Estate Planning FAQ'SWhat is estate planning?

This is arranging during one’s lifetime for the accumulation, preservation and distribution of wealth upon death with the aim of minimising taxes and legal costs of such administration.

What is an Estate?

  • An estate is everything that a person owns and includes movable and immovable property, money, shares, jewellery, and life insurance.
  • There are however assets forming part of one’s estate that are excluded from estate duty calculation, for example the principal home of residence, a specified amount, pension, life policies that specifies beneficiaries other that estate duty.
  • These assets therefore need not be dragged in the estate registration process.

Do I need a Will and where can I get it done?

  • Everyone needs a Will as long as they have other people looking up to them.
  • There is also need to put burial arrangements and make a distribution plan.
  • A Will also enables one to nominate rightful beneficiaries to the estate, Executor/s, Guardian/ Custodian of the minor children (if any).
  • Any Legal Practitioner and Registered Will Writers can do a Will.
  • It is important to also make sure the Will is registered with the Master of the High Court.

Do I need a Trust and where can I get it done?

  • A Trust is a critical estate planning tool (especially a living Trust).
  • Anyone wishing to avoid the Administration of Deceased Estates process through the Master of the High Court’s office need to have a Living Trust in place.
  • The Founding Trustee/s then transfers their assets into the Trust for preservation of same for the benefit of nominated beneficiaries.
  • It operates as a separate legal entity apart from its founders and avoids estate duties and other associated costs upon the death of the deceased.
  • Technically speaking the Founder ceases to own property in their own right but has the power to administer it for the benefit of beneficiaries.
  • A legal practitioner who is also registered as a Notary Public assists in the formation and registration of the Trust through the Registrar of Deeds’ Office.
  • Old Mutual can assist with referral to reputable lawyers.

What are the implications of failure to register a Deceased’s estate?

The Law makes it mandatory to register an estate within 14 days of the death of the deceased failure of which using property of such deceased is a criminal offense and attracts a penalty relevant to each particular case. Assets of the deceased can be abused by those with access to the disadvantage of lawful beneficiaries.

What are the advantages of early registration of a Deceased Estate?

  • Compliance with the law,
  • Quick access to inheritance,
  • To avoid property grabbing or abuse of estate property,
  • To avoid inconveniences - e.g. when one wants to urgently mortgage or sell.

Where is Registration of the Deceased Estate done?

  • All estates (irrespective of the type of marriage one was or in respect of single persons- the type of marriage their parents were in) are registrable at the Master of the High Court.
  • However where parties were married in terms of Customary Laws, such estate can be registered at the nearest Magistrate Court,
  • It is however important to note that where one had a Will and were married in terms of Civil Law (Chapter 5.11) such an estate is only registered at the Master of the High Court.

How much does it cost to have a Will drafted?

  • It depends on the complexity of the Will and the experience of the drafter, the more experienced the legal practitioner the pricier their services. It is however cheaper than setting up a Trust.
  • However, where a person has taken out a life product with Old Mutual, our legal advisor assists with the drafting for free.

How much does it cost to have a living Trust drafted?

The Law Society Tariff currently sets the minimum but fees are also dependent on the complexity of the Trust and the experience of the lawyer drafting. It is however more expensive as compared to a Will.

How does Life Insurance work in Estate Planning?

Life Insurance provides ready liquidity upon the death of the life insured. These funds are used widely to carter for living expenses of dependences, paying off of uninsured debts, school fees and other administration of estate expenses.

Does Old Mutual Provide Estate Planning Solutions?

  • Definitely, apart from making sure everyone understands estate planning our array of products is designed to answer estate planning needs of our clients.
  • We also have a dedicated legal practitioner who is ready to answer any questions you may have on the subjects including drafting Wills (for free) to our life policy holders.
  • Our Financial Advisors are dedicated to assist clients make decisions best suited for their preferred estate plans.

What are the likely implications of failure to plan an estate?

COST IMPLICATIONS

  • Master of the High Court’s Fees: 4% of the gross value of the estate
  • Independent Estate Administrator’s fees (Appointed where family members fail to Nominate one among themselves) 5% of the gross value of the estate
  • Estate Duty (after ZW 50 000, Principal home And motor vehicle- are exempted) 5% of net value of the estate
  • Other legal fees, for e.g conveyancing, between 4—10% of the value of the property
  • There are also advertising costs, transport costs and where the estate is subject to litigation then related legal costs are also incurrred.

WE STRONGLY ADVISE OUR CLIENTS TO ENSURE PROPER PRESERVATION AND ADMINISTRTAION OF THEIR ESTATES THROUGH THE FOLLOWING:

  • Registering Trusts in favour of their beneficiaries,
  • Writing Wills,
  • Taking out Life Insurance to ensure liquidity of an estate.