A Decade of innovation in global estate planning

Tony van Niekerk, COVER in a conversation with Harry Joffe, Head of Legal at Discovery Life 

In an industry often characterised by incremental change and regulatory constraint, true innovation can feel rare.  

That’s why speaking to Harry Joffe, Head of Legal at Discovery Life, about their Dollar Life Plan was a glimpse into how smart product evolution can solve real-world needs for South Africans navigating an increasingly globalised reality. 

The Discovery Dollar Life Plan has quietly matured into a powerful financial tool, addressing complex estate planning, foreign investment exposure, and cross-border liquidity needs with elegance and legal integrity. Originally launched in 2014, the product has seen a marked uptick in interest, especially as South Africans contend with rand volatility, increased global mobility, and the challenges of foreign estate tax regimes. 

At its core, the Dollar Life Plan offers life cover denominated in US dollars, with premiums payable in dollars. Clients can pay these premiums via two primary routes. The first is through their R1 million Single Discretionary Allowance (SDA), a simple method whereby Discovery debits the client’s rand account and transfers the funds offshore monthly. Discovery handles all South African Reserve Bank (SARB) reporting, removing the burden of tax clearance or additional admin. 

But as Harry points out, global South Africans, especially those who have emigrated and relinquished tax residency, often no longer qualify for the SDA. In response, Discovery expanded the product to allow for direct offshore premium payments. Clients can pay annual premiums from foreign accounts, circumventing many local foreign exchange limitations. More importantly, this flexibility enables foreign trusts, companies, and even Foundations to own Dollar Life Plans, unlocking sophisticated estate planning and business assurance opportunities. 

Solving real cross-border challenges – One of the most compelling use cases for a Dollar Life Plan is foreign estate tax (situs tax) mitigation. For South Africans with properties in jurisdictions like the UK or US, death can trigger significant foreign tax obligations of up to 40% above certain thresholds. Traditionally, South African estates struggle to fund these liabilities due to capital controls and a lack of offshore liquidity. A dollar-denominated policy, paid into a foreign account, elegantly addresses this, ensuring that taxes are settled promptly without depleting local assets. 

---

---

What’s more, Dollar Life Plans do not form part of the South African estate as long as they are structured correctly. Issued through Discovery’s Guernsey office and paid out only to foreign accounts outside South Africa, the policies avoid Section 3(3)(a) estate duty implications as they are not domestic policies, saving clients potentially up to 20% – 25% in estate duties.  

While many might assume a Dollar Life Plan is the preserve of the ultra-wealthy, Discovery has taken deliberate steps to make it accessible to middle-class South Africans. The entry-level premium is just $50 per month, or R900 at an exchange rate of R18/$, which is well within reach of many middle-income households. 

Further affordability comes through currency protection mechanisms. The Vitality Exchange Rate Protector locks in an exchange rate at the start of every three-year cycle. Plus, for the first three periods (ie first nine years), clients get a 15% discount on their locked-in exchange rates. This feature makes the policy even more attractive as it protects against rand volatility.   

For a limited time, your clients can lock in additional exchange rate discounts at a rate of R14.90/$ for the next three years when they take out a Dollar Life Plan with the Vitality Exchange Rate Protector before 30 June 2025.  

Introducing the short form trust – Estate planning across borders introduces further complexity, especially when beneficiaries are minors or where funds must be protected for specific purposes such as paying taxes or supporting dependents abroad. Enter Discovery’s Short Form Foreign Trust, a lean, cost-effective structure (just $450 annually) established through a partner trust company in Mauritius. 

This trust activates immediately but has no assets and remains empty until the policyholder’s death. At that stage, it will accept the payout and execute predefined wishes as drafted in a formal letter of wishes, such as settling estate taxes, safeguarding funds for children, or fulfilling buy-and-sell agreements in offshore structures. The simplicity, affordability, and strategic clarity that this structure provides have made it immensely popular, even among single-parent families and clients with modest estates. 

What makes the Dollar Life Plan exceptional is not just the foresight of its creators, but the way it has evolved through adviser feedback. As Harry shared, one adviser used the Dollar Life Plan to create inheritance liquidity for children while directing group life and retirement funds to a surviving spouse. Simple, elegant, and tax efficient. 

In an era of global citizens and digital wealth, financial solutions must keep pace with client realities. Discovery’s Dollar Life Plan has done just that – it has transitioned from a niche offering to a flexible, estate-friendly, globally relevant solution, serving the needs of middle-class earners, high-net-worth individuals, and international business owners alike. 

As Harry puts it, innovation often stems from listening to clients, advisers, or the evolving landscape of financial planning. For financial advisers, it’s becoming less of a “nice to have” and more of a must-have conversation in every cross-border or estate planning client engagement.