Page 33 - Waterfall_Issue 8_2022

CREATING A

LEGACY FOR YOUR

BENEFICIARIES

By Mariska Comins, Head of Technical Support, PSG Wealth

E state planning involves where they need access to funds

structuring and managing
from the estate to meet their day-
your assets while you are alive,
to-day living expenses. It can be
and putting measures in place
have to deal with the loss of a loved
to ensure your wishes are carried out extremely stressful if family members
after you pass away. It also ensures one as well as financial concerns.
that there are no unexpected surprises
your family will have to deal with. BENEFICIARY NOMINATIONS
Certain investments, like endowments,
Although it is often perceived as retirement annuities, living annuities
the final stage of financial planning, and life assurance policies offer the
it should instead be seen as a option to nominate beneficiaries.
continuous process of managing It is crucial to understand how the
your assets and liabilities throughout beneficiary nomination works for each
your lifetime. As detailed in this policy. For example, if you nominate a
article, your estate plan can be used Mariska Comins beneficiary on your retirement annuity,
to achieve various financial goals. section 37C of the Pension Funds Act
applies. The distribution of retirement
ESTATE LIQUIDITY understand how quickly tangible or funds is determined by the trustees
It is important to determine the intangible assets can be liquidated of the fund, who will identify your
liquidity within your estate. There is a to create liquidity to provide for financial dependants and allocate the
lot to consider, such as capital gains your family. Managing day-to-day benefits accordingly. This may not be in
tax, estate duty and executor’s fees. living expenses is vital. Once the line with your beneficiary nominations.
A complete estate plan with detailed deceased’s bank account is frozen, it
calculations will paint a very clear can take several months before the In the case where your dependants are
picture. The last thing you want to executor is able to pay creditors. To minors, you should consider creating
do is to leave your dependants with avoid potentially adverse interest a testamentary trust, which will make
an estate that does not have enough and charges, it is recommended that provision for your dependants until
liquidity when you pass away. dependants have a plan in place they are old enough to manage
to maintain these payments. their financial affairs on their own.
You might have a big estate in terms Updating your beneficiary nominations
of value, but with little or no liquidity It is not uncommon for dependants on a regular basis (as your children
in the estate. It is thus essential to to find themselves in a position become older, or when you get
married or divorced) is equally vital.
“The last thing you want to do is to leave your dependants
with an estate that does not have enough liquidity when LEGACY DOCUMENTS
Essential documents to include in
you pass away.” your estate planning file are, among

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