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Ask a Tax Man – Can I tell my kids how to bequeath their inheritance?

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Q

Hi, please advise me, I feel that I need to change my Will. I have two sons, their father and I have been divorced for many years, we do not have any grand children at this stage. I unfortunately have no contact with my eldest son, who I feel, has allowed his relationship with his girlfriend to come between him and myself and his younger brother.

My question is this: I have a sizable sum of money for retirement that I have been advised to instruct in my Will to be put into two annuities, one for each son at my death. Should my eldest son pass away before the annuity pays out to him can I determine who it goes to? I do not want the money I bequeathed him to go to his girlfriend or my ex. In this eventuality I would like for it to go to his brother. – Elna

A

Hi Elna, Thank you for your question. Unfortunately when it comes to estate planning we cannot always plan for what our heart want for those close to us. You have a classic war between your heart and your brain. Currently your heart is winning.

I always advise my clients: “Look at your Will as a work in progress that needs attention at least once a year”.  Doing this gives you the benefit of changing your Will when you see fit. Remember nothing is cast in stone and a Will can always be changed as the need arises.


Are you taking advantage of the annual R100,000 donation tax exemption to decrease your Estate Duty liability?


No one knows what the future holds. You might mend the relationship with your son in a few years and then feel different about the whole situation.  I have clients changing their Will every six months depending who is in their good graces.

Unfortunately you won’t be able to dictate from the grave what your eldest son can do with his inheritance (annuity) as soon as it is bequeathed to him. The inheritance (annuity) will form part of his estate and he can spend and bequeath the inheritance as he sees fit. Furthermore an annuity product won’t allow such a term as leaving money to his brother if he passes way.

The only advice I can offer is the following: State in your Will that all inheritance that you bequeath to your sons are exempt from any combined or communal estate that they might have in future.  This will protect them to some degree.

Protecting them from themselves is not up to you, your sons will have to make their own decisions in life and take responsibility for decisions. Your alternative is not to leave any money to your eldest son at this stage.


Got a burning tax question? E-mail mariette@hometimes.co.za  and we will be sure to assist you.


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Who is Armando Small?

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Small is a certified tax adviser and owner of Capstone Group. His company provides a range of services from bookkeeping, audits and tax services to secretarial and trust services. He is a self-proclaimed Jack-of-All-Trades who will admit that he is still not entirely sure of what he wants to do with his life. What he does know, however, is that he is not interested in taking employment; he wants to be an employer

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