Estate planning ensures your loved ones are cared for when you are gone.
Secure your legacy through estate planning this September
The cornerstone of estate planning is a will — the document that ensures an individual’s assets are distributed according to their wishes in the event of their death. Without one, the state steps in, and these assets are distributed according to the Intestate Succession Act — a rigid formula that may not reflect personal wishes or unique family dynamics. The consequences can be financially and emotionally devastating for those left behind.
Despite its importance, statistics from the Master of the High Court show that less than 15% of South Africans leave a will when they die.
Estate planning is about more than just dividing assets. It secures the future for those you care about and ensures that your legacy is managed according to your wishes. National Wills Month, observed in September each year, shines a spotlight on this often-overlooked aspect of financial planning.
While the campaign encourages individuals to draft or update their wills, true estate planning extends beyond just readying legal documents to include a comprehensive evaluation of finances, long-term goals and the needs of those left behind.
A common misconception is that estate planning is only necessary for the elderly or the wealthy. However, experts agree that this is a critical process for everyone, regardless of age, health or financial status, and that anyone with assets — a home, a car or even a modest bank account — should consider an estate plan.
Another common misunderstanding is that once a will has been drafted, the work is done. In reality, estate planning is an ongoing process. As individuals and their circumstances change, so should their estate plan. Marriage, the birth of children, divorce or significant financial shifts can drastically impact the distribution of a person’s assets, and regular reviews ensure that existing plans remain aligned with current wishes and intentions.
The first step in estate planning is acknowledging its importance and making the decision to start. National Wills Month is the perfect opportunity to take that first step. It is also an excellent opportunity to review and update existing documents. Many legal professionals and non-profit organisations offer free or heavily discounted will-drafting services in the month of September, which makes estate planning accessible for everyone.
The hidden benefits of estate planning
Without a will and a well-structured estate plan, the estate settlement process can be lengthy, costly and stressful for those left behind. The benefits of estate planning go far beyond these basics, offering a range of hidden advantages that can significantly impact individuals and their loved ones.
Knowing that your affairs are in order provides one with peace of mind.
Prevent conflict
Without a clear and legally binding will, disagreements may arise among family members, resulting in long-lasting rifts and costly legal battles. Estate planning helps avoid misunderstandings, ensuring that families remain united during challenging times.
Ensure business continuity
A well-structured estate plan can ensure smooth succession, prevent the collapse of an enterprise upon death or incapacitation, and protect employee livelihoods. It may also prevent potential challenges like partner disputes, loss of value or even the closure of a business.
Provide for minors
Designating guardianship determines who will take care of young children should both parents pass away. Without a designated guardian, the courts will make this decision. Guardianship instructions in estate planning allow parents to appoint trusted guardians and set up trusts to manage the children’s inheritance until they come of age.
Protect through flexibility
Estate planning offers the flexibility to structure asset distribution aligned with values and priorities. For example, a larger portion can be left to a family member who was a primary caregiver or a loved one who needs more financial support. It can also help protect vulnerable beneficiaries such as minors, and those who have special needs or are financially inexperienced.
Maintain privacy
If no will exists, the estate goes through a public court process that becomes a matter of public record. Proper estate planning bypasses this process, maintaining the privacy of those left behind and protecting beneficiaries from unwanted attention or potential fraud.
Peace of mind
The most valuable benefit of estate planning lies in the peace of mind it provides. Knowing that your affairs are in order, loved ones are protected and your wishes will be honoured can bring a profound sense of comfort. This gift extends to those left behind, who will be spared the stress and uncertainty of navigating an estate without guidance amid grief and loss.
Managing your digital legacy
A person’s online presence, in this digital age, forms a crucial part of their identity. For this reason, it is increasingly important to consider not only traditional assets but also one’s digital footprint when planning an estate. Digital legacies include social media profiles, online banking accounts and cryptocurrencies. Without proper planning, these can become inaccessible or misused after death, causing distress and financial issues for those left behind.
Digital financial assets pose specific challenges. Cryptocurrencies, for example, can be lost without known wallet passwords after death. Ensuring access to online banking, insurance and tax records is also key.
Platforms like Facebook offer options for deleting or memorialising accounts posthumously. A memorialised profile can act as a place for family and friends to gather and share memories after a person has passed on. For both options, the account holder should appoint a legacy contact through Facebook while still alive. It is important to have upfront conversations with family and loved ones regarding one’s online presence, as this can significantly impact their emotional wellbeing and grieving process.
So, what can be done?
In addition to a traditional executor, a digital executor can be appointed to manage assets such as online accounts, digital files and any other virtual property after death.
This could include closing, memorialising or maintaining social media profiles, handling online banking, investment and cryptocurrencies and securing, organising or distributing digital files like photos, documents or other media stored in cloud services. A digital executor also assists with password management, accessing online accounts through passwords left behind, often stored in a password manager.
Appointing a digital executor helps ensure that a person’s digital life is handled properly and that assets are not lost or mishandled after death. Planning for a digital legacy can protect loved ones and ensure that wishes are respected. Take time this National Wills Month (September) to consult with professionals to make sure that your digital assets are incorporated into your estate plan.