, not detail
In a previous edition of this publication, I wrote about why estate planning is not only for the rich or the elderly, and stressed the importance of not postponing it until you’ve built more wealth, settled into a career, or started a family. For someone in their 20s, it can still seem premature, overly complicated, or simply unnecessary. However, drafting your first estate plan isn’t about having everything figured out – it’s about putting basic decisions in place while your life is still relatively simple.
Estate planning is not a one-time event - it’s an ongoing process
Your first estate plan is a foundation you can build on as your circumstances evolve. In your 20s, you are more likely to have fewer assets, fewer obligations, and fewer competing priorities than you will in later life. That simplicity is an advantage, because it makes decisions more straightforward.
What to include in your first estate plan
A basic will is the starting point. It outlines how your assets should be distributed if you die and allows you to nominate an executor to carry out your wishes. Even if your estate is modest, a will provides clarity and reduces the risk of disputes or confusion.
Beneficiary designations are equally important. It’s critical to understand that your beneficiary nominations (rather than your will) are what will be used to determine the transfer of assets such as investment policies and life insurance policies. Keeping these up to date is a simple but powerful step.
In today’s global society, which includes working from anywhere, it may be practical to consider a financial power of attorney, which authorises a trusted person to manage your financial affairs in respect of your South African assets if you are unable to do so. You may also want to consider a healthcare directive or living will, which allows you to specify your medical preferences and appoint someone to make healthcare decisions on your behalf.
None of these elements need to be perfect from the outset, they simply need to be in place. It establishes a habit of intentional decision-making and ensures that, no matter what happens, someone you trust is empowered to act on your behalf.
Refining your estate plan
Your life will change – your career will develop, your relationships will evolve, and your financial position will likely become more complex. Estate planning is not a one-time event – it’s an ongoing process.
Certain life events should prompt an immediate review. These include getting married or divorced, having or adopting a child, or experiencing the death of a beneficiary or an executor. Each of these changes can significantly affect your wishes and your plans.
Financial developments are another important trigger. Purchasing property, starting a business, or accumulating substantial assets may require more detailed planning. Similarly, moving to a different country can impact how your estate is treated under the succession laws and tax rules of that jurisdiction.
Even in the absence of major changes, it’s wise to review your estate plan annually. This ensures it remains aligned with your current circumstances and continues to reflect your intentions.
Conclusion
The most important step is the first one. Start small, keep it simple, and refine as you go – your future self, and those who matter most to you, will benefit from it.
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