TAX3703 - Taxation
of Estates Study Guide
(Summary Notes And
Revision Questions)
What is estate planning?
Estate planning enables people to arrange their financial affairs in such a way that they can enjoy
maximum benefit from their assets during their lifetime and that their heirs can derive...
TAX3703 - Taxation
of Estates Study Guide
(Summary Notes And
Revision Questions)
, TAX3703/103
Contents
Page
STUDY UNIT 9 ............................................................................................................................ 3
STUDY UNIT 10 ........................................................................................................................ 15
STUDY UNIT 11 ........................................................................................................................ 41
SELF-ASSESSMENT SOLUTIONS FOR EACH STUDY UNIT ................................................ 57
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Tax Act as of 30 September 2015. This should not affect the content of this module. However, should
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2
, TAX3703/103
STUDY UNIT 9
Study unit
9
INTRODUCTION
STUDY PROGRAMME
LEARNING OUTCOMES
PRESCRIBED STUDY MATERIAL FOR THIS STUDY
UNIT
CONTENT OF THE STUDY UNIT
9.1 The meaning and purpose of estate planning
9.2 Objectives of estate planning
9.3 Legal requirements
9.4 Summary
Up to this point in the module, you have studied the administration of a deceased estate and learnt
how to calculate the estate duty of an estate upon the death of an individual. In this section, you
will learn about estate planning. An estate comprises the assets and the liabilities that an indivi-
dual, referred to as the "planner", accumulates during his/her lifetime, which he/she leaves behind
at his/her death. Estate planning may be defined as the process of creating and managing a plan
that is designed to
preserve, increase and protect an estate planner's assets during his/her lifetime
ensure the most effective and beneficial distribution of these assets to succeeding generations
on the planner's death, in accordance with his/her wishes
Estate planning does not revolve solely around the making of a last will and testament, or the
structuring of an estate planner's affairs in order to reduce estate duty. It involves taking into
account the estate planners' financial, economic, social and psychological needs in relation to the
estate, themselves, and their family and beneficiaries. Estate planning is not a once-off activity; it
is a process that can change throughout the planner's lifetime and therefore, the plan should have
built-in flexibility. Estate planning involves the setting of goals or objectives, deciding on appro-
priate estate-planning tools to meet these objectives, and setting timeframes in which to execute
the estate plan.
In the next few study units, you will consider the basic elements of an effective estate plan, starting
by looking at the estate-planning objectives.
STUDY PROGRAMME
You should complete this study unit in week 11 of the study programme.
You should spend a minimum of 5 hours on the study unit.
LEARNING OUTCOMES
After you have completed this study unit, you should be able to
explain what estate planning is
explain the reasons for estate planning
describe the estate-planning objectives
4
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