Estate Planning Basics and Why It’s Important

A Guide for South Africans | Brought to you by MMT Financial Services

Estate planning may sound like something only the wealthy need to worry about — but in reality, it’s something every South African adult should consider. Whether you’re a small business owner, a salaried employee, or a parent, estate planning is essential for protecting your family, your assets, and your legacy.

In this comprehensive guide, we’ll break down the estate planning essentials you need to know in 2025, explain how to avoid common pitfalls, and show how MMT Financial Services can help you navigate it all with confidence.

1. What Is Estate Planning?

Estate planning refers to the process of organizing your financial affairs to ensure that your assets are distributed according to your wishes after death or incapacity. It includes preparing a valid will, setting up trusts, making provisions for dependents, and minimising taxes and administrative costs.

In South Africa, if you die without a valid will (intestate), the distribution of your estate is governed by the Intestate Succession Act 81 of 1987, which may not reflect your intentions. That’s why estate planning is so important.

2. Key Components of an Estate Plan

An effective estate plan typically includes:

1. A Valid Will

This legal document outlines who inherits what from your estate. It must be signed in the presence of two competent witnesses who are not beneficiaries.

2. Trusts

Trusts can be used to manage and protect assets for minor children, people with disabilities, or to avoid estate duty. In 2025, trusts remain a key estate planning tool but must be set up correctly to avoid tax inefficiencies.

3. Executor Appointment

You’ll need to appoint an executor who will administer your estate. This person or institution handles everything from debt settlement to asset distribution.

4. Power of Attorney or Living Will

While you’re alive, a general or special power of attorney allows someone to act on your behalf for certain matters. A living will outlines your medical preferences if you’re unable to communicate.

3. Why Estate Planning Matters

1. Protects Your Loved Ones

Without clear instructions, your family could face delays, legal disputes, or financial hardship.

2. Reduces Estate Duty and Taxes

Estate duty in South Africa is 20% on estates above R3.5 million (and 25% on portions over R30 million). Smart planning can significantly reduce this burden.

3. Avoids Intestate Succession

Dying without a will means your estate will be distributed per the Intestate Succession Act — not necessarily the way you’d want.

4. Ensures Business Continuity

If you own a business, estate planning helps ensure your company doesn’t collapse or get sold off unexpectedly upon your passing.

4. The Estate Administration Process

Understanding what happens after someone dies can help you better prepare. The key steps are:

1. Report the Death to the Master of the High Court.

2. Register the Estate and submit a will (if there is one).

3. Appoint the Executor, who will receive Letters of Executorship.

4. Advertise and Settle Debts using estate funds.

5. Distribute the Remaining Assets to beneficiaries as per the will.

MMT Financial Services can assist with:

• Preparing and lodging the necessary documents

• Acting as professional executors

• Handling the tax aspects of the estate

5. Common Estate Planning Mistakes (and How to Avoid Them)

1. Not Having a Will – Over 70% of South Africans die intestate.

2. Outdated Beneficiary Details – Always update policies and trusts after major life events.

3. Ignoring Taxes – Estate duty, capital gains tax, and executor fees can erode your estate.

4. Choosing the Wrong Executor – Choose someone qualified and impartial, like MMT Financial Services.

5. No Business Succession Plan – Without a plan, your business may not survive you.

6. How MMT Financial Services Can Help

At MMT Financial Services, we offer comprehensive estate planning support, including:

Will Drafting and Safekeeping

Let our experts ensure your will is legally valid, correctly structured, and stored safely.

Tax Planning

We calculate potential estate duty, capital gains tax, and other liabilities — then help you reduce them.

Trust Formation

We assist with setting up and managing family and testamentary trusts.

Executor Services

MMT can act as a professional, impartial executor, saving your family stress and delays.

Business Succession Planning

We help entrepreneurs and business owners create plans to ensure their businesses survive and thrive after their passing.

7. Life Stages and Estate Planning Priorities

Your estate planning needs change over time. Here’s a quick guide:

 In Your 20s

• Create your first will

• Set up a power of attorney

• Name beneficiaries on life policies

 In Your 30s

• Update your will for children or marriage

• Consider life insurance

• Start building long-term wealth

 In Your 40s

• Estate duty planning becomes critical

• Reassess business succession and trust needs

• Consider setting up inter vivos trusts

 In Your 50s+

• Finalise all planning

• Review and adjust investment strategies

• Get a professional executor in place

MMT is here for you at every stage of life — making sure your plan evolves with you.

8. Estate Planning and SARS

SARS plays a major role in estate administration. MMT ensures all tax aspects are handled efficiently, including:

• Filing the deceased’s final tax return

• Submitting tax clearance certificates

• Calculating CGT on assets

• Claiming allowable deductions to reduce tax payable

Without proper planning, SARS could claim a significant portion of your estate. MMT helps reduce this risk.

9. What You Need to Start Your Estate Plan

Here’s a quick checklist:

• List of all assets and liabilities

• Life insurance policies and beneficiaries

• Business documents

• Marriage and divorce certificates

• ID and those of beneficiaries

• Details of your preferred executor

10. Frequently Asked Questions

Q: Is a handwritten will valid in South Africa?Yes, if signed and witnessed properly — but it's safer to consult professionals.

Q: Can I change my will?Yes, you can create a new will or add a codicil at any time.

Q: What if I own property abroad?You may need multiple wills depending on the jurisdiction — MMT can advise.

Estate planning isn’t just about death — it’s about ensuring peace of mind, protecting your family, and preserving your legacy. It allows you to maintain control over your assets and make thoughtful choices that will benefit your loved ones long after you’re gone.

At MMT Financial Services, we understand the legal and financial landscape in South Africa and are ready to guide you through every step — from your first will to the final handover of your estate.

Contact us today to get started with professional estate planning that protects what matters most.