D id you know that more than 70% of South Africa’s working population don’t have wills? It’s understandable because for most of us, estate planning is synonymous with retirement – that far-off problem you will consider later in life. After all, why worry about your estate when you’re paying a bond, saving for your children’s education, or when you only have a few assets?
Planning for your estate should be one of your priorities, especially if you spent most of your life working hard for your family.
You see, Estate Planning is all about the disbursement of your assets after you die. Most people name their spouse and / or children as beneficiaries, and for good reason. By planning your estate, you are not only securing their financial future, you are also ensuring that you ease their burden during a very painful time.
The fact is, there’s a lot more to estate planning than meets the eye. Here are five things that you may not know about estate planning.
1. Estate Planning is for everyone
The reality is that estate planning is something that everyone should do. By taking steps now, you can keep everyone in your life safe, happy and well-cared for, long after you’ve left this world. There’s no minimum amount of assets that make planning an estate worth it and those with limited assets can often afford to lose the least. So it’s important to plan your estate effectively so that you can pass it on in the most cost effective manner.
2. Make sure you have a Will
At its most basic, a will is a legal document that goes into effect when you pass away. It gives you the opportunity to plan your estate according to your wishes and ensures that the process through which your assets are distributed to your beneficiaries is simple and painless. From the disbursement of life insurance policies, savings accounts, retirement funds and selling off your property, a will also covers a range of other issues including closing your bank accounts and even coming up with the money to pay for your funeral.
3. If you don’t plan, it may cost your loved one’s
If you pass away without an estate plan, your assets will be distributed according to state probate laws, without any input as to what you would have preferred. You don’t control what percentage of your estate each beneficiary will receive, much less which beneficiaries will inherit at all. In addition, if you become disabled without an estate plan and you are unable to conduct business due to your incapacity, only a court appointee can sign for you regarding assets in your name.
4. It’s important to update your beneficiaries
Divorce, remarriage, grandchildren, adoptions and other changes can alter the structure of your family and assets. Make it a rule to check the beneficiaries of your life insurance, will, retirement plan and financial accounts every few years. Even if you haven’t experienced a major life change recently, it’s good to check where everything stands. In addition, beneficiary designations are often not kept up to date or are just inaccurate. Naming the wrong beneficiary can lead to having to pay more executor fees and taxes so regular checks will help you sort out this out.
5. You can always change your Will and your Estate Plan
If you put together your Will and plan your estate now, you can always make changes later. If you want to choose or add a new beneficiary, give different amounts of assets to each beneficiary or even add new family members as time goes on, you can do that. Nothing is set in stone.
If you want to truly understand the benefits of planning your estate, it is advisable to work with a financial planner who is familiar with this field. With their education and experience, they will make the process easy for you. This way, you can plan for your estate in the fastest way possible and ensure that you make the best decisions for your family.
Scott Barker is the Managing Director of Snowball Financial Services
At Snowball Financial Services, we believe so strongly that all financial planning starts with a Will that we’ll draft yours as a complimentary service. Give our team a call today 0310360420 or email admin@snowballfinancial.co.za to arrange your complimentary Will consultation today, so that you have peace of mind for tomorrow. For your convenience, consultations are available online, on the phone or in person.
*The information in article does not, and is not intended to, constitute financial advice and materials on this site are for general informational purposes only.