Why R3.5 Million is the Magic Number in Estate Planning

Why R3.5 Million is the Magic Number in Estate Planning

When it comes to protecting your estate and building generational wealth, the number R3.5 million stands out—and not by accident. This isn’t just a round number we picked to grab attention. It’s written directly into South Africa’s Estate Duty Act as the tax-free threshold available to every individual.

If you’re approaching retirement—or already retired—this number can unlock a powerful strategy: legally move R3.5 million out of your estate, pay no donations tax, create protected income, and cut your estate duty bill by hundreds of thousands.

Let’s explore why this matters so much.

What the Law Says: The Estate Duty Act & Section 7C

Under the Estate Duty Act, every individual has a R3.5 million exemption. That means the first R3.5 million of your estate is not subject to estate duty (normally taxed at 20% or more).

Now here’s where it gets powerful:

🔹 Instead of waiting until death to use this exemption through your Will, we use it today, during your lifetime, by loaning R3.5 million to a trust.

🔹 We structure the loan SARS-compliantly using Section 7C of the Income Tax Act, and reduce it over time using the R100,000 annual donations exemption.

With the right paperwork, this is 100% legal, strategic, and powerful.

The EverFree Strategy: Your Lifetime Wealth Plan

We’ve used trusts for decades to protect wealth. But now we’ve taken it a step further with the EverFree Trust Income Strategy, backed by a custom EverFree Calculator.

It models two core strategies:

1. Trust & Will: Instant Estate Duty Savings

By simply drafting a trust and bequeathing R3.5 million to it in your Will, your heirs can save R700,000 in estate duty, R122,500 in executor’s fees, and R18,375 in VAT on the fee—a total saving of R840,875.

2. Trust & Loan: Wealth that Grows Every Year

Now here’s the long-game:

If you loan R3.5 million to your trust while you’re alive, the benefit grows each year. As your trust repays the loan using investment income, more and more of your wealth becomes fully estate duty exempt.

💡 Use our calculator to see how the savings grow over time—year by year.

Retired? Here’s Why This Matters More Than Ever

Most of our clients are retired or heading into retirement. They rely on capital to generate income.

The EverFree strategy helps them:

• Turn capital into income without triggering donations tax

• Reduce their estate while they’re still alive

• Protect their wealth for their children and grandchildren

“A Trust Is Too Expensive…” Or Is It?

We often hear, “But isn’t a trust expensive?”

Our response:

❗️It’s more expensive not to use one.

If you do nothing, your estate could lose hundreds of thousands in unnecessary tax, fees, and delays. With a trust and a smart loan structure, those costs can be legally avoided—and your family gets more.

See It in Action

Watch our 7-minute video to see the entire EverFree strategy explained in plain English, and try our calculator to see your own numbers.

🔗 [Try the calculator and Watch The Video ]

You’ve worked hard to build your wealth. Let the law work for you—before it works against your estate.

Albert Schuurman

Creator of the EverFree calculators