Ensure less estate duties with all-round benefits

I am 82 years old and have R20-million invested in unit trusts. My son will inherit everything, but I am worried about his investing a lump sum like this because he has a gambling problem. I recently did an estate planning exercise and was horrified to see these unit trusts would trigger about R4-million in estate duty.

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What would you recommend I do to reduce this tax liability and ensure that my son does not spend his inheritance recklessly?

Answer

I would need to take a look at your full financial situation before I would be able to make a proper recommendation.

I will, however, talk about the mechanisms you could consider to reduce your estate duty and the structures you can put in place to prevent your son from being reckless with his inheritance.

Reducing estate duty

When it comes to estate duty, your retirement funds fall outside your estate and will not trigger estate duty.

This is why it is often useful to do a full estate analysis when you retire. We can structure your affairs to be both tax efficient while you're on pension and also ensure that, in terms of the inheritance, your estate will pay the least amount of estate duty.