One of the most dangerous misunderstandings in estate planning is this:

Many people think about what they paid for an asset, not what it is worth now.

That difference can be massive.

A property bought years ago for R900,000 may now be worth R2.5 million. A business started with very little capital may now be worth several million rand. A share portfolio built slowly over time may have grown quietly in the background.

When you pass away, your estate planning calculation is not only about what you paid. It is about what your assets are worth at the relevant valuation point.

This matters because estate duty, executor fees, and capital gains tax calculations can all be affected by asset values. If your plan is based on outdated numbers, your family may be shocked by the real value of the estate after death.

Property investors are especially exposed to this issue. A person may own multiple rental properties and feel comfortable because the bonds are being paid. But the estate may still need to deal with property values, debt, tax, executor fees, transfer realities, and liquidity.

Business owners face the same risk. A business may not have much cash in the bank, but the shares or member’s interest may have significant value. SARS also notes that valuations may be required for shares held by a deceased person in unlisted companies or close corporations.

The same applies to investment portfolios. People often see their portfolio as long-term family wealth. But if the estate needs cash, investments may need to be sold, and the timing may not be ideal.

Do not ask only:

“What did I pay for this?”

Ask:

“What would this be valued at if something happened to me today?”

Then ask:

  • Would my family have enough cash to settle estate costs?
  • Would my beneficiaries understand what each asset is worth?
  • Has my estate plan kept up with my property, business, or investment growth?
  • Is my plan built for today’s numbers or yesterday’s numbers?

Many people build wealth slowly and honestly over decades. The tragedy is when that wealth becomes vulnerable because the planning never kept up with the growth.

This is especially important for property investors and business owners, where asset values can change significantly over time.