South Africa’s National Wills Week 2019 takes place from September 16-20 to emphasise the importance of drafting a will as part of a comprehensive estate planning process. Wills Week, which is an annual nationwide initiative, encourages members of the public to visit participating institutions to have their wills drafted at no cost. To help South Africans avoid the consequences of dying without a valid will, Ecsponent Financial Services is supporting National Wills Week by offering helpful estate planning information and a free wills drafting service during the month of September.

A last will and testament – even in its most basic format – not only allow for a person’s final wishes and wealth distribution to be carried out, but it also prevents unnecessary costs, administration and time from burdening spouses and family members after death.

A will forms part of a broader estate planning process, which is a strategic plan for managing a person’s assets while they are alive and after death. A lack of planning does not simply introduce complications in terms of deploying wealth to spouses and successive generations – it can also mean the forced sale of valuable or sentimental assets to cover outstanding debts, unexpected taxes or unplanned shortfalls in winding up the person’s estate.

There are many important aspects to an estate plan which many people have not yet considered. Here are some helpful tips on dealing with the main aspects of putting together a proper estate plan.


Estate duty

Estate duty is a significant implication for anyone who dies and has a net estate in excess of R3.5 million.

Marietta du Preez, General Manager at Ecsponent Financial Services, explains that the primary purpose of estate duty is to tax the transfer of wealth from the deceased’s estate to its beneficiaries.

Assets or property in an estate comprises of, but is not limited to:

  • Any property that the deceased was competent to dispose of whether in South Africa or abroad
  • Loan accounts
  • Unpaid salaries
  • Leave pay
  • Investments such as shares, unit trusts and bank deposits.

The first R3.5 million of an estate’s net asset value is not taxed, but on the amount exceeding that, SARS will deduct estate duty. To determine the net asset value, the gross asset value is reduced by:

  • All legitimate claims against the state
  • Any amount accruing to a providing spouse

While death and taxes may be the only certainties in life, tax planning to preserve inter-generational wealth is not only legal but also makes sense. There are several ways in which to approach this:

A living trust, also known as an inter vivos trust, is a trust that is created while you are still alive. The creator of the trust is referred to as the founder and is responsible for appointing one or more trustees as well as the trust’s beneficiaries.

The benefits of the inter vivos trust include intergenerational wealth preservation. “Put simply, if you work hard your whole life and accumulate wealth that you would like your children, and their children’s children to enjoy, the living trust provides a vehicle to enable this,” says Du Preez.

A professional will be able to offer advice on how to structure the trust to enjoy tax benefits as well as asset protection.


Retirement annuities

Retirement annuities are useful estate planning tools for several reasons. Firstly, they are excluded from the assets in your estate and cannot be frozen between death and the winding up of your estate. Secondly, all retirement annuity contributions not deducted from income tax during your lifetime, will not be taxed in the hands of your beneficiaries.

Lastly, if your estate is sequestrated (i.e. it is declared insolvent) before your demise, money in a retirement annuity is largely protected from creditors. As such, people often make lump-sum payments to their retirement annuities to make use of healthy estate planning options available to them.



For South African residents, donations are subject to donations tax, which is 20% on the initial R30-million and 25% on any amount that exceeds R30-million.

However, current legislation states that donations of less than R100 000 during a tax year are exempt from donations tax. Du Preez explains that you can therefore donate R100,000 per tax year to an inter vivos trust without attracting donations tax. By doing this, the estate of the donor is reduced by the donated amount as well as by all future growth generated on this amount. 


Make use of a roll-over abatement

Section 4A of the Estate Duty Act allows for a R3.5-million abatement from estate duty to roll over from the deceased to a surviving spouse. This means that when you die and bequeath your estate to a surviving spouse, you will not be liable for estate duty.

Your spouse will also inherit your abatement and thus be entitled to a R7-million estate duty exemption at the time of their death.

Donations of any amount to a spouse are free from donations tax in terms of Section 56 of the Income Tax Act, and bequests to a spouse are also free from estate duty in terms of Section 4 (q) of the Estate Duty Act.


A gift to your heirs

Planning ahead will give you the best chance of providing for your surviving spouse and heirs. The first step in estate planning is meeting with a financial adviser who will take you through the various options available to you. Next, you need to obtain advice on how to provide for estate costs.

Ultimately, a financial planner will help you manage your assets now so you can rest assured your wealth is distributed according to your wishes when you die.

For a free financial analysis, estate plan and drafting of a valid will, contact Ecsponent Financial Services via