Estate Planning for Directors and Professionals in South Africa: Protecting Your Family and Your Legacy

Why Estate Planning Looks Different for Directors and Professionals

You’ve worked hard to build your career. You’ve taken responsibility — as a director, trustee, partner, or professional — and with that responsibility comes risk. Not just commercial risk, but personal risk.

Many South Africans assume that because they operate through a company, close corporation, or professional practice, their personal estates are automatically protected. You see, that assumption can be dangerously wrong.

Estate planning for directors and professionals in South Africa requires a more careful, more strategic approach. One that understands how personal liability, deceased estate administration, wills, and succession planning intersect — sometimes years after decisions were made.

At Benaters, we understand that this isn’t just about wealth. It’s about family.

When Personal Liability Becomes a Personal Problem

The Limits of the “Corporate Veil”

South African company law recognises a company as a separate legal person. But that separation is not absolute.

Under the Companies Act 71 of 2008, directors can be held personally liable in specific circumstances — particularly where there has been reckless trading, gross negligence, or a breach of fiduciary duties. Section 22 prohibits reckless trading, while sections 76 and 77 set out directors’ duties and potential personal liability.

If a company later fails, a liquidator may investigate historic conduct. Claims often arise years after the decisions that triggered them — sometimes after retirement, and sometimes after death.

SARS and Personal Exposure

The Tax Administration Act 28 of 2011 gives SARS wide-ranging powers. Where a person who controlled or was regularly involved in the financial affairs of a business acted negligently or fraudulently, SARS may pursue that individual personally for unpaid taxes.

Similar provisions exist under the Value-Added Tax Act 89 of 1991. Importantly, negligence — not just fraud — can be enough.

In a nutshell: tax exposure does not necessarily die with the company.

Professional Negligence Risk

Doctors, lawyers, accountants, engineers, and other professionals face an additional reality. Regardless of the structure used, individuals remain personally liable for their own professional conduct.

Professional indemnity insurance is essential — but it does not replace proper estate planning. Claims may exceed policy limits, fall outside cover, or arise after retirement or death.

What Happens When Liability Meets a Deceased Estate?

When someone passes away, their estate is reported to the Master of the High Court, and an executor is appointed to administer the estate.

The executor must:

• Identify all assets and liabilities

• Advertise for creditors

• Prepare a liquidation and distribution account

• Settle valid claims before distributing inheritances

If a liability claim exists — or emerges during administration — it must be dealt with before heirs receive anything. Without proper planning, this can place surviving spouses and children under severe financial strain.

We’ve seen families blindsided by claims they never knew existed.

Estate Planning South Africa: Practical Protection Strategies

1. A Properly Drafted Will Is Non-Negotiable

A professionally drafted will is the foundation of estate planning in South Africa — especially for directors and professionals.

Your will should:

• Appoint a competent executor

• Provide clear instructions for dealing with contingent or delayed claims

• Address business interests and shareholdings

• Prevent unintended intestate succession

Without a valid will, the Intestate Succession Act 81 of 1987 determines who inherits — often with unintended consequences.

This is not template territory. Will drafting for professionals requires experience and precision.

2. Liquidity Planning Matters More Than You Think

Estate duty in South Africa is currently levied at:

• 20% on the first R30 million

• 25% above R30 million

Add executor’s fees, administration costs, and potential claims, and liquidity becomes critical.

If an estate lacks cash, assets may need to be sold quickly — often at unfavourable prices. Proper planning may include:

• Appropriately structured life insurance

• Cash reserves

• Investment portfolios aligned with estate needs

The bottom line? Liquidity protects dignity.

3. Trusts — Powerful, But Not a Shortcut

Trusts can be effective estate planning tools when used correctly. Assets properly transferred to a trust generally do not form part of a personal estate.

However, South African courts and the Master of the High Court scrutinise trusts closely. A trust that is treated as the founder’s alter ego may be disregarded entirely.

Trust planning must be:

• Legitimate

• Properly administered

• Supported by independent trustees

• Aligned with genuine estate planning objectives

We believe in doing things properly — not aggressively.

4. Separation of Personal and Business Affairs

Blurring personal and business finances is one of the fastest ways to create risk.

Clear separation:

• Supports corporate governance

• Reduces personal exposure

• Strengthens estate planning outcomes

This is as much about discipline as it is about documents.

Cross-Border Estate Planning: An Added Layer of Complexity

Many South Africans hold assets abroad or live overseas while retaining South African connections.

Cross-border estate planning must consider:

• Multiple wills

• Foreign succession laws

• Double taxation risks

• Offshore asset reporting

• Recognition of executors across jurisdictions

A South African will alone may not be enough. Coordination is essential — and mistakes are expensive.

How Benaters Helps You Plan with Confidence

Estate planning is not a once-off event. It’s a process that evolves as your life, responsibilities, and risk profile change.

At Benaters, we assist with:

• Estate planning South Africa

• Wills South Africa and will drafting

• Deceased estate administration

• Executor guidance and support

• Trust structuring

• Cross-border estate planning

We understand the pressure professionals carry — and the families standing behind them.

We believe in family. Yours and ours.

Let’s Talk

Estate planning for directors and professionals isn’t about fear. It’s about foresight.

If you’re unsure whether your current plan would withstand a liability claim, a SARS investigation, or the scrutiny of the Master of the High Court, now is the time to ask the questions — calmly, carefully, and with the right advisors.

Let’s talk. Together, we’ll make sure your legacy reaches the people it’s meant to — properly.