Month: May 2019

change-your-will

Changing circumstances? Change Your Will

Like most things in life, sometimes your Will needs to change.

Your Will details how you would like your assets to be distributed after you pass away. In part, it embodies how you would like to be remembered by those you love when you are gone.

Most of life’s significant “changes” may trigger a Will revision: birth of a child, death of a family member, divorce, marriage, re-marriage and relocation of you or your beneficiaries (within South Africa or abroad).
The executor nominated in your Will may also need to change – for example, if the nominated person moves offshore – or you may have a change of heart about your nominated beneficiaries. Any changes to your asset structures (for instance, as a result of retirement) can mean a review of your Will to ensure that it still fulfils your wishes. Here are details on some aspects:

Children

When a person under the age of 18 stands to inherit, we generally recommend that a trust be used to safeguard the inheritance for the child and prevent it from being administered by the Guardian’s Fund. When a child is to inherit, your Will may need to include provisions to create a trust through your Will if a registered family trust does not already exist. Parents should nominate guardians for their children in their Wills. When your children reach age 18, guardianship falls away and you can remove this provision from your Will.

Divorce

After a divorce, the law gives a “grace period” within which to update your Will. If you pass away within three months of the divorce, the law assumes that you were still going to change your Will and will treat your ex-spouse as though they passed away before you. However, if you have not updated your Will in the three months following your divorce, this protection lapses as the law assumes that you did not want to change your Will. As a result, your ex-spouse may inherit from you according to the provisions of your latest Will.

Offshore assets

Another reason to revise your Will may be if you acquire offshore assets. Most movable assets – cash, investments, vehicles, personal and household effects – situated in a foreign country can be governed by your South African Will, but exercise caution with immovable property and larger investments.

Depending on the jurisdiction, you may wish to draft an offshore Will and take specialist legal tax advice for those assets, since not all countries have the freedom of testation that South Africa does and various countries have different legal rules about how to deal with your assets on death. There are also special tax concessions regarding an offshore inheritance that is never repatriated to South Africa – if you have inherited an offshore asset, ask your financial planner for details!

How to change your Will

Most frequently, the best way to update your will is to make a new one to replace the old. You can also draw a codicil to update your Will, but the original Will and original codicil must be kept together and must “talk” to each other by cross-referencing the codicil to the Will provisions. The simplest option, though, is to draw a new Will reflecting your current wishes – any outdated portions of your old Will can then also be revised.
It is never advisable to write on your Will to try to change the provisions. Handwritten wills, and handwriting on an original Will, will create problems for your beneficiaries and lead to delays in the winding up of your estate or your Will being declared invalid!

If you want to change your Will, or if you have any questions about changing your Will, the team at Chartered Legacy & Trust can guide you through the process and help you to navigate the legal labyrinth to leave a lasting legacy for your loved ones.

edward-kieswetter-featured

SARS Commissioner comes with commendable credentials

edward-kieswetter-1While chatting with clients and friends following this year’s Budget Speech, the phrase, “at least” was frequent feature: “At least it was Tito Mboweni” or “At least Ramaphosa is President” or “At least, it isn’t so-and-so” (I leave specific names to your imagination!).

Regarding our new SARS Commissioner, though, we tax practitioners and experts are far more positive.

Why so hopeful, you wonder … and rightly so! Following a string of Commissioners, including the questionable Oupa Magashula, and, most recently, the deeply tainted Tom Moyane, we need the restoration of this once globally respected institution, systematically dismantled by corrupt officials.

Take centre stage Edward Kieswetter, new SARS Commissioner.

From the time of his appointment, Kieswetter has been at pains to comply with good governance: he resigned as Shoprite’s Lead Independent Director, and fully disclosed outside interests and involvement in organisations, including directorships on SOEs such as Transnet and Technology Innovation Agency.

President Ramaphosa has said that he has “every confidence” that this new Commissioner has the “experience, integrity and skills” to restore this once fêted institution to its former honour. Between 1997 and 2009, under Pravin Gordhan’s leadership, SARS established itself as one of the foremost revenue services in the world, embracing technology and viewing the taxpayer as valuable customer. It was applauded as efficient, transparent and modern.

Fit for task

In May, Fin24 listed the most urgent matters facing Kieswetter, and these serve to highlight the new Commissioner’s suitability for his new role.

