Don't let your executor pay estate duty on the cash assets used to pay the estate duty

Sounds silly but this is a fact and unless you take action in your will your heirs will be prejudiced by the "tax on tax".

When executors prepare L&Ds (Liquidation & Distribution) accounts they list all the assets then they deduct assets to pay liabilities and estate expenses leaving remaining assets to be pay estate duty if any and to distribute to heirs. Estate duty is applied to these remaining assets after deducting tax free bequests, adding deemed assets and deducting allowances.

This is the way executors have been taught and what SARS expects.

You might say just change it. I wanted to with my father's estate and ended up in court. The effect of the court case was that only those estates with a spouse or charity as the sole residuary heir results in the cash assets being deducted in the estate duty computation.

I developed YFC Codicil to give any testator the opportunity to avoid the extra by attached the codicil to their will.