Estate planning is about organising your financial affairs in such a manner that should you pass away:
- Your estate will pay minimal taxes,
- Proceeds (including inheritances) will be distributed appropriately,
- Dependants will be looked after and
- That there will be enough cash to settle debts and other obligations.
Some important terms to know for estate planning purposes include:
A Will is a legal document that lays out the fate of your property after your death. It states who receives specific portions of your property. The way a Will is structured may reduce the taxes and other costs.
A trust is an arrangement where you entrust property to one person or an organization for the benefit of your beneficiaries. The trustee is then remunerated for the management of the property on behalf of your beneficiary/ies.
- Power of Attorney
Power of Attorney gives a person or organization the legal right to handle your affairs when you are unable to do so. The person or organisation you appoint is referred to as an “attorney-in-fact” or “agent”.
The Executor is an individual appointed to administer the estate of a deceased person. The Executor’s main duty is to carry out the instructions and wishes of the deceased.
- Heirs and Legatees
The Heir or Legatee is the person who inherits some or all of the estate of a recently deceased person. The legal successor is usually selected because he or she is related to the deceased by a direct bloodline or has been designated in a will or by a legal authority.