When winding up an estate provision needs to be made for the following hidden costs of death. Funeral expenses can have a price tag of anywhere from R25 000 to R50 000. There are Masters’ fees, major liabilities fees – like bonds and other loans. Next are tax liabilities including income tax, estate duty fees and capital gains tax. Property or asset transfer costs, including conveyancer and evaluation fees need to be paid as well as minor liabilities like credit cards and retail cards. Even cellphone accounts need to be settled and paid for up to two months. Furthermore, if there are firearms involved in the winding up of an estate, there would be storage fees for these items. Insurance protection for assets, accounting fees and bond cancellation fees are added to the mix and then, don’t forget e-toll fees!

Next there are the actual estate costs including executor fees and advertising fees. When all is said and done these expenses can add up to 6.5% of the value of the estate before major liabilities. These fees need to be paid with cash and if cash is not available, then assets will need to be sold forcefully to cover these expenses. When assets are forcefully sold it reduces their market value by up to 20% for property and a staggering 40% for the sale of a business.

Moreover, family members left behind still have monthly overheads like school fees, rates and taxes, electricity, water and so on. If liquidity is retained within the estate, the value of the estate can be retained. One of the best ways to address this is through the provision of a life insurance product. Life insurance covers bonds and loans, estate duties, capital gains and funeral cover.

When someone joins SA Property Investors Network (SAPIN) as a member, they have access to a power team of attorneys, conveyancers, fiduciary experts and financial advisors that can assist the member in setting up their investment portfolio correctly. This provides for tax efficiency and ensures hidden costs are taken care of.

SAPIN also offers a free SmartWill valued at R550 to all members when signing up for a free SAPIN membership. In addition to a free SmartWill, paying members will receive a free SmartExecutor to the value of R770 and professional members will receive free SmartStorage to the value of R990.