COVERED FOR LIFE A COMPREHENSIVE GUIDE TO HELP YOU PLAN FOR THE INEVITABLE.
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Succession planning and living annuities It’s time to retire and you have invested your hard-earned retirement savings into a living annuity with the Edge World-wide Flexible Model making up part of your underlying portfolio. You, as the annuitant, may draw an annual income of between 2.5% and 17.5% of the capital value. It’s important that the drawdown not exceed the performance of the underlying fund as it will diminish the capital amount year on year. One should always consider the impact of inflation and the underlying investment fund when selecting your drawdown. Had you invested in the Edge World-Wide Flexible Model you would have earned returns around 12.5%, allowing for a greater drawdown on your investment. Unfortunately, reality does not care about your plans for retirement, and you succumb to the effects of Covid, leaving behind your wife and two children. What are your succession planning options for your living annuity? Beneficiaries can be nominated to receive the benefits of the living annuity on your death. The beneficiary may then decide whether to take the benefit in the form of a lump sum (taxable), an annuity, or a combination of the two.
Living annuities are not governed by Section 37C of the Pension Funds Act which means you are able to nominate your minor children as a beneficiary on the investment. However, your children’s legal guardian will have discretion when it comes to managing these funds until your children are old enough to manage it themself. If no beneficiary is nominated, the proceeds will be paid into your estate. You can nominate a trust as a beneficiary of the living annuity. This option can be used to protect assets, in this case the living annuity, while still allowing the beneficiaries of the trust to enjoy the benefits of the asset. There are two types of trusts that can be formed. If the founder is still alive, it is an inter vivos trust. If the trust is formed on the death of a person, it is a testamentary trust. The main use of a trust is to pass benefits to heirs without giving them full ownership. The onus is then on the trustees to administer assets in a way that will be the most appropriate. Your financial situation is unique, with varying needs and complexities. That’s why it’s always important to speak to a financial adviser to make sense of the options available to you.
109-111 Villiers Road, Cnr of 5TH Ave, Walmer, PE
Edge Financial Group turns 20 The Edge Financial Group was founded by Edward Colin Gutsche (MD) in 2001. It is an independent financial services company specialising in individual and group portfolio management, short-term insurance, retirement fund, financial and medical aid advice. Since inception, our clients have always been our priority. One of our strengths is that we do not work purely on an upfront fee-based system. Our fees are spread over the period of the client’s investment. This ensures that we work harder, stay in contact with clients and provide all our clients with more updates and reports than our opposition. We strictly adhere to all FSCA (Financial Sector Conduct Authority) regulations. Included in our compliance procedures are monthly external audits of our clients’ files to ensure that the highest standards of investment advice and ethics are maintained. Our Johannesburg office, Edge Wealth (Pty) Ltd, opened its doors in 2016 and Edge is also proud to have been awarded its Category 2 Asset Management Licence, Edge Asset Management (Pty) Ltd. The acquisition of a short-term insurance business in 2020 led to the
establishment of Edge 4 Sure (Pty) Ltd as well as the acquisition of another investment business to further grow our company. When we first opened in September 2001, we offered only the basic financial services but as our business grew so did our product offering and list of financial service providers. Edge has also grown our client, product and service provider base. We currently have more than 140 small, medium and large companies on our client list and more than R1.75bn in direct assets under management. Trust Edge, we act with the end in mind For our clients’ best interests, we are fully independent www.edgefinance.co.za or find us on Facebook Product range: retirement, pension and provident fund advice; short term insurances (commercial and personal lines); employee benefits; individual life, disability and dread disease coverage; medical aid; local and offshore property funds and investments; direct offshore investments; offshore trusts; fiduciary services.
Providing a safety net for those you leave behind Two things in life are inevitable, death and taxes. More now than ever, Covid-19 has made end of life planning a hot topic. For most of us this is not our chosen point of discussion, but it is a reality we are all having to face. Ultimately, end of life planning is creating bubble wrap for those who are left behind. It protects them by ensuring that you have sufficient liquidity to meet the unavoidable expenses associated with death, such as funeral expenses,
estate duty fees, executor’s fees, provision for debt as well as for those we leave behind. Estate planning begins with having a valid will in place and goes far beyond that, the necessity thereof is not determined by the size of your estate. It is therefore prudent to consider life cover which can create liquidity in your estate, and which can effectively speak to the wishes set out in your will. Funeral policies are also an ideal way to create initial flow of funds for
the immediate costs associated with one’s passing. A great estate planning tool in some instances would be the establishment of a trust as this can create a tax efficient structure and protection of wealth and assets for intended beneficiaries, and a legacy for causes that are close to our heart. It is important to understand that there is no one-size-fits-all approach, and a plan and strategy should be constructed for each of us taking all aspects into account.
