Have you created your Living Will?
Let your wishes for your medical care live on through your Living Will
Planning for death can be like making that dreaded dentist’s appointment: you don’t want to do it, but you must, because you know it will save much pain going forward!
A Living Will guides your family and doctors in honouring your wishes for a dignified death when you are no longer able to express those wishes. It affords your family peace of mind during an extremely difficult time.
What is a Living Will?
A Living Will is a written statement detailing a person’s wishes regarding their future medical treatment, when they are unable to give their informed consent regarding such treatment.
A Living Will often stipulates that you not be kept alive through artificial life support should you have no reasonable chance of recovery from a general condition or vegetative state. An Advance Directive deals with the medical treatment a person would like (or not like) administered to them concerning a specific medical condition or ailment. So, the Living Will and Advance Directive deal with your end-of-life wishes while you are still alive. Don’t incorporate your Living Will into your Last Will and Testament – it is a separate document serving a different purpose.
Legal position in South Africa
In South Africa, all patients have a right to refuse treatment, but may not ask or expect a doctor to end their life. Doctors have taken an oath to save lives, so cannot be forced to abide by a Living Will where they feel that there is hope of recovery for a patient.
The Living Will is not a binding legal document; rather it communicates your wishes to guide your family when they have to take decisions about your medical treatment in the final stages of your life.
Why do I need one?
Despite medical advances extending life, the natural decline of health at life-end means you may find yourself with an irreversible medical condition severely restricting your quality of life. Many people do not want, for example, to be on permanent life support or in a permanent vegetative state. Then, a medical professional may look to your family for guidance. Here, a Living Will or Advance Directive, while not legally binding, can save your family from enormous emotional stress and even financial burden.
Your Living Will can also record your wishes about organ donation and cremation or burial.
What must your medical professional check?
1. The signatory to the Living Will or Advance Directive was over 18 years.
2.The patient had the mental capacity to make their own decisions when they signed their Living Will.
3. The patient was fully informed about their condition and proposed treatment.
4. The patient did not change their mind after signing the document.
How to get a Living Will in place
There are many standard Living Wills that can be downloaded from the internet and completed according to your wishes.
At Chartered Legacy & Trust, we can prepare your Living Will at no additional cost when we draft your Will. Speak to your RetiremeantTM Specialist today about getting your Last Will and Testament and Living Will updated or in place if not already done!
Once complete, you can send copies of your Living Will to your family and doctors, so that they are immediately aware of your wishes. Your treating doctor must have access to your Living Will in order to carry out its directives.
Dealing with death is never easy, but having your affairs in order through your Last Will and Testament and Living Will can ensure you receive dignified and humane medical treatment according to your wishes while facilitating a smooth transition for your family.
Chartered Wealth Solutions’ RetiremeantTM Specialist and Certified Financial Planner®, James Carvalho, assesses the value of rental property as an investment.
Over the past ten years or so, I have been party to numerous conversations that have debated the merits of rental property. I have frequently wondered what lies at the heart of this affiliation to property.
I have concluded that it is most likely the ability to own something tangible – you can see and touch it. (You seldom hear braai-side talk of share portfolios or unit trust portfolios!)
While property is certainly a viable option for investing, what many may not realise (if unprepared for the rigors of renting out property) is that this investment can be a source of persistent headaches.
The case for diversity
In 2011, in the wake of the 2008 global financial crisis, one of my clients was overwhelmed by her emotion in our meeting. She owned eight properties and suddenly, four of them were standing open. Three of the tenants had lost their jobs and one of them had moved to Cape Town.
Rental payments from her remaining tenants were barely covering her bond costs, and she still had three bonds over the properties.
For years, I had been encouraging her to diversify her risk in her investments. But, as so often happens, she was lured by the exaggerated returns in the property market, based on the promise of the boom years from 2002 to 2008. And the unfortunate consequence has been that, at present, she has managed to sell only two of the properties, and her rental incomes are not beating inflation, and nor is the annual growth on her property.
Still a sound investment?
Through a planning process, we as financial planners would establish what the optimum investment return would be for your money to sustain your lifestyle and to last the term of your retirement.
Generally, we find retired people aim at achieving a return of approximately inflation plus 4% with their funds.
In light of this goal, I note some of my clients’ responses, when I ask by how much their rental fees had increased. “Nothing this year; it’s been a tough year for my tenant,” or, “My tenant just lost his job so I am giving him a contribution holiday.”
Perhaps the most concerning comment was that the tenant would not pay and possession equals nine tenths of the law.
Despite these tales of rental regret, there are still many investors whose investment in property has given a positive return.
