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Effective Estate Planning: A Legacy That Lasts

Where there’s an estate plan, there are happy heirs.

Bryan Hirsch

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The Wikipedia definition of estate planning is deceptively simple – it is “the process of disposing of an estate”. Estate planning typically attempts to eliminate any uncertainties over the administration of probate and to maximise the value of the estate by reducing taxes and other expenses. This is something anyone who has built up an estate with assets wishes to do; after all this is the legacy that is left to the immediate family.

The idea is to protect it to the best of our ability while we are still alive and able.

Reasons to plan

Estate planning can be divided into five elements:

  • Protect the value of growth assets in the estate
  • Protect assets from forced sale by assessing the availability of liquidity in the estate
  • Reduce exposure to taxes such a capital gains tax (CGT) and estate duty
  • Limit estate expenses
  • Ensure the smooth transition of  the client’s estate on death

Many believe that estate planning is more about avoiding estate duty than anything else. However, it is so much more than that; it is an holistic process, encompassing all the relevant values of a person’s assets and liabilities at a given time. From this information, an individually customised and suitable plan needs to be developed.

An estate plan should also be flexible enough to ensure that future adjustments, resulting from such things as changing laws, financial situations and family needs, can be made.

What to look out for

An estate plan should take into account these aspects:

  • Your will; and, for the record, there is no such things as an old will
  • Any trusts (if applicable) and any relevant loan accounts
  • Life policies showing nominated beneficiaries
  • Liquidity required to fund CGT, executors fees and estate duty
  • All assets and liabilities and, most important, shares in private firms
  • Any sureties that have been signed

Efficient use of all available estate planning tools will ensure estate duty is kept to a minimum. Individual cases will determine whether a particular method is suitable or not. Most people who think that estate planning is just worrying about assets or minimising outgoings, should realise that it is more about achieving the goals set during one’s life and beyond.

Many are unaware of the available estate planning opportunities. Having a Will is just one part of estate planning. One must always ensure there is sufficient liquidity in the estate to meet any liabilities without compromising your dependents.

A trust is certainly not always the answer to everyone’s circumstances but before forming a trust or, perhaps, terminating one, I would suggest you talk this over with a professional.

A costly oversight

A colleague of mine often says that people spend a lifetime building up their estate, but how much time do they spend on preserving it? I read recently in the Glacier-Sanlam financial proposal that it is estimated that a person spends about 76 800 hours building their estate. If you do not spend at least two hours planning it, it could cost up to 30% of your estate in unnecessary expenses and taxes and your heirs and dependents may not receive what is due to them.

Estate planning is often overlooked when more emphasis is placed on investment strategy and the creation of wealth. However, estate planning actually forms one of the supporting pillars of a sound financial plan. Rich or poor, everyone needs to plan their estates. It can be as simple as drawing up a will in which all your worldly possessions are left to your spouse, or as complex as establishing a local or offshore trust.

Inefficient planning reduced Elvis Presley’s estate by 73% and because the amount paid is on public record, there is no truth in the rumour that Elvis is alive and kicking in Memphis. The last place I would want my heirs to end up is in Heartbreak Hotel. 

BRYAN HIRSCH has been in the financial services industry for 47 years and is a director of Bryan Hirsch Colley & Associates. He has written two books, the first Bryan Hirsch’s Guide to Personal Finance and more recently, Steps to Financial Freedom. Bryan has written for many of South Africa’s top financial and business publications, has been a weekly guest on Radio SAFM for 18 years, and has his own weekly TV show You & Your Money on Summit TV.

Personal Finance

6 Ways To Develop A Millionaire Mindset

Chasing money has remarkably little to do with getting rich.

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If you truly want to have a million dollars, you must first be and think like a millionaire. By doing so, you will attract the necessary resources to you.

So, you want to become a millionaire entrepreneur? You’re not alone. Many dream of leaving their job and becoming their own boss, enjoying the various millionaire lifestyles we watch on TV. But there’s a difference between those who dream of becoming millionaires and those who do. And it begins and ends with mindset. If you don’t develop that mindset, you will continue to spin your wheels, working just as hard, but never going anywhere.

Developing a millionaire mindset requires you to stretch your thinking. Start by developing the following six attributes.

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Personal Finance

4 Ways To Become A Millionaire Even When You Start With Little

It costs nothing to take advantage of the limitless opportunities online.

Timothy Sykes

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The hardest part of becoming successful is getting started to begin with. But despite the challenges ahead of you, there’s a way to become a millionaire when starting with little. I’m going to show you four reasons why you can become a millionaire with just a small investment.

1. First focus on learning, not big gain

Education is your greatest weapon. Focus on learning in the beginning. Don’t make the mistake of focusing on making huge gains in the beginning. Learn everything you can because this is how you build the foundations for long-term gains.

Related: 21 Choices Millionaires Make That You Aren’t Making But Should Be

They say that if a millionaire goes bankrupt they’ll nearly always be able to get it back. And that’s because they might have lost their money, but they have the knowledge of how to get back to where they need to be.

2. You can learn loads about any topic online

online-learning

I’m grateful for the internet. It’s the single biggest library in the world. You’re reading this article right now and you’re acquiring knowledge you wouldn’t have been able to acquire 40 years ago.

Use the internet to its fullest extent, whether that’s through reading books, browsing articles or watching video tutorials. Set some time aside every day to learn something online. It could be a video series or a favorite blog.

When you get into the habit of learning regularly you’ll find that you advance much faster.

3. Focus on the niche you love

These days you can learn about anything and target the niche you’re passionate about.

This is what I was able to do with penny stocks. I found a gap in the market and provided knowledge to people who wouldn’t have otherwise being able to access this sort of information.

You can do that with absolutely any niche. When you find a niche you’re passionate about and you use the reach of the Internet you start to make huge gains.

4. Prove your expertise by creating free content

Your reputation as an authority is the new business card. There’s a reason I created a penny stock guide and made it free for all. You may have already seen ads for it on social media. The way to succeed with little is to create a reputation through your content.

Related: How To Become A Millionaire, Explained In 1 Minute

It’s the gateway to success because through free content you start to build relationships with others who value your work. And from there everyone gets richer.

You can do lots with a little

The days when you needed a huge investment to become successful are long gone. These days you can do so much with just a little. Find what you love, advance your knowledge in that area, and create a product that fulfills a need. Finally, work on building up relationships through portraying yourself as an authority on your subject.

Combine everything together and you can accomplish anything.

This article was originally posted here on Entrepreneur.com.


Related: 13 Habits Of Self-Made Millionaires You Could Adopt Today

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Personal Finance

10 Tips To Become A Millionaire This Year

Becoming a millionaire requires changing your mindset and implementing some changes.

Murray Newlands

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Becoming a millionaire may seem out of your reach, but it’s possible with the right attitude and guidance. The fact of the matter is your income can only grow as quickly as you do, so you need to change your mindset to achieve your goal of becoming a millionaire.

Once you have a millionaire mind, you can’t lose it, no matter what financial or business mistakes you make along the way. To get yourself there, you’re going to need some structure. To help you, I’ve outlined the top ten tips you should follow to become a millionaire this year.

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