Our respective specialists can provide these services through all the major Investment houses, insurance companies and with access to the most reputable funds.
Who should you contact? Port Elizabeth office: +27-41-5812509 Life and investments: Edward Gutsche (egutsche@edgefinance.co.za) Deborah Castagne (deborah@edgefinance.co.za) Leon Petzer (Port Elizabeth) Financial Adviser (leon@edgewealth.co.za) Medical aid: Taryn Gutsche (taryn@edgefinance.co.za Bianka Bennett (bianka@edgefinance.co.za) Employee benefits: Tanya Koertzen (tanya@edgefinance.co.za) Short-term insurance: Clinton Edwards (clinton@edgefinance.co.za) Johannesburg office reception: +27 11 214 7200 Andrew Locke andrew@edgewealth.co.za Renee Roe renee@edgewealth.co.za
YOUR LAST WILL AND TESTAMENT IN A RECENT SURVEY, WE ASKED SOUTH AFRICANS ABOUT THEIR LAST WILL AND TESTAMENT. HERE ARE SOME OF THE RESULTS.
57%
49%
77%
57% OF SOUTH AFRICANS DON’T HAVE A VALID LAST WILL AND TESTAMENT IN PLACE.
49% OF PEOPLE WITHOUT A WILL SAID THAT THEY JUST HAVEN’T GOT AROUND TO IT YET.
77% OF THE POPULATION SAID THAT COVID-19 HAS MADE THEM MORE AWARE OF THEIR LEGACY.
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in control of the process.
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Your Children’s inheritance could pass to the Government Guardian’s Fund or the appointed Guardian who may squander the inheritance.
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You lose the ability to nominate a Guardian of your choice for your minor Children.
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You can’t decide who inherits what and your Estate is distributed according to South African law.
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EXECUTOR’S FEES
IMMEDIATE EXPENSES
TESTAMENTARY TRUST FEES
MONTHLY LIVING EXPENSES
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You need a professional to wind up your Estate. Professionals cost money up to 3.5% + VAT of the value of your Estate in order to do the work. This could be hundreds of thousands of Rands. With our Legacy Ťķ indemnify up to 100% of these fees.
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ABOUT CAPITAL LEGACY
OUR MISSION IS TO GET MORE VALID WILLS IN SOUTH AFRICA AND LOWER LEGAL FEES AT DEATH FOR OUR CLIENTS.
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FINANCIAL ADVISORS TRUST US TO HELP THEIR CLIENTS WITH THEIR WILLS
YOUR #1 PROVIDER OF WILLS & ESTATES
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Wednesday 29 September 2021
Here’s why you should not put off drawing up a will
The importance of a testamentary trust A significant estate planning mechanism is to make provision in your Last Will and Testament for a testamentary trust into which some or all of your estate will devolve for the benefit of nominated heirs upon your death. Children under the age of 18 do not have capacity in law to manage their affairs and as a result are not entitled to receive inheritance as a minor other than necessary funds for daily living needs, which will be administered by the Guardians Fund or trustees of a trust. The fund is tasked with managing the inheritance of minor heirs where a will does not create a trust. Dealing with the Guardians Fund can be a frustrating process, causing difficulty for heirs which can be avoided.
