Managing your Estate

You might have heard the term estate and may have wondered what it means. Here is an explanation:

When a mother expects a child, the parents are excited and plan the baby's room, clothing and name. They even have dreams for the unborn child's future, but few realise that the birth of a child brings certain responsibilities. One of these is that the child has to be registered with the local authorities after birth in order for the child to one day get an identity document, passport, employment and a bank account. And with the registration of the child' let[s say it[s YOU - an estate is registered. The word "estate" means "property or possessions". Once your birth has been registered, you automatically become the "managing director" of your estate; However, as a minor you cannot make decisions about managing your estate until the age of 18. Until then, your parents are the directors of your estate, managing it on your behalf. When you turn 18 you become an "Independent" legal entity with full authority to make decisions, earn an income, and buy, sell and accumulate possessions or property in your estate. Now you and you alone, make all the decisions concerning your estate.

Death and your Estate

While you are still alive, you decide who should inherit your possessions after your death. This decision is recorded in writing and is called your Last Will and Testament (see Last Will and Testament). If the value of the assets in your estate are very high, estate duty will be payable. (This amount is determined by law) A person (executor) will be appointed to see to your last wishes and deregister the estate that was registered at your birth. Your estate will be wound up and anybody or everybody you nominated will receive your possessions as you had stipulated in your Last Will and Testament. The executor will take his/her fees allowed by law for his / her services. (See the section Appointing an Executor for more information.) If you had unpaid debt and there was not sufficient funds in your estate to pay that, the executor will have to sell the possessions to pay these debts. If you had bought some of these possessions on credit, creditors normally demands credit insurance on your life. Should you pass away, these goods are then fully paid and your estate does not owe the creditors anything. Life insurance can be taken out to compensate for any shortfall in your estate. It is therefore very important to plan the affairs of your estate before and after your death.

Debt and your Estate

When still alive, it can happen that you mismanage your estate, or due to unforeseen circumstances, you could find yourself in a situation where you have more debt than you can pay. If you have possessions in your estate, you can sell these to save the situation. If the possessions are not valuable enough to pay off all the debt, the estate can be sequestrated (be declared bankrupt). That is done by a lawyer or advocate in the Supreme Court.

Marriage and your Estate

Should you get married, your spouse will also have an estate of his/her own. It is important to decide how you are going to get married. If you marry in community of property, the two estates unite. You are then running a joint estate as partners: both your and your spouse's debt and possessions are included in the estate. This estate can only be split by the Supreme Court by applying for a divorce. If the estate should be sequestrated or placed under administration, the debt is not yours or your spouse's, but belongs to the estate and both are equally responsible. It is also important to determine what will happen with the possessions or debt in the estate should either of you die. The estate will continue to exist, even though the one partner is deceased. Should you get married in terms of an ante nuptial contract, the two estates remain separate. You manage your estate and your spouse manages his / hers.