Firstly, SARS needs to increase its revenue collection. For the financial year ended 31 March 2019, SARS had collected R14.6bn less than estimated in the revised Budget – this larger deficit was attributed to an increase in refunds paid out. In contrast to Moyane with no tax experience or financial background, Kieswetter was SARS Deputy Commissioner between 2004 and 2009, during Gordhan’s tenure as Commissioner; it is said that Kieswetter’s unit was responsible for 30% of the SARS revenue generated then. This contributed to the Government surplus that allowed South Africa to weather the 2008 financial crisis better than many countries. Kieswetter has a Master’s degree in Education, an Executive MBA and an MCom degree in Tax.

SARS must cut down on illicit trade in its mandate to increase revenue collection, and has now tendered for a track and trace marker. South Africa has reportedly lost over R6bn in a single year in illicit alcohol trade and loses around R8bn annually to illicit tobacco trade.
In addition, SARS will be following up on errant taxpayers. Kieswetter has already articulated his policy of prosecuting ‘without fear or favour’.
Secondly, cleaning up after state capture will not only require an unwavering commitment to personal integrity, but also mean reviewing procurement processes, re-establishing the Large Business Centre and other units dismantled by Moyane, and evaluating all SARS posts. Moyane suspended or replaced the whole of the SARS top structure in four months, and in less than a year, many of the most experienced and respected executives had left. IT development halted and millions were paid to such companies as Bain & Co.

So, developing future leaders will be part of Kieswetter’s mission, to recreate a thriving and confident organisation. Kieswetter is known for his transformative leadership approach, with a philosophy of a leader as steward, as an opportunity to serve, not to be served.

Next, with Moyane having stopped the drive to modernise systems, Kieswetter must increase innovation. Embattled IT head, Mmamathe Makhekhe-Mokhuane, has been on suspended leave, following her infamous television interview in October last year.

All these tasks are aimed at restoring the institution’s credibility, both locally and abroad. Finance Minister, Tito Mboweni, is looking forward to “seeing SARS re-established as a respected tax collector and improved revenue collection outcomes.” For the sake of the country’s growth and the goodwill of the taxpayer, so do we.

cast-your-vote

Building our economic future … together

I write this article in the wake of the national and provincial elections in South Africa, the results enabling the ANC to retain its ruling party status, though significantly weakened. The next five years will reveal if the President and the ANC is worthy of this ‘second chance’.

In the slew of political and economic commentary that followed, I saw a tentatively positive response to the relatively orderly and incident-free voting process, with the Rand appreciating 20c (also attributable to global factors), RSA ten year bond yields improving nine points and the big banking shares rising between 3% and 4%.

As a Financial Planner focused on helping clients in their wealth creation phase, it is a matter of concern for me that almost 10 million eligible voters did not even register to vote. Given our country’s history, and the cost at which the universal right to vote has come, this apparent apathy is worrying. Of course, it may be argued that a reluctance (or refusal) to vote shows no confidence in any of the 48 parties. The pessimism can be understood: the ANC’s recent kleptocracy and pillaging, and the lack of credibility of the other parties.

That said, I am a firm subscriber to the view that our younger generations can shape the future of this country; and participation is personally empowering – be it in our country’s political elections or in shaping our personal financial futures. I believe that this is the time for younger generations to be active in building our nation.

How to be an active citizen

All eyes are on the President who, no doubt, helped the ANC stay in power. A good start has been Cyril Ramaphosa’s revival of the advisory unit to drive policy. The challenges, though, remain what they have always been: economic growth not entirely based on direct foreign investment, but on creating, in the words of Ronnie Kasrils in a Daily Maverick article: “ … industrial policy with teeth to reinvigorate production, giving rise to economic modernisation with jobs, and redistribution instead of austerity.”

Obviously, government must implement measures to regulate SOEs such as Eskom, SAA, Telkom, and Transnet. Government spending on employees needs to be revisited.

Large corporations are cutting back on staff, an indication of the slowing of the economy. While government is setting up policies to create jobs, we as citizens can lend support to the quest to bring economic stability by supporting local entrepreneurs and small businesses; mentoring and encouraging those seeking to create a local brand of excellence; as an employer, to transfer skills to employees and help domestic staff where possible.