Each trust should be considered individually, depending on the needs of the heir and the funds available. Advantages of a trust ● Assets bequeathed are administrated for the benefit of the heir by the trustees in accordance with the directions of the testator and discretion of the trustees; ● The trust can terminate once the heir attains the age of 18, or such later age as may be stipulated, or the trust may
terminate if the funds held by it are depleted; ● When the trust terminates and assets are still held by the trust, the heir may be entitled to receive ownership of the remaining assets; ● The administration of a minor’s inheritance is that, unlike the case of where the bequest of an immovable property is made directly to the minor, there is no restriction imposed on the trustees’ entitlement to sell the immovable property for best advantage without first obtaining (at some cost) a court order to do so. Certain heirs are incapable of managing their own affairs due to mental or physical restrictions. Alternatively, a testator may be of the view that the inheritance of an heir will be
better managed and preserved by trustees. A trust can be managed by an individual in whom the testator has confidence, such as a person with the requisite skills, like an attorney. Generally, trustees will invest funds in a prudent manner to allow for the best returns without compromising safeguarding against risky investments. Each trust should be considered individually, depending on the needs of the heir and the funds available. ● Estates department director Robert Montgomery and professional assistant Rochelle Velkers have the qualifications, knowledge and experience to draft the relevant provisions in your will.
A last will and testament is one of the most significant documents you will ever sign. A will is a legal declaration of how your estate will be distributed upon your death which may ensure that your heirs are appropriately provided for. Many people avoid concluding a will as the decision to do so can be daunting or it may be perceived as a complicated exercise. However, the following aspects should be considered: ● A will is the only way you can ensure that, after your death, your estate will be divided according to your wishes. ● Without a valid will, the result is that your estate will devolve in terms of the Intestate Succession Act, which is unlikely to be how you may have intended your assets to be distributed. The Act regulates distribution of an intestate estate depending on marital status, number of descendants of the deceased and familial relationships. Intestate estates can also be difficult to administer, burdening your family during a difficult time. ● Another important consideration of estate planning is to ensure sufficient liquidity in your estate to meet debts and expenses. Otherwise your heirs may be forced to sell assets to settle these costs, which will result in less inheritance for distribution. ● The status of children and individuals who are incapable of managing their affairs as heirs must be carefully considered. A testamentary trust allows an inheritance to be held in trust and administered by trustees according to the directions of the deceased for the benefit of a beneficiary (typically minor children and incapacitated people). The trust can be terminated after a defined period of time or continue in perpetuity, depending on the funds available and the needs of the beneficiary. ● A trust will avoid the inheritance of a minor being paid to the Guardians Fund, which could also result in unnecessary hardship. ● A will allows you to nominate a guardian for your minor children. Estates department director Robert Montgomery and professional assistant Rochelle Velkers have the qualifications, knowledge and experience to advise on and draft wills.
Wednesday 29 September 2021
What should be included in your will?
The reality of life and death is clear — now more than ever — and while your loved ones will have to face the reality of your passing in mourning, they will also have to face the reality of having to deal with administrative matters concerning the assets you leave behind. As these administrative matters can be emotionally, financially and mentally tiring, it is always advisable to make sure that you leave behind a valid will. Having an attorney to assist you with this process and help you draft a will, suited to your needs and your wishes, can make things much easier. A will is a legal document that lays out your wishes regarding the division of your property and/or assets and the care of any minor children. It is a tangible way of showing loved ones who you have left behind that you care and do not want them to struggle in your absence. Now, knowing what a will is, and the important purpose that it serves, there are a few things to consider
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when deciding what to include in your will: ● Compile a list of what you own and decide who must get what, namely, who will your beneficiaries be?In the case of minor beneficiaries (those under the age of 18): 1) Who will be their legal guardian/s? This specificity will save time and money on a high court application for such an appointment. 2) And what about a testamentary trust? This type of trust is created to manage the assets of the deceased on behalf of the beneficiaries who are unable to do so because of their status as minors; ● In the case of a surviving spouse, you could consider making provision for temporary maintenance which will maintain the surviving household upon your death; ● Who will be allowed to continue using specific property, as it is within their right to do so? and ● Who should be the executor of your estate? This could be your attorney, a close family member or a friend. 1) An executor is the person who will ensure that your estate is
