Most people spend their lives working hard to build wealth for their families.
But very few stop to ask an uncomfortable question:
When you die, how much of your estate will actually go to your family — and how much will go to taxes, fees, and administration costs?
The reality is that dying can be surprisingly expensive. Without proper estate planning, a significant portion of what you’ve built could be lost to taxes and costs before your loved ones receive anything.
Let’s unpack two of the biggest factors.
1. HOW MUCH OF YOUR ESTATE WILL SARS TAKE?
In South Africa, your estate may be subject to Estate Duty, which is essentially a tax on the value of your estate when you pass away.
The current rules are:
- 0% estate duty on the first R3.5 million of your estate (known as the abatement).
- 20% estate duty on the value between R3.5 million and R30 million.
- 25% estate duty on the value above R30 million.
There are some important deductions:
Certain assets do not trigger estate duty, including:
- Assets left to your spouse
- Retirement funds (such as pension, provident, and retirement annuity funds)
However, many assets do form part of your estate, including:
- Property
- Investments
- Business interests
- Vehicles
- Cash and personal assets
For many families, the estate duty bill alone can run into hundreds of thousands — or even millions — of rands.
And that’s only the first layer of cost.
2. THE HIDDEN COSTS OF DYING
Beyond estate duty, there are several administration costs that are often overlooked.
These costs are paid from the estate before beneficiaries receive their inheritance.
EXECUTOR’S FEES
The executor responsible for winding up the estate is legally entitled to charge up to:
3.5% of the gross estate value
plus 15% VAT
This means that on a R5 million estate, executor fees alone could be approximately R201,250.
MASTER’S FEES
The Master of the High Court charges fees to register and process the estate.
These fees are relatively small but still form part of the cost structure.
CONVEYANCING FEES
If property must be transferred to heirs, conveyancing attorneys will charge transfer fees.
These costs can easily run into tens of thousands of rands depending on the value of the property.
OUTSTANDING DEBT AND TAXES
Before heirs receive anything, the estate must also settle:
- Outstanding income tax
- Capital gains tax triggered at death
- Any debts or loans
- Funeral expenses
These liabilities can significantly reduce the value of what remains.
WHY PROPER ESTATE PLANNING MATTERS
Without proper planning, estates often face:
- Unnecessary tax exposure
- Liquidity problems (where there is not enough cash to pay the costs)
- Delays in distributing assets to beneficiaries
- Family stress during an already difficult time
Good estate planning is about ensuring:
- Your family receives the maximum benefit
- Taxes are structured efficiently
- Costs are planned for in advance
- Your wishes are carried out smoothly
A properly structured estate plan can make a meaningful difference to the financial security of your loved ones.
FINAL THOUGHT
Most people spend decades building wealth.
But what really matters is how much of that wealth actually reaches your family.
Estate planning is not about death — it’s about protecting the people you care about most.