estate-planning-done-properly

Estate planning, done properly

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Recently, I attended the funeral of my client, Noeleen, who passed away unexpectedly.

I knew that we had recently updated her Will, and that the original document was securely stored in our Chartered safe – what a sense of relief for me after the initial shock at hearing the sad news! I also recalled that her husband, Gerald, had money in his own name, and immediate access to it.

I am aware that, at a time of loss and change like this, clients may depend quite heavily on us, their Financial Planners, to support them through this traumatic time.

With Chartered’s philosophy of retiring successfully, we, of course, plan for all the wonderful things that our clients’ money can do for them. In our Retiremeant™ Planning, we tend to focus on helping our clients live their most fulfilled lives – we plan for when things go well.

Noeleen’s passing reminded me that we also need to plan for when things don’t go well.

Frequently, an expected event is the sudden passing of a spouse. Because this can be an emotional time, it’s best to have an early discussion with client couples about what would happen if one of the spouses were to die: what assets would be sold, would they continue to live in their current home, and what changes need to be made in their Estate Planning.

The Estate Planning process, which on the surface can appear to be quite simple, is sometimes not as simple, as it turns out. When I sit with my clients and work out in Rands and Cents what their Wills mean, oftentimes amendments are essential.

In one instance, a client had inherited money from her parents, and she wanted this money to pass on to her children on her death, and not her husband. She only held two assets in her name – the investment housing this inheritance, and their family home. When I pointed out that if she left the entire inheritance to her children, her husband would have to come up with the money to pay the costs in her estate, and possibly risk losing his home. We changed her Will to rather leave the family home to Alan, and the investment, after paying all the estate costs, to the children.

Recently, I have been working with another client with a large estate who has minor children. He only came to me asking for investment advice, and did not think there was any necessity to consider Wills or Trust Deeds. Once I started delving more into these details it so happened that there were major concerns regarding his estate planning. No Guardian or Custodian had been appointed in his Will, there were errors on the Trust Deed, and those errors could have caused major problems had he died unexpectedly.

Asking clients to consider what things would look like after their demise is not an easy conversation to have. People do not like to think of their own mortality. Proper planning and honest conversations, though, help avoid unnecessary trauma when things do not go well.

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