Preparing and simplifying your life as you retire

I have just completed the process of doing my mother’s estate. I am the executor of her estate. She died almost three years ago. Nothing prepares one for this process and I am going to make sure that I simplify my life and make it easier for my family when I die.

Below are some of the lessons I have learnt over the past three years.

My mother is the oldest in her generation. I knew that once she died much of the history that she carried would be lost. After weeks of sorting through mounds of paperwork we were able to get a sense of order and direction.

 Lesson one: Make sure that you sort your own paperwork, document passwords, photographs and memoirs into some kind of order. We always think we will do this tomorrow and then never get to it. It can be one of the great uncluttering exercises to do as you enter this season. I also understood once she had died that I value her history and want to be able to have it for my children and grandchildren.

My mother had a will and I knew we would find a copy somewhere but on the day after her death I was able to call her accountant who had a copy and sent it through to me.

Lesson two: Ensure that you have a will and annually think about any changes you may want to make. Give your accountant or lawyer a copy as well as keeping a copy filed where your family can find it. It may even be advisable to send a copy to each of your heirs, if you are comfortable to do that.

Understanding the process of what is needed as the executor is onerous. It will be best to work alongside an accountant, lawyer or bank but not to abdicate the role you need to play. You will need to find and supply documents, fill in forms and ensure that the process does not lie collecting dust on someone’s desk.

Lesson three:  Think ahead and chat to those involved who will manage your estate. It is not possible to have an executor who lives overseas as in many cases one needs to be available to open bank accounts.  In my case my children do live internationally and I have ensured that the process will be managed on their behalf by those I trust together with the right experience.

My mother did not have all her policies and investments together and still had much paper work around policies that were no longer valid. This made the process long and involved writing to many companies to check on validation. We ran a process offered by the insurance industry to track any policies against her ID number. In this process we discovered a policy that was not on this list and where an error had occurred more than ten years back by the insurance company. We were lucky to eventually get this policy paid out together with an extra payment after we contacted the ombudsman on the neglect of this company.

Lesson four: Work through all your paperwork and get rid of policies that are no longer valid. Keep all the valid policies in one file with a summary list.  Review this list and file annually.

There are many expenses in the weeks after the passing of a loved one. My mom did have a funeral policy but this money still took more than a month to access. We were able to put aside some money on the day she died that helped us to manage the expenses.

Lesson five: It will depend on your situation as to the plans you need to make around cash flow after a death. If you have a partner, ensure that you have separate bank accounts so that the surviving spouse can continue to transact after the death. Make sure with small children that you have policies in place that can pay out as soon as possible to keep the family provided for. The banks are very strict around rules related to estate bank accounts.

At the point when we had filled in all the forms around pay-outs and the investments had been paid into the estate bank account, I handed over the process to the professionals to do the calculations for final payments to SARS, working out the capital gains tax and possible estate duty. This produced the liquidation and distribution account that needs to be presented to the Master of the Supreme Court. In our case it took three months before we had final sign off. There is then a process of advertising that takes 21 days and then final distribution can be made to heirs.

Lesson six: Your estate and process will depend on the complexity of your investments and instructions in your will. Without a will the process is a nightmare and in the hands of the state. Keep all documents if one spouse has died. They requested a copy of my dad’s final L and D account and he died 47 years ago. Luckily my mother had thrown nothing away but it was not easy to find either and if we had not been thorough we may have thrown it away. Blended families will also need much more care to ensure that your life after your death is not more painful than your heirs deserve.

Take the time, do the work and simplify your life today. You will be thanked often by your heirs.

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