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Estates and Wills
Sunday, March 1, 2015
Managing right

When you have been left money by a relative, or someone has put money or property in a trust for you, it’s most beneficial to have professional administration specialists managing the estate. Administrators who work at financial institutions are professionally trained and required to have the knowledge and experience needed to manage affairs in ways that best serve the clients’ interests.

“There are numerous types of trusts, settlement funds, investments, and services, and even more laws that govern their administration,” says Mthokozisi Bhengu, Institutional Channel Manager at Standard Trust Limited. “Those who are not qualified can easily become confused while working their way through such laws.”
Established and trusted financial institutions like Standard Trust Limited, a subsidiary of Standard Bank have the resources and skills to administer a range of fiduciary services, as well as to report back to the beneficiaries, South African Revenue Services and the Master of the High Court regarding the management of the administration services.
Below are the different types of services that are best presided over by a financial administrator:

  • Settlement funds administration - officially appointed trustees will ask a financial institution to set up a settlement trust with the pay-outs from insurance policies, Road Accident Fund claims, and medical negligent claims for beneficiaries who can’t manage their own affairs.
  • Drafting and review of wills - administrators assist you by providing advice on what the law permits and on how to most effectively manage your family dynamics and expectations in relation to drafting your will.
  • Safe custody services - provided by most banks to keep your original will and related documents in a secure vault, safe from loss, theft, or damage. A range of administrative activities is needed to ensure accurate and up-to-date records are kept, that only authorised people may access your documents, and that the necessary legal compliance is in place.
  • Estate administration - this is aimed at enhancing and maintaining the financial security of your family after your passing. The estate of the deceased can be a complex mix of assets and is subject to many different laws, so a professional executor should be assigned to the task in your will.

The executor represents the people whom you want to inherit your assets (estate) to ensure they get their inheritance. This service also makes sure administration costs, transfer fees, and taxes related to the process are minimised.

  • Beneficiary funds administration - created for minor children of deceased parents who were members of a pension fund. The law is very specific as to how those funds are managed to ensure the children have enough money for food, clothing, and schooling until they are 18, and do not permit a guardian or caregiver to abuse these funds.

The trustees of the pension fund decide how much of a member’s pension pay-out to allocate to a child and/or minor beneficiary and appoint an administrator to manage the money.

  • Trust fund administration - The administration of a trust entails the receiving, controlling and protecting of trust assets. This requires that investments are made according to the stipulations of the trust deed, the needs of the beneficiaries and investment principles.

“All the activities described above are strictly regulated by law,” says Mr Bhengu. “Administrators follow set procedures to ensure what they do for you is legal. They also consult closely with you, as the client, so your needs are catered for. Among their other duties, financial administrators must ensure that estate and income tax obligations are kept to a minimum.”
Most financial institutions offer these services at nominal fees. However, there are significant financial benefits in having professionals take responsibility for administering trusts, beneficiary funds, wills, and estates.
“Having an expert manage your estate will result in financial security for your family and, ultimately, peace of mind for you,” concludes Mr Bhengu.
 

Copyright © Insurance Times and Investments® Vol:28.3 1st March, 2015
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