Sanlam Indie’s CEO Edwin Theron lists five financial actions he wishes he’d taken in his early twenties.
There are a few conversations that are inherently difficult – and at the top of the list has to be talking about the end of life. Whether it’s because we feel unprepared, are unsettled by the thought of our mortality, or because it’ll inevitably lead to awkward conversations about money, most of us avoid the topic.
But when planning to leave a legacy, it’s about preparing for a time when we’re no longer around and how we’d like to be remembered by loved ones. One of the wisest decisions you can make on your journey to building a successful legacy is openly talking about (and planning for) death. FYI: This is a conversation made way more necessary by Covid.
The fact is that talking about death won’t kill us, but not talking about it could mean leaving our loved ones with unexpected financial and legal burdens when we’re no longer around.
So, deep breath! Are you ready? Business Development Consultant for Momentum Trust Dani van Vuuren is here to guide you towards a successful legacy – one that will give you peace of mind and secure your family’s financial well-being. All it takes is there five basic steps…
1/ Have an executable will
Your Will should contain the latest info aligned with your wishes. “Sounds simple enough, right? But naming beneficiaries is extremely important, and not being specific can often cause unforeseen complications, such as unnecessary delays and additional costs when wrapping up your estates,” says Dani.
2/ Be as specific as possible
Be as specific and precise as possible to ensure your Will is valid and executable. “If you die without leaving a valid Will, your estate will devolve according to the Intestate Succession Act. This means that your estate (including your home) will be divided amongst your surviving spouse, children, parents, siblings or bloodline relatives according to a set formula, which is helpful – unless one or more of those beneficiaries are not whom you intended,” warns Dani.
3/ Keep a safe record of these key documents
Get into the habit of keeping important documents safe and accessible. Alongside a copy of your Will, you should also (amongst others) ensure the following is available:
● The location of your title deed and record of any outstanding bonds and all insurance.
● Your up-to-date rates and tax receipts.
● The details of the leases on all the property you own.
● The location of your water, lights and refuse deposit receipts.
● Licences for possessions such as vehicles and firearms.
● Share certificates and outstanding loan accounts owed to you.
● A copy of any foreign Will pertaining to assets held in another jurisdiction.
● A copy of a trust deed where you are either a trustee and/or a trust beneficiary.
● A copy of contracts entered into including an antenuptial contract and divorce orders.
4/ Understand the cost of deceased estates
“If there is a cash shortfall in your estate, your beneficiaries (heirs) may opt to pay it, but they’ll need to do so upfront. If they can’t, the executor of your Will shall have no choice but to sell off some or all of your assets, which may include your family home,” says Dani.
A shortfall will also prolong the winding up of your estate, causing unnecessary emotional and financial trauma for your loved ones. Liquidity is key to wealth preservation and protection. Don’t forget to exercise good habits.
5/ Start the good (legacy) habits right now
“Save, invest, avoid debt and spend wisely. All of this will go a long way in helping you leave a lasting and positive legacy. Remember, legacy isn’t bound by age or time. Start building yours now,” says Dani.