• Andrew Auld

Estate planning simplified

In the prime of our lives, most of us don’t like to think about death and dying, but for those with dependents and assets, proper estate planning for the management of these after one has died, is essential.

What is estate planning?

Certified Wealth Manager at Alexander Forbes Financial Planning Consultants, Andrew Auld states that estate planning translated into the efficient distribution of one’s assets at their death and helped to avoid potential liabilities and problems.

“It is a term for a broad range of matters, from the will, a living will, estate duty, capital gains tax, trusts for minors, maintenance or accrual claims, provision for dependants, distributing benefits after a second marriage, final expenses, and more,” Auld said.

When should one plan their estate?

Regrettably estate planning is often postponed until later in life, but the first step should be taken as soon as one acquires any assets. This would be the setting up of your first will. “The estate planning process continues to develop as your circumstances change with marriage and children and it is advisable to consult with a professional with experience in estate planning to consider the impact of your wishes on those who inherit, especially your relatives,” Auld said.

Why is estate planning necessary?

Planning ahead empowers those who take care of your affairs after your death to carry out your wishes accurately. “Having been involved for more than 25 years in assisting clients with estate planning, I have learnt never to understate the importance of the potential conflict points that can arise among the family left behind if planning is not done thoroughly.” Auld believes this has become even more relevant with the increase in second marriages. “Don’t dent your legacy with tardy planning of your estate affairs.”

There is also planning required concerning taxes at death. “Smart planning can help reduce the impact of taxes as well as ensuring that there is adequate cash available to settle capital gains tax, estate duty and other costs at death.”

What is the cost of estate planning?

There is often no specific fee charged for this service as it forms part of the holistic financial planning approach rendered by the financial services industry. “Those with large estates who have more complex needs will require more technical competencies. Good advice comes at a cost and fees are in line with those charged by professionals such as attorneys, accountants, trust companies and financial planning businesses.”

Auld cautioned that the costs of improper estate planning could be immeasurable – “broken family relationships, financial hardship, excessive taxes, family business and partnership impacts to name a few.”

“I have found that the comfort and peace of mind brought to a client when I walk them through the process of what happens in the event of their husband or wife’s death, is helped by the knowledge that cash flow and access to capital are all provided for.”