When most people think about retirement planning, their minds go straight to income: Will my money last? How much can I draw? While these are important questions, a complete plan goes further. It also asks: What happens to my assets, my income streams, and my legacy when I’m gone?
Estate planning isn’t just about what happens after death. It’s about making sure that during your lifetime and afterwards, your family is protected, your wishes are honoured, and your wealth is used wisely. In South Africa, this is especially important because of the legal, tax, and practical complications that arise when family members live abroad.
Why it matters more in retirement
By the time you reach retirement, your financial affairs are often at their most complex. You may hold retirement funds, living annuities, property, and discretionary investments. At the same time, you might want to provide for a spouse, support grandchildren, or leave a legacy to charities or trusts. Without a clear plan, these good intentions can easily be lost to delays, disputes, or unnecessary tax.
For South Africans with children or beneficiaries in other jurisdictions, the picture becomes even more complicated. Different countries have different inheritance laws and tax regimes. What may be straightforward locally can trigger unexpected tax bills or administrative headaches abroad. For example, an inheritance left to a child in the UK or the US may face estate duty in South Africa as well as inheritance or income taxes in that country. This so-called “double taxation” can erode the value of your legacy if not properly planned for.
The essentials of a sound estate plan
A current will: This is the cornerstone of any estate plan. Too many retirees still have outdated wills that don’t reflect their wishes or the realities of their family circumstances. If your children live overseas, your will should be clear on how assets are to be transferred and whether a local or foreign executor is best suited to handle them.
Updated beneficiary nominations: Retirement funds and annuities often bypass your will and go directly to nominated beneficiaries. If these aren’t updated, trustees may allocate benefits differently from what you intended, creating confusion and possible conflict.
Cross-border considerations: Where children live abroad, it may be necessary to consider offshore wills, trusts, or structures that comply with the laws of the relevant jurisdiction. Professional advice here is crucial.
Liquidity: Your heirs may inherit valuable assets but no cash to settle debts, estate duty, or ongoing expenses. Building liquidity into your estate—whether through life cover, accessible investments, or a trust—helps prevent unnecessary hardship.
Tax efficiency: Estate duty, capital gains tax, and foreign taxes can all diminish what you leave behind. Structuring your estate properly can reduce this burden and ensure more of your wealth reaches your family.
The human side
Estate planning isn’t just a technical exercise—it’s about family harmony. Too often we’ve seen disputes arise between siblings or delays in transferring assets because no one thought through the practicalities. Clear communication, proper documentation, and professional guidance can spare your loved ones unnecessary stress at an already difficult time.
A final thought
Retirement is about more than making sure you will be okay. It’s also about ensuring your family is looked after and your legacy preserved when you’re no longer here. For South Africans with children abroad, estate planning is not optional—it’s essential. Done well, it protects not only your wealth but also your family relationships, sparing them conflict and ensuring that your hard work truly benefits the people you love.
Dirk Groeneveld, Certified Financial Planner
t. 083 261 9287
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