Essential steps for effective estate planning

Estate planning isn’t just for the wealthy or the elderly. It’s a crucial part of anyone’s financial plan, regardless of age, assets, or family situation. Done properly, it ensures your loved ones are taken care of, your wishes are followed, and your estate is handled with minimal stress or confusion.

Estate planning is ultimately about peace of mind. It’s just about making decisions while you still can so that others aren’t left to guess what you would have wanted.

Five steps anyone can take to build a strong and effective estate plan:

1. Understand your personal and family setup

Start by identifying the people who depend on you or who you want to benefit from your estate.

• Who are your heirs - your spouse, children, and/or extended family?
• Are you married, single, or in a long-term partnership? Your marital regime (like in or out of the community of property) also affects how your assets are divided.
• Are there dependents with specific needs, like minors, disabled individuals, or elderly parents?

A detailed consideration of your family structure helps you avoid disputes later and ensures no one important is left out.

2. Take stock of what you own and owe

Your estate plan is built on your balance sheet, which is essentially everything you own and everything you owe.

• List all your major assets, including properties, vehicles, business shares, digital assets, retirement funds, and insurance policies.
• Make a note of your debts and contracts - like home loans, car finance, credit cards, personal loans, sureties, mobile phone contracts, and so on.
• Consider complex assets like offshore holdings or private companies, which may require special planning.

Knowing the value and complexity of your estate will help guide how you structure your Will and plan for the costs associated with estate administration like taxes and executor’s fees.

3. Define your goals and intentions

Your estate plan is more than a list of assets; it’s a reflection of your priorities.

• Decide who gets what and consider alternate heirs in case your primary choices aren’t alive when you pass away.
• Think about future needs like dependents’ education or ongoing care.
• If you own a business, plan for its future - whether that’s a handover or a sale.
• Do you want part of your estate to support a specific cause or charitable organisation?

These decisions are personal and many don’t effectively plan for it,” Strydom says, “but they need to be made now because, if you don’t decide, your wishes will likely not be fulfilled

4. Put your plan into action

Once your goals are clear, it’s time to formalise everything.

• Draft a valid Will and nominate a trusted executor.
• Make sure your beneficiary nominations on policies and retirement funds are up to date.
• Consider setting up a trust - especially if you have minor children or vulnerable dependents.
• Calculate potential costs like estate duty, executor’s fees, capital gains tax, and property transfer fees.
• Ensure your estate has enough liquidity, like cash or assets that can be quickly converted to cash, to settle estate-related costs and to help your loved ones cope immediately after your death while the estate is being wound up.

Don’t forget to keep your documents safe and share their location with someone you trust.

5. Get professional advice

Estate planning isn’t a once-off task - it’s an ongoing process. As your life changes, so should your plan.

• Review your estate plan regularly, and preferably once a year.
• Speak to a trusted fiduciary expert or financial advisor to ensure your decisions are tax-efficient and legally sound.

Estate planning should be part of your broader financial journey. With guidance and support from our financial experts, we help you connect the dots - ensuring your personal wishes become reality, leaving a lasting legacy for generations to come.

A good estate plan doesn’t just protect wealth; it protects your loved ones from uncertainty,” Strydom concludes, “and that’s something worth planning for.

* Strydom is a fiduciary product head at FNB.

PERSONAL FINANCE