I would suggest that, if you are thinking of buying property to rent out, you consider the following:
- Buying off-plan is appealing as there are no transfer duties. Transfer duties is a sunk cost: it is doubtful that you will recover this cost.
- Schedule fixed rent increases in your lease – it obviates having to negotiate these every year. Rent should increase by more than inflation every year.
- Establish a lease of twelve months, renewable with three months’ notice, thereby allowing you time to find a new tenant.
- If you are a tax-payer, bond your rental property so that you can write off the interest against the rent.
- Rental income is taxable and needs to be added to your tax return.
- When you sell a property, other than your primary residence, it will attract Capital Gains Tax.
- You need to be able to pay for repairs to the property; as a rule of thumb, you should keep 10% of the rent aside for maintenance.
- If you don’t have the patience to deal with tenants, use an agent to rent out the property. This usually comes at a cost of 10% of the rent, but it is often money well spent.
In conclusion, I reiterate the timeless sound advice to ensure you diversify between all assets when investing: shares, cash, property stock, and corporate and government bonds.
And, remember, that your financial planner is always at hand to guide and advise you.
Recently, my client admitted that she is no longer capable of managing her everyday financial affairs. How can you and your planner prepare for this, should it happen to you?
Dr Sylvia Kree turned 91 recently and has many interests. She also still goes to gym regularly which helps her keep fit. “It is your responsibility to look after my financial affairs, and my responsibility to look after my health,” she regularly says to me.
Of late, Sylvia finds it difficult to manage daily financial matters, like banking, and she is daunted by the fast pace of changing technology. She also does not have any children and her nearest relative lives in the Cape. ‘Who will look after me when I am not capable of doing so myself?’ she asked.
Sylvia and I discussed appointing an administrator over her affairs. Sylvia agreed. “It’s comforting to know that my affairs are in capable hands. I feel reassured and confident that you are there for me, even now,” she says. “I do not understand all the financial terms, and also cannot retain that kind of information. So having someone taking over that responsibility is a huge relief.”
Start thinking about your wishes should this ever happen to you. Prepare for when you can no longer care for yourself. Take time to look at retirement villages and facilities before you need to – where would you like to stay? Do you want to move only once? Then choose a village with assisted living and frail care facilities – most of these cover that cost by a life rights arrangement. Talk this through with your spouse and your planner so that you are prepared before you are compelled to move because of injury or illness. Many of these establishments have waiting lists in excess of two to five years, so choose where you might like to live and put your name on the list – there is no obligation, so you can change our mind.
By thinking this through whilst you are still capable of contributing to the conversation will make the process so much simpler and in line with what you want.
When do you institute a power of attorney?
If you leave it too long, and there are early signs of dementia, a power of attorney may not hold. Under current legislation, the power of attorney would not endure in situations where you are no longer able to understand the impact of such consent. Rather pre-empt the situation and be prepared for such an eventuality.
Consider whom you would entrust with a power of attorney.
Build additional costs in your financial plan for such a situation. The cost and strain on family members can be overwhelming. The carer or child has to go through an onerous process to be appointed administrator or appoint a third party as administrator and/or curator.
Planners can facilitate and advice around these matters, having established relationships with administrators and curators. Experienced planners have been through this process before, and are aware of aspects of planning that you may not be. You should have a trust relationship with your planner that ensures that he or she is planning in your own best interests … and a time when you are most vulnerable should be no different.
Article by Christina Forman, Certified Financial Planner and Retirement Specialist at Chartered Wealth Solutions. Click here to access the second article in the series: When a loved one can no longer manage their financial affairs. One of our clients also shares their personal experience of the Implications of being a parents’ tax consultant and having power of attorney.
This May, Chartered Wealth Eastern Cape clients were treated to an evening at The Club on 12 Bird Street in the company of master raconteur, Rob Caskie.
While his audience enjoyed a sumptuous dinner and warming winter drinks, Rob wove a terrible tale of the Anglo-Zulu clash at Isandlwana. As a Chartered client himself, Rob used this account of the most dramatic British failure in battle to demonstrate the need to plan carefully … whether in the military or with money. Both can equip you to prepare for the unexpected.
Chartered Wealth Eastern Cape CEO, Donovan Adams, welcomed the guests to the historic The Club on 12 Bird Street. Pre-dinner drinks were enjoyed in the wood-panelled bar dating to its Victorian origins, with a comforting fire burning in the grate. The Club is a regular local venue for various community events, including Music Trivia evenings and High Teas … and this evening in May was no different, as the Chartered family in the Eastern Cape mingled and enjoyed catching up with fellow clients. Visiting from Johannesburg was Chartered Director and Retire Successfully brand ambassador, Kim Potgieter.