Financial Planning

Women feature in every aspect of our society and business world and ordinarily single handedly also attend to the family and household needs, yet women appear to take a back seat when it comes to ensuring that the family fortunes are properly protected from creditors and that there will be a comprehensive plan in place to address theirs and their family’s well being after their demise or the demise of their spouse.

The reasons for this state of affairs are many and varied and I proffer no reasons as to why this is so, save to state that Women are not generally marketed to in this regard and further, irrespective as to how far we have come with regards to Women’s rights, that we still pretty much live in a patriarchal society, and that sorting out the family affairs are the domain of the male species. 

This is simply not acceptable as the family bears the brunt of inaction, poor planning or inadequate planning.

I know that most women are very financially astute and certainly most are capable of attending, or at the very least participating in, the necessary planning to ensure that in the event of a financial calamity, that the family assets are secured. Further that on the event of a spouse’s death or their own death that the family has the necessary resources to continue to live in the lifestyle they are accustomed to.

To the chagrin of many a male I am going to call out to our sisters to take up arms and demand that they get involved and take a pro-active role in the family’s financial affairs, and not leave it up to their partners or spouse to attend to. Get involved, ask questions and ensure that the Family assets and income are properly structured.

If women do not know the fate of their family in the event of a financial disaster or what will happen to them and the family if they or their spouse should pass away, then they should take action now and start asking the following questions of themselves and their spouses if they are married:
1.    How is our home and our assets owned?
2.    Is our home safe if either or both of us are retrenched or our business is closed down or liquidated?
3.    Will we have the means to live if either one of us pass away?
4.    Who will look after and support us and our children if either one or both of us pass away?
5.    Have I got a Will?
6.    On the death of one or both of us, how does the family access our assets or cash as our estates will be frozen during the winding up of the estate?

The above questions are quite cutting and will most certainly stir up debate amongst married couples and hopefully will get us all to think about the financial future and how to best plan for the way forward.

The solution to ensure that one’s assets are always secured, specifically the home that the family lives in, is to ensure that these assets are owned in a trust. A trust is the only vehicle that will ensure that an individual will achieve asset protection due to the fact that no person owns a trust; it is a unique entity in that respect. Thus if assets are held in trust and the requisite time periods in terms of the Insolvency Act have expired, coupled with the correct administration of the trust, the assets will be secure from any possible claim by any person. Coupled with a trust lies the need to draft a valid Will, which deal with assets not held by the Trust, the appointment of Guardians for minor children etc.
Another very important aspect to consider is the liquidity or cash that is going to be needed on the event of the death of a spouse or both spouses. This is where life insurance plays a role. In many instances only the male is insured, we have to ask why? It is perhaps necessary to re-visit this to ensure that the needs of the family are properly taken into account and possibly ensuring that both spouses, or partners, are insured.

Once the necessary amount of cover has been determined it is then crucial that the owner of the policy or policies on the respective spouse’s lives is owned by a trust. This is to ensure that estate duty efficiencies are achieved but more importantly that the proceeds of the policy flow to the trust in order that such proceeds are protected from creditors of the deceased and any possible creditor of any beneficiary. Furthermore to ensure that such proceeds will always be available to the family or the children if both spouses have passed on and even more critically that the proceeds are available if any of the children are minors.

In closing, we have really only touched on a few issues out of a considerable number of issues that need to be considered and action taken on in order to achieve optimal tax and estate planning. The important thing to remember is that to progress one must take action and that starts with taking the first step. GET INVOLVED.

Jose Delgado BProc LLB, DELGADO VELOSA KENWORTHY AND ASSOCIATES.