Estate planning isn’t just for the wealthy – in its simplest form, it is a switch: you are planning for an event, and when it happens you want the switch to be flipped and everything to work. And without a warm body in this country that can do everything that has to be done, things can get complicated.

AMANDA VISSER: Many South African families have become world residents, with parents and children living [on] different continents. This can make estate planning and the execution of a will quite tricky if there is not sufficient consideration given to the potential pitfalls and getting it wrong.

Chris Murphy, vice chair of the Fiduciary Institute of Southern Africa [Fisa] is here with me, Amanda Visser, to talk us through some of the important hurdles you may encounter.

Chris, first off, can you run us through a few scenarios that may present themselves if your heirs are residing overseas?

CHRIS MURPHY: Yes. Thanks, Amanda. The reality is that most of us these days just sign a will, leaving everything to X, Y, Z – and we think it’s all going to work out.

But obviously there are practicalities around moveable items that have to go overseas.

For example, if you want to leave a firearm to an overseas heir, that’s almost impossible with regard to import and export impacts, licensing and SAPS [South African Police Service].

If you want to leave the grand piano to relatives overseas you have to be very specific as to whether the costs of having that grand piano insured and delivered overseas by a courier is met by the estate, because it’s not generally permissible that the costs of something like that are allowed in the estate. It’s only in the process of drafting a will [that this is possible] – if you said, for example: ‘The cost of delivery of my grand piano to my niece in Ireland must be borne by the estate.’

And then obviously the normal items like jewellery are always going to be subject to local export and import tariffs, costs of delivery and the risk.

If you’re leaving properties that are in South Africa, or portions thereof, to overseas heirs – are they entitled in terms of their jurisdictions and law to hold the properties here? What are the tax regimes regarding capital gains tax, etc?

So, it’s not just a simple one-page rule saying: ‘I leave it all to my niece.’

You have to do a lot of homework in advance to establish what is allowable from South Africa to outside, and what is allowable in the foreign country to receive.

Even simple things like shares, for example – if you have a share portfolio here, do the local share registrars have specific obligations that are required to be met before you can transfer those shares?

So unfortunately, the homework involved upfront to establish what it is you want to give to somebody, and who it is, is quite important.

AMANDA VISSER: The other matter that you have to consider then is the executor. And if you have your heirs overseas, is it likely that you will have to appoint an overseas executor? Run us through that process.

CHRIS MURPHY: Remember that the administration process or the administration of an estate in South Africa is governed by South African law if the person passed away here or was a South African citizen who passed away overseas on holiday, for example.

Many people, when it comes to nominating an executor, would nominate the closest family member. So, a spouse would generally appoint his spouse in the will as the executor. Failing the children, somebody else.

When it comes to somebody else or the children actually residing overseas and not being in South Africa, that’s when you have major issues – because obviously from whether you look at FICA [Financial Intelligence Centre Act] requirements, securities requirements, SARS [South African Revenue Service] attendances, etc. – not having somebody here in the country who can present themselves in person to some institutions like SARS, or being able to provide FICA  and documentation and copies of passports, etc, that are required, you then could run into difficulties and delays.

It’s not impossible, but it can cause delays. And in an estate, you don’t want delays.

AMANDA VISSER: What would be your overall recommendation in this situation?

CHRIS MURPHY: First up, you’ve got to have a local executor, and you could then decide on the possibility of having a co-executor who happens to reside overseas. But they would have to choose as their domicile someone here in South Africa.

So, what it would mean [is that] if somebody wants to sue the estate and issue court documents, they should be able to serve them here in South Africa.

The court also wants to make sure that if they want to remove an executor, they can serve the removal notices on the executor here in South Africa.

Costs in tracking down overseas executors, and trying to serve documents on them, is not easy.

So, my standard advice generally is to say to somebody: ‘Are your executors in South Africa?’

If they say ‘Some are, some aren’t’ – or on what basis, or is there a chance that your local executors may end up overseas?

In the modern world, children get up and go and work in foreign countries all the time.

Just always keep focusing and factoring in that you want a warm body in this country that can do everything that they have to do – with oversight from overseas rather – but don’t have one overseas-domiciled executor because it just creates problems.

Brought to you by the Fiduciary Institute of Southern Africa (Fisa). With acknowledgment to Moneyweb, the original article can be found at: https://www.moneyweb.co.za/in-depth/fisa/family-not-all-in-sa-important-tips-for-when-you-die/