divided according to your wishes, as set out in your will. He/she will also settle your unpaid debts. 2) If you decide to nominate a family member or friend, it is also wise to nominate an attorney as a co-executor. The attorney will deal with any legal issues. He/she/they must have legal standing and be approved by the master of the high court. Once you have collated all the above information, it is always a good idea to bring copies of IDs to a consultation with your attorneys to ensure that the correct details are recorded when you start drafting your will. At McWilliams & Elliott Attorneys, the oldest law firm in Port Elizabeth, we have skilled attorneys who are able to assist you with drafting your will and answer any questions you might have regarding estate planning. Book an appointment with one of our experts by contacting our offices at 041-582-1250, or visit our website for more information: http://www.mcwilliams.co.za/
Key checklist for when a loved one dies When a loved one dies: ● Obtain a medical certificate, declaring the death; ● If the death occurred at home, an ambulance service can provide you with a declaration of death; ● Make an appointment with the funeral home of your choice, and attend this meeting with your ID document, and the ID document of the deceased; ● The death must be registered within five days. The funeral director will need the deceased’s full address, details of where and when they died, occupation, spouse details and a marriage certificate, if necessary; ● A handwritten Notification of Death (BI1663) will be issued, and signed by the deceased’s doctor. The de-
ceased, next of kin and funeral director are usually required to thumbprint this document, before it is handed in at the department of home affairs; ● The funeral director will give you the original death certificate, which you can use to close bank accounts, cancel pension and medical aid; ● You can hand-pick a favourite outfit for the funeral home to dress your loved one in. Private viewing is usually allowed and can be arranged with the funeral home; ● and The funeral home will also walk you through the details (flowers, printing hymnals, choosing a coffin). This article was supplied by Gift of Dignity Funeral Services
"Giving you complete peace of mind" Mission: Gift of Dignity Funeral Services is sensitive to the various needs and requests that may be made of them in preparation of a loved one's funeral. We remain flexible in order to respect the individual needs of each family we serve. We have thoughtfully designed our approach to meeting each family's needs. Services: We manage the entire process from start to finish, which includes processing and obtaining the medical certificate, declaring that your loved one has passed, from the doctor. We also register the death at the department of home affairs, and obtain the official death certificate. Our onsite commissioner of oath helps with certifying all relevant documentation. Our aim is to give you complete peace of mind and dignity as our name suggests.
15A McAdam Street, Newton Park, Port Elizabeth 041 363 8432 / 072 983 7276 info@giftofdignity.co.za
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Wednesday 29 September 2021
Making it easier for those left behind Important documents to keep in your emergency file Some of the documents that need to be readily available in the event of your death include: ● Your original will — remember to keep this updated as your circumstances change. ● Your living will (if you have chosen to have one). ● Proof of any funeral policies you may have. These will take the financial burden off your family. ● Copy of your ID. ● Copy of your driver’s licence. ● Copy of the ID of your nominated/proposed executor. ● A copy of the IDs of your beneficiaries — this must always be kept up to date. ● A copy of your marriage certificate (and antenuptial contract, if applicable). ● Your income tax number (plus VAT number too, if applicable). ● A list of your assets, with approximate estimated values. Furniture and household items can be grouped with these. This will help you calculate your worth so that your financial planner can put a suitable plan in place for your beneficiaries after your death. ● If there is any immovable property, for instance residential homes, a copy of the relevant municipal accounts (plus a copy of title deeds, if available),
details of the existing bondholder and the bond account number will need to be provided. ● A copy of your recent bank and credit card statements (which will need to be kept updated). ● Any share certificates you may own. ● Details of any insurance policies — ensure these policies are always kept up to date. ● Employers’ details, including your latest salary slip if you are employed. ● Pension details (if applicable). ● Motor vehicle registration papers. ● List of claims in favour of the estate, therefore any money owed to you. ● List of the estate liabilities, therefore any money owed by you. ● A comprehensive list of all your online accounts, login details and passwords. ● A copy of your firearm licence(s), and details of whereabouts of the firearm(s), should you have any. ● Your medical insurance details. ● Any specific instructions you have which must be acted upon at the time of your death. — As seen on www.adattorneys.co.za
It’s in the detail: ● Create a password list that will make it easier for your loved ones to access your devices. ● Include phone, tablet, computer, email, social media accounts, and so on ● Review your social media accounts and decide what you’d like to happen with them when you die. ● Every social media platform has
different options. ● Make a list of bills with due
dates and amounts. ● Note how statements are received and payments made. Identify which bills are ongoing and which have an end date. ● Designate meaningful items to be given away to specific people. ● Consider doing so now, rather than spelling it out in your will. ● Draft a “Where to Find ...” docu-
ment identifying the location of important things your heirs might need after your death. ● Write your own obituary. Doing so will give you control over how you are publicly remembered. ● Create a message for loved ones. Write a letter, make a video, whatever you think will be most meaningful for the people who matter most.
