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GLOBAL ESTATE PLANNING:
Sanlam Private Wealth
Dec 12, 2023
LENTSOANE: As more and more South Africans choose to invest offshore, and family members move across borders, multi-jurisdictional estate planning has become increasingly challenging. Why is proper and timeous estate planning so important, especially if you have both local and offshore investment structures?
STANLEY: Estate planning is a crucial part of ensuring the smooth transfer of your wealth to the next generation. It’s important to remember that each person’s estate plan is unique – there’s no one-size-fits-all solution, and it involves far more than just pushing around some numbers on an Excel spreadsheet.
It’s about so much more than just estate duty and tax. Estate duty is, of course, key, but it’s paramount to obtain expert advice to ensure that all the elements of proper estate planning are taken into consideration, to ensure that there are no nasty surprises for your beneficiaries when your estate gets wound up.
It should also be noted that each country generally has its own distinct succession and inheritance tax laws. In addition, there may be a mismatch of factors used to determine tax liabilities in different jurisdictions – such as domicile (permanent home), tax residence, habitual residence and nationality. It’s a highly complex area of expertise, and there are so many factors to be taken into account, including your marital regime and whether your children have emigrated or intend to do so.
LENTSOANE: What are the main elements you look at when working with a client on an estate plan?
STANLEY: We normally ask our clients to share more than just the elements that will form part of their estate duty calculations – we’d like to know all the details of your assets and liabilities, both local and offshore, but also information about life policies, pension and provident funds, business interests, company shares and loan accounts, where the beneficiaries are resident, and much more.
The full picture enables us to draw up a proper estate plan and determine if there are ways to better structure your financial affairs – both in South Africa and offshore – to reduce your overall tax burden.
LENTSOANE: How can estate planning help you to structure your assets more efficiently?
STANLEY: Taking into account all the elements of your financial assets and liabilities, proper estate planning can provide an excellent opportunity to restructure your wealth. For example, what planning opportunities are there to better manage inheritance tax issues in the UK, or US estate taxes? Would an offshore trust or a dry trust be a good option to house your offshore assets?
The most important question to ask when thinking about estate planning is, ‘What are my objectives, and what do I want to achieve?’ Just because one product or vehicle may prevent someone from having to pay estate duty and taxes, it doesn’t mean it will be suitable for your particular purposes. Your estate plan, whether it’s for your local or your offshore assets or both, must be in line with your overall objectives.
LENTSOANE: Let’s talk about wills. If you have both local and offshore assets, how important is it to have an offshore will as well as a South African will?
STANLEY: Drafting wills from an international perspective can be highly complex – expert advice should be sought in determining whether one or multiple wills are required. For some jurisdictions a separate will may be a sensible solution, but it doesn’t always solve all the issues, especially if it hasn’t been drafted correctly. The drafter needs to ensure, for example, that a will dealing with assets in one jurisdiction doesn’t inadvertently revoke another will dealing with assets in another jurisdiction.
This and other important matters can be addressed only when all the facts are known and can be thoroughly examined. A comprehensive estate plan can then be compiled along with carefully drafted wills, taking into account all relevant jurisdictions and the various elements applicable to each.
LENTSOANE: Any final comments on the importance of estate planning?
STANLEY: You’ve worked extremely hard to accumulate your wealth, and you want to be able to leave a lasting legacy for those who come after you. You want to make sure that your assets are distributed according to your wishes when you pass on. It’s one thing to grow and preserve your assets while you are still around, but it’s equally important to ensure that you don’t potentially miss your objective by not taking into account all the elements that are crucial in drawing up a proper estate plan, or by making small, easily avoidable mistakes that can have a major impact in the long run.
At Sanlam Private Wealth, we have all the necessary skills and expertise to assist you in drawing up your global estate plan. If you’d like further information, please contact Stanley Broun on +27 (0)11 778 6648 or firstname.lastname@example.org.
The formation and registration of trusts, and the provision of independent trusteeships – both local and oﬀshore.
The creation of BEE, charitable, special and Shariah trusts compliant with regulatory and legislative requirements.
The administration of deceased estates in South Africa and abroad.
Advice on complex structures, asset restructuring and bequests in foreign jurisdictions.
Advice on emigration and immigration, foreign earnings and the application of any double taxation agreements.
Updating trust deeds to ensure they’re in line with the latest changes in the trust environment.
Updating and/or drafting of wills dealing with South African and/or foreign assets.
Advice on the establishment and management of charitable organisations, their tax status and tax deductible donations.
Advice on the potential tax consequences and reporting obligations if you hold a US passport or green card, or if you have children living in the US.
Guidance on the financial implications of life-changing events, such as getting married, divorce or the birth of a child.
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Sanlam Private Wealth (Pty) Ltd, registration number 2000/023234/07, is a licensed Financial Services Provider (FSP 37473), a registered Credit Provider (NCRCP1867) and a member of the Johannesburg Stock Exchange (‘SPW’).
All reasonable steps have been taken to ensure that the information on this website is accurate. The information does not constitute financial advice as contemplated in terms of FAIS. Professional financial advice should always be sought before making an investment decision.
Participation in Sanlam Private Wealth Portfolios is a medium to long-term investment. The value of portfolios is subject to fluctuation and past performance is not a guide to future performance. Calculations are based on a lump sum investment with gross income reinvested on the ex-dividend date. The net of fee calculation assumes a 1.15% annual management charge and total trading costs of 1% (both inclusive of VAT) on the actual portfolio turnover. Actual investment performance will differ based on the fees applicable, the actual investment date and the date of reinvestment of income. A schedule of fees and maximum commissions is available upon request.
COLLECTIVE INVESTMENT SCHEMES
The Sanlam Group is a full member of the Association for Savings and Investment SA. Collective investment schemes are generally medium to long-term investments. Past performance is not a guide to future performance, and the value of investments / units / unit trusts may go down as well as up. A schedule of fees and charges and maximum commissions is available on request from the manager, Sanlam Collective Investments (RF) Pty Ltd, a registered and approved manager in collective investment schemes in securities (‘Manager’).
Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. The manager does not provide any guarantee either with respect to the capital or the return of a portfolio. Collective investments are calculated on a net asset value basis, which is the total market value of all assets in a portfolio including any income accruals and less any deductible expenses such as audit fees, brokerage and service fees. Actual investment performance of a portfolio and an investor will differ depending on the initial fees applicable, the actual investment date, date of reinvestment of income and dividend withholding tax. Forward pricing is used.
The performance of portfolios depend on the underlying assets and variable market factors. Performance is based on NAV to NAV calculations with income reinvestments done on the ex-dividend date. Portfolios may invest in other unit trusts which levy their own fees and may result is a higher fee structure for Sanlam Private Wealth’s portfolios.
All portfolio options presented are approved collective investment schemes in terms of Collective Investment Schemes Control Act, No. 45 of 2002. Funds may from time to time invest in foreign countries and may have risks regarding liquidity, the repatriation of funds, political and macroeconomic situations, foreign exchange, tax, settlement, and the availability of information. The manager may close any portfolio to new investors in order to ensure efficient management according to applicable mandates.
The management of portfolios may be outsourced to financial services providers authorised in terms of FAIS.
TREATING CUSTOMERS FAIRLY (TCF)
As a business, Sanlam Private Wealth is committed to the principles of TCF, practicing a specific business philosophy that is based on client-centricity and treating customers fairly. Clients can be confident that TCF is central to what Sanlam Private Wealth does and can be reassured that Sanlam Private Wealth has a holistic wealth management product offering that is tailored to clients’ needs, and service that is of a professional standard.