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Category:
Insurance News
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Life Insurance
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Sanlam Trust /
November 2007
The
Importance
of Offshore
Fiduciary
Service
Providers
Since the relaxation of exchange control measures, more and more
South Africans have been investing offshore, with important
implications for their estate planning. According to Berrie Botha,
chief executive of Sanlam Trust, it has therefore become an absolute
necessity to spend time on proper estate planning, especially when
your assets are located both in South Africa and abroad.
The
purpose of proper estate planning is to arrange the client's estate
in a way that will enable him to reach his objectives in dealing
with his assets and liabilities. These objectives should make
provision for the management of the client's estate during his
lifetime as well as thereafter. It is therefore important that both
short and long term planning goals should be set and implemented
when drafting a proper estate plan.
Another consequence of the increased international investment
exposure is that South Africans are automatically exposed to
offshore fiduciary services, which include wills for their offshore
assets.
According to Botha a will is an absolute necessity for anyone with
assets. If, however, you own property in Portugal and/or
investments in Jersey, for instance, the chances are that you need
an offshore will as well. Whether it is necessary to draft a
separate offshore will, as opposed to drafting one worldwide will,
depends mainly on three factors: where your offshore assets are
located, who is administering your offshore investments and in which
products your offshore assets are invested.
“The
legal requirements for the execution of a will in another country
may be different from those applicable in South Africa. It may
therefore well happen that certain bequests contained in your South
African will would not be recognised in a foreign country. If your
South African will has been drafted in Afrikaans, it would be
necessary to have it translated and sealed before forwarding it to
the overseas executor/ agent – a time-consuming and costly
exercise,” says Botha.
There are several other benefits to having a separate offshore will:
administration of the offshore estate is carried out parallel to the
administration of the South African assets; an executor/ agent who
is familiar with the procedures required in those territories can
save time and costs; and a professional will drafter within the
jurisdiction of the will can provide you with timeous advice of any
potential taxation and succession dangers related to assets outside
South Africa.
Botha further points out that the choice of a professional licensed
offshore service provider to act as executor or as agent for your
executor under a power of attorney (or as trustee of your offshore
trust) is vital. “It is important that you receive the support of an
established and nationwide South African institution, for instance a
trust company who has service level agreements with such offshore
service provider.”
Where more than one will exists, it is crucial that the documents
should dovetail with one another and one should not have the effect
of revoking the other. The same thought process that goes into
drafting a South African will should go into drafting an offshore
will. Part and parcel of a customised and holistic estate planning
exercise is that all the relevant circumstances are factored in and
all the available options to the individual are explored.
“When taking the time to formulate a proper estate plan, whether for
South African or offshore assets, the following universal principles
remain true: keep it simple; keep clear and accurate details of your
assets and beneficiaries; do not attempt to formulate your own
estate plan without the help of experts; and remember to revise your
planning and will(s) regularly to ensure that it keeps up with
changing circumstances,” Botha concluded.
Article supplied by Sanlam Trust
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