In the Duke of Hastings we trust Now who would have thought that Bridgerton would be offering us financial advice? The recently aired Netflix period drama, which served up swoon-worthy scenes to over 82 million households in its first four weeks, owes much of its success to a certain Duke who has even managed to make money matters a little sexy. Remember when the Duke (Regé Jean Page) says he doesn’t want Daphne’s dowry and her brother replies that he’ll invest the money in a trust for her children instead? It turns out that might be a very good idea indeed… Trusts have been around for a long time, so it’s not so outlandish that the Viscount suggested such a solution. Louise Danielz, Chief Operations Officer at Sanlam Trust, says trusts have evolved in purpose. They were mostly used by rich families to protect dowries and wealth while travelling. What was progressive was for the trust to be in Daphne’s name – back in the day, being a trustee was a role reserved for men. Interestingly, trust companies originated in the Cape about 180 years ago and the world’s first trust company was The South African Association for the Administration and Settlement of Estates, established in 1834. If you’re considering following the Viscount’s example and starting a trust, there are some key things to know, according to Danielz:
everyone. Umbrella trust structures, like Sanlam’s Guardian Trust (for minors) or Protector Umbrella Trust (for major beneficiaries), can be particularly affordable options as there is no minimum investment. While there are no charges for a testamentary trust until it commences, it’s crucial to ensure there is sufficient liquidity (cash or assets that can easily be turned into cash) in the trust to maintain the assets and cover the costs involved. For example, if you leave a property in the trust, there needs to be enough liquidity for trustees to maintain it. Are there any pitfalls to be aware of when it comes to trusts? It may seem relatively simple to set up an IV Trust that complies with statutory law. However, there are several important structures and practices that need to be in place to ensure a trust is valid and not subject to any challenge. There is also the prospect of capital gains and donations tax to consider. Tax must always be a primary consideration. For example, one would not lightly transfer a primary residence into an IV Trust because of the Capital Gains Tax abatement. However, that consideration may be outweighed by the need to protect your property from creditors.
Firstly, what kind of trust should you choose? There are different types of trusts and they each serve a unique purpose.
Security is a big consideration when it comes to the administration of a trust; you need to appoint at least one independent trustee whom you can trust to do the right thing and who knows what he or she is doing. If decisions are not backed up by accurate records and signed trustee resolutions, it could lead to disputes that might play out in court.
• The Inter Vivos (IV) or Living Trust is probably the most commonly understood trust because it is set up by the Settlor or Donor during his or her lifetime, registered with the Master of the High Court, and used primarily as a financial planning tool. A living trust can reduce estate taxes, provide for minor children, and avoid the transfer of assets being supervised by the Master of the High Court – this is mostly left up to the trustees to handle. This type of trust may be revocable (the settlor can change it) or irrevocable (the terms cannot be changed without the permission of the beneficiary).
When is a Guardian Trust the right choice? Danielz concludes, “The Guardian Trust is the right choice when a minor beneficiary will receive the benefits of long-term insurance policies, i.e. endowment (five-year investment plans) and pure risk (only provides death cover with no investment element) policies. A trust such as the Sanlam Trust Guardian Trust can be nominated to accept the funds on behalf of a minor beneficiary, irrespective of whether these amounts are relatively small.”
• Testamentary trusts are also common. These trust are only created at the death of the founder, in terms of his or her will. They are subject to the successful winding-up of the deceased estate and may not be amended after the death of the founder. The nomination of an independent executor and trustee is extremely important. • Sanlam Trust registered its Guardian Trust with the Master in 2002. It is an umbrella trust, which means it manages the funds of hundreds of vested beneficiaries under one trust deed. This makes setting up the individual sub-trusts relatively easy, with minimum delay. The Guardian Trust receives the proceeds of long-term insurance, which can include endowment and pure risk cover policies. The major benefit of this kind of trust is that beneficiaries’ assets are protected by professionals who always act in the best interests of the minor. Do you have to be wealthy to consider a trust? There are a few alternatives when it comes to trusts these days, making them accessible to
Sanlam is a Licensed Financial Services Provider.
