Uncompromised Succession Planning
Succession planning involves insuring that, in the event of your death, your dependants are taken care of and your personal financial affairs are dealt with in an efficient and cost-effective manner. Your last will and testament forms the framework for the implementation of your wishes in this regard.
Your last will and testament
Before your last will and testament can be finalized, the practical implications of winding up your estate must be addressed:
- How much cash will the estate receive?
- Is this sufficient to deal with the distribution of your estate in the way you intend?
- How do these wishes affect beneficiary nominations on policies and retirement funds?
The primary consideration in deciding on the contents of your last will and testament should be the distribution of your estate in the manner you desire.
Secondary considerations include factors such as estate duty, the quick and smooth administration of your estate and the protection of the assets of your estate from creditors and maladministration. Structures such as trusts can be used to address some of these concerns.
An intervivos trust (living trust) is established in your lifetime. The founder (donor or settlor) can be the person who establishes the trust or the person who settles (provides) assets to a trust.
The trustees of an intervivos trust manage the trust’s assets for the benefit of beneficiaries. The trustees have discretion over how the assets are managed, but must do so in the best interests of the beneficiaries.Reasons for establishing a trust:
- Providing for minor beneficiaries
- To honour maintenance commitments in terms of a divorce order and settlement agreement
- Providing for a disabled dependant or aged parent
- Protecting and preserving assets for the next generation
- Serving as a holding vehicle for your assets as part of your estate planning structure
- Providing a regular income for your favourite charities (Public benefit organisations)
- Providing for the dependants of a deceased employee