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News > ODs in the News > Everybody should be told

Everybody should be told

Give to Trust without prejudicing heirs. John Frith (1962S) shares information not always disclosed by estate planners.

John writes:

Estate duty is supposedly charged on just net assets; in fact it is charged on net assets + cash to pay the tax.

I won a Bloemfontein Appeal Court Judgement as executor to my late father's estate. The case was SARS vs Executor E/L W E Frith which held that if the entire residue of an estate is left to the surviving spouse or a recognised charity it can to be deducted from the dutiable amount.

By making pre-legacy specific bequests one can reduce the residue to be enough to pay the tax and a portion for the named charity.

An algebraic formula computes the value to be given as pre-legacy specific bequests to heirs. It forms part of Your Family & Charity codicil which can be attached to any will. Testator choses whether to leave all the benefit to the charity or to split giving some of the benefit of not taxing the cash.

You don't need to change the existing Will and there are no risks as the standard Will already is the worst position. SARS litigation already won.

R260 000 can be given to Trust in a R10 million estate while heirs inheritance does not change.

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