Estate Duty planning
Need While Planning
For Estate Duty
Estate Duty planning is very important to preserve your wealth for your future generations. Each resident has to pay Estate Duty to the Government if the valuation of total estates reaches R3.5 million and more than that. If you possess some property, life insurance policies and beneficiary of provident fund, your assets will quickly reach the threshold R3.5m and exceeded soon. The estate refers to everything that you own such as home, car, other real estate, furniture, investments, personal possessions, checking and savings accounts, life insurance, Jewelry, Household items, Mutual funds, Stocks, Savings bonds, retire benefit and even cash.
Estate may be large or medium sized, but after your death the entire estate will be detached from you. Therefore, it is better to take prior decision how to control your estate after your death. Therefore you need to give instructions stating that whom you want to give estate in your absence. For this you have to pay estate duty, court fees and legal costs. Therefore it is important to make Estate Duty planning and acquire thorough knowledgeofestate tax liability.
Estate duty refers to that amount which you have to pay during the transfer of your name from your estate to another name. How much tax you need to pay entirely depend on estate value and there are many relevant companies, which can help you to calculate your estate duty based on your relevant details. They will help you to incorporate various discounts by calculating the amount of Life Cover Need to get exempted from thistax partially. Any insurance policy if directly paid to the beneficiary, it would be dutiable. Similarly, if any property is sold within short period before the death of the property owner for his own benefit or for heirs, the amount is also taxable. Making donations or use of Inter Vivo trusts may help you to reduce Estate Duty Tax. Estate duty planning is a very complicated matter especially when a trust is set up to administer.
The features of a good estate planning are as follows:
- Include instructions for future care if disabilities come before death.
- Include instructions to pass your values related to your hard work, education, religion, etc along with your valuables.
- Appoint guardian and inheritance manager for minor children.
- Provide for needy family members without disrupting government benefits.
- Provide option for irresponsible loved ones who need future protection against creditors or divorce.
- Provide for your business transfer required at your disability, retirement, or death.
- Minimize taxes, unnecessary legal fees, and court costs.
- Inclusion life insurance for your family to provide at your death, add your disability income insurance which will replace your income during your injury or illness, and long-term care insurance for extended illness or injury which will help to pay the amount required for your care.
It is a continuous processes not any one-time event as your financial situations, family and life cover needs change throughout your whole life.Therefore, yourplan needs tobe reviewed and update time to time.