Article supplied by Sanlam Trust
Confdence Rule 55:
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Wednesday 29 September 2021
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The ins and outs of winding up a deceased estate Many families across the country had to face the tragic loss of their loved ones due to Covid-19. The unexpected death of a loved has become a sad reality for so many of us and the bureaucracy and red-tape surrounding the administration of the deceased estate may seem like a daunting task. When a loved one dies, one of the natural things to do is to contact a funeral director. A reputable funeral director will assist in obtaining a death notice as well as the death certificate. This does away with the need for the bereaved to go to the department of home affairs to obtain these documents. It is always advisable to ensure that you make a few copies of the original death certificate and death notice and have these copies certified by a commissioner of oaths. The estate of the deceased must be reported to the master of the high court within 14 days from the date of death. The master must preferably be notified by the nominated executor or the person in possession of the will. The winding up process may be complicated, and it is advisable to consult people who have fiduciary and estate planning experience. A good administrator will never act as a dictator and should ideally administer the estate in consultation with the beneficiaries. Beneficiaries should be provided with regular progress reports. The administration of the estate or the “winding up” process is dealt with in terms of the Administration of Deceased Estates Act 66 of 1965 (as amended) and this act applies regardless of whether the deceased person has died with (also referred to as testate) or without (referred to as intestate) a valid will. To appoint an executor, the master of the high court must be notified of the death through certain prescribed documents. The master examines the documents and once satisfied with the validity of the will, the master will appoint either an executor by issuing letters of executorship or appoint a master’s representative by issuing a letter of au-
EXPERT ADVICE: It is advisable to consult people with fiduciary and estate planning experience to wind up an estate
to have a will drafted. It is of immense importance to ensure that it is a valid will. Keep your will simple and ensure that you advise at least two people where the original will may be found. It is very important to discuss your will with all beneficiaries while you are alive. This should assist in preventing unnecessary family disputes arising after your death. Other important information and documents to be included in the file are: ● Identity document of the testator; ● Marriage certificate; ● An antenuptial contract if married out of community of property; ● The tax reference number of the deceased The will and income tax assessment of the previous fiA very important part of estate planning is nancial year; thority. If the value of an estate is less than R250,000 a letter of authority is issued in terms of Section 18(3) of Act 66 of 1963. It is often referred to as the short way of winding up an estate. If the value of the estate exceeds R250,000 a letter of executorship is issued and the full procedure as set out in the act must be followed. This is referred to as the long winding up of an estate. The following document is important to keep in a dedicated file to assist an executor or to assist with the winding up of a deceased estate:
● A list of immovable property with erf numbers of properties; ● The original title deeds of the properties; ● Particulars of any bonds on the properties; ● Any lease agreements; ● Vehicle registration documents and financing of the vehicles if there is an outstanding balance; ● Bank statements and any correspondence relating to the financial affairs; ● All original share certificates;Investments;All monies owing to the deceased including any outstanding loans; ● Any business interests of the deceased; ● The particulars of the deceased’s financial broker; ● Employer’s details; ● Pension fund or provident fund details; ● Firearm licences; ● Hospital and medical accounts; and ● All policies that pay out on the life of the deceased. The funds of a life insurance policy will get paid out to a nominated beneficiary and not into an estate. What is very important is that the proceeds of the life policy does form part of the estate duty calculation. If it is left to a spouse, it is free from estate duty or if it is part of a buy and sell agreement it is excluded from estate duty. Always ensure that there is sufficient cash in an estate to meet expenses, claims, estate duty and masters’ and executors’ fees. One way of achieving this is to get life insurance cover and there must be an understanding that this policy will be used to cover costs. In recent years, social media has consumed our lives. Different platforms have different requirements relating to either closing the social media account or the memorisation of an account. For example, Facebook would memorialise an account if a person related to the deceased, informs Facebook. To close a Facebook account certain documents, such as the death certificate, are required.
