Once a person?s gross estate has been established, there are a number of deductions allowed which reduce the estate value and give rise to a net estate figure. Although the list in the Act can become exhaustive, here are some of the more common examples:

• Expenses such as funeral costs, masters fees and executors fees

• Liabilities such as outstanding loans (car or home), income tax (including Capital Gains Tax)

• Bequests to spouse as well as certain Public Benefit Organisations

• Accrual claims (payable to surviving spouse's estate)

Abatement

Finally, once a net estate is arrived at, the act allows for an abatement of R3.5-million to be deducted before concluding whether there is dutiable estate on which the 20 percent rate will be levied. In other words, only if one?s net estate is more than R3.5-million will there be any estate duty payable.

If one is left in the position of having a potential dutiable estate, all is not lost and there are a number of strategies and techniques one may adopt in order to maximise one?s estate structure. These may include anything from setting up an intervivos trust, making allowable donations and even taking out life cover to ensure one?s dependants enjoy the full benefit of your legacy. Of course, exploring the intricacies of these as well as a host of other alternatives in this format would be nothing short of negligent. Not only because of the complex nature of some of the mechanisms, but also because such strategies will be highly dependant on the individual?s specific circumstances.

For this reason it would be strongly advisable to seek out the professional opinion of a Certified Financial Planner that specialises in estate planning to guide you through the decision making process and arrive at a strategy that suits your needs and wishes.

acsis Limited is an authorised financial services provider. The response to the question covers some of the issues in a general and factual manner and does not constitute advice. It is important to consult with a financial planner who, after an analysis of the individuals? personal needs, goals and circumstances, will be able to provide comprehensive and appropriate advice.