South Africans have a dismal record of saving, and improving our savings culture contributes to a healthier national economy.

The role of Financial Planning

In times of economic uncertainty or constraint, planning our finances becomes paramount. Being strategic about spending, saving and investing means that our money works for us and is the means to supporting the life we want for ourselves and our families, as well as helping those who work for us and philanthropic initiatives.

One way to be strategic is to ensure that our money is wisely invested. In the past five years, I am pleased to see clients asking more questions about their portfolio and its composition.

Some clients have enquired about investing money offshore (outside South Africa). I always emphasise the need to diversify with my clients, and part of that is investing offshore, though political uncertainty is but one factor to consider. A diversified approach includes choice of asset classes and asset managers, economies, politics, currencies, and a much wider scope of investment choice. A significant consideration for me is not to have all assets exposed in one country.

Economic prosperity in South Africa will require more than the efforts of government – let’s respond to the President’s call: Thuma Thina: Send us.

Craig Turton is a Certified Financial Planner® and Head of the Wealth Creation team at Chartered Wealth Solutions.

resetting-south-africa

Resetting South Africa

John-Cambell

Some commentators said that the inauguration of the President of South Africa was reminiscent of 1994: a resurgence of hope and an optimism about the future of the country. Certainly, as I watched Cyril Ramaphosa’s swearing in, I felt more positive about the country’s prospects than I had in some time.

While an ANC win was inevitable, the ruling party’s reputation was severely tarnished by the revelations of the depth of state capture and the number of government officials involved in various degrees and manifestations of corruption. I am assured that, had Jacob Zuma still been the President, the ANC vote would have been closer to 50% and they would have lost Gauteng. Voter turnout dropped (65.99% of registered voters, contrasted with 73.5% in 2014), no doubt attributable to disillusionment with any of the political parties’ ability to effect change.

Strong leadership for investor confidence

As I write this, we are awaiting the announcement of the Cabinet by the President. That he will be able to compose this body completely free of any questionable members is unlikely, but he has assured us that it will be a leaner one. During his nine-year tenure, Zuma’s Cabinet swelled to 35, with ministers earning over R2 million a year and their deputies R1.9 million. Tax-payers want to have the confidence that their contributions for the betterment of the country are used for just that – and not for lining the pockets of fat-cats.

In addition, we expect the President to get the economy back on track, with positive gains for the Rand. A stable government with clearly-defined policies will engender investor confidence and encourage more inflows of foreign direct investment and local investment into the country. President Ramaphosa needs to provide clarity on such issues as land appropriation without compensation, and the nationalisation of the Reserve Bank. People only invest when they know that their money will be safe.
Ramaphosa’s ability to get the economy on track and to rid the ANC of individuals tainted by corruption and links to state capture is crucial to a more secure outlook. A stronger economy will generate an environment more conducive to a collaboration between government and the private sector – creating jobs is a priority not to be ignored, both for a thriving economy and to manage an increasingly hopeless unemployed, unskilled South African youth.
Our investment consultants will be watching for political and economic developments, ready to make changes always in the best interests of our clients. While I believe that Cyril Ramaphosa is the man best placed to lead this country to a more prosperous future, that future remains an uncertain one, and we are investing in the wake of a difficult time for both the country and our flagging market.

With so much focus on local happenings, it is worth noting that global factors (such as a weakened UK market and tensions between China and the US) impact equity markets significantly than a local event such as the outcome of our elections.

Matching your vision to your values

I find President Ramaphosa’s vision of “friendship, solidarity and co-operation” a hopeful one. So much can be achieved by a shared goal and solid values. When Barclay and I merged our companies 20 years ago to establish Chartered Wealth Solutions, we had a vision: to create a company committed to serving its clients with excellence.
We little knew that the Chartered team of four at the time would grow to a company of more than 80 staff and would extend our service to include Chartered Tax and Chartered Legacy & Trust. Our recently established Chartered Invest enables us to ensure that our vision of excellent service is consistent through every client interaction. When we receive positive feedback from our clients, we recognise that it is because our values pervade the company.
President Ramaphosa’s vision of “a society in which our worth is determined by how we value others” resonates with me, and I join his call of “Thuma Thina” – Send Us.

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