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Wednesday 29 September 2021
Estate planning has many facets for the modern family The definition of a family structure can take more than one form today. Family structures now include divorced couples, remarriage, blended family households, domestic partnerships between couples who have chosen not to marry, same-sex couples, single parents and many others. Estranged family members are also common. Surveys looking into the home structures of how children are being brought up are reflective of changing societies. At the end of 2018, up to 43% of children were being raised in single-parent households in SA, usually by the mother. Only about 3% lived with their fathers. It is also estimated that four in 10 marriages end up in divorce in SA. Estate planning has, despite its rigidly structured processes, adapted its handling processes to serve the changing family dynamics of society better. “Diverse family relationships have a direct effect on the ways estate planning are addressed and managed,” Onalenna Disipi, a Discovery-certified financial adviser, said. “A dynamic family structure with a relatively simple or humble estate can sometimes be complex. “The intricacies of the modern family dynamic mean relationships alone require careful thought throughout the process. “The modern family now requires less of a one-size-fits-all approach to structuring an estate plan — it needs to be as unique as the family is.”
Establishing harmony
said. “Removing fear from the equation is best to do before initiating conversations. “Ultimately, you want to achieve a level of understanding that, when the time comes, you won’t leave loved ones having to try to cope with estate matters when they are likely to be at their most emotionally vulnerable. “It will touch on complex issues, which won’t be any easier if postponed for another time.”
Preparing for the estate planning meeting
als in the context of your planning may be a useful approach and help to minimise any misunderstanding or divisive consequences. “One of the most challenging aspects has to do with a will. “There are many who unfortunately regard it as a document that reflects the testator’s true opinion of them. “If there are existing sensitivities of this nature, it can take on a whole new layer of challenge in the planning process. “Then there are perspectives around the true value of things. “Some things or assets are valuable because they are sentimental. “Perspectives around this can differ. “Those who inherit sometimes try to quantify all types of things by attaching a price tag.” Conversations could go a long way to avoid disagreements, Disipi said. “Yes, estate planning is a serious enough business that it must be done very carefully, but it needn’t be done independently and behind closed doors. “In many instances, involving family members during the planning stages, where appropriate, can be a valuable differentiator and bring about a more harmonious outcome.”
Structuring an estate plan will need to establish the family dynamic upfront. “In any scenario, young or older children can feature in the mix — even adult children,” Disipi said. “Handling an estate plan almost demands that individuals approach it with an open attitude, foresight and respect for all involved. “Whatever decisions you make will likely have a direct effect on the interrelationships Talking through it of other family members. A significant part of estate planning is “Carefully considering people as individu- structuring assets according to wishes in a way
that streamlines the transition from one generation to another. Estate planning can to some extent involve more members of a family than just the client. Conversations during planning stages can be helpful. An inclusive rather than secretive approach is beneficial. Sharing perspectives allows for more options to be explored, addressing concerns in a way that considers everyone whose future will be affected by a plan. Conversations must factor in the age of various family members. “Young children and teenagers aren’t mentally or emotionally ready to contemplate not having their family around, so conversation isn’t necessarily appropriate in this instance,” Disipi said. “Older and adult children can comprehend the responsibility. “There may be perspectives that weren’t considered before that come to light through conversation and many families may find that they can achieve positive outcomes together.”
How to talk to a family about an estate plan
“It’s understandable that death and one’s own mortality — or that of someone close to you — is a subject many are fearful of,” Disipi
Families can involve a mediator — a neutral third party — who can initiate confidential discussions with family members independently ahead of a family get-together. This helps family members prepare themselves and understand the process. A mediator can get a clearer sense of potential hidden agendas or possible issues that may arise. A mediator should not have existing relationships with the family. An estate-planning attorney, legal or financial adviser can also participate in the discussion process. Such participants know and understand the broader significance of handling the process correctly. Being part of these discussions enables them to understand how a structured plan may result in family disharmony, and instead find a better way to divide things — and not the family — at such a sensitive time. Having professionals involved in discussions helps create a safe environment for sensitive points to be raised. Their role is to moderate the conversation, ensuring resolutions and consensual agreement are reached. Approaching the complexities of a dynamic household, no matter what its structure, with clear goals helps the process of estate planning. If the aspects that make a family unique can be addressed in ways most relevant to their circumstances, the right solution can be agreed on.
INTRODUCING THE DISCOVERY ESTATE PRESERVER
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