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Preparing for the Worst

How to ensure peace of mind for your loved ones in the event of your death.

Hesta van der Westhuizen

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Preparing for your unexpected death may not be the most uplifting topic to talk about but it is very important in order to save your loved ones from any additional pain and suffering after your death. If you are one of the many people concerned that your partner or spouse will have to worry about money in addition to the stress and grief they will suffer if something happens to you, here are a few points to consider.

  • Ensure that your partner has access to money for the immediate expenses – preferably a bank account in his or her name.

    In practical terms, if you are married in community of property, or even if you are married out of community of property but only have a joint bank account, the bank manager is legally obliged to stop any access to your account the moment he is informed about your death. Most banks will handle the situation with compassion and, after having certified the amount in the account for estate purposes, will allow the surviving spouse to draw money for their immediate needs. But if they do not have an account it might mean that they will have to go through the process of opening an account in their own name.

    Having access to money does not mean that they have your pin and can continue to draw money from your account – this can be construed as theft from a deceased estate or defrauding the estate. The executor will have to take action as it might limit his ability to administer the estate.

  • The funeral costs will have to be paid even before the undertaker is prepared to move the body from the mortuary. Undertakers do not do funerals on ‘credit’. Make sure your surviving spouse has sufficient money available, or access to money (a loan from a child or family member, even sufficient credit in a credit card will do) to pay for the funeral. The funeral costs are usually reimbursed by the estate to who-ever paid for it, so it does not have to be a gift. Even a basic cremation – cheapest coffin, small service in the undertakers’ rooms – starts at about R12 000. And the minister and organist will have to be paid in cash. Other ways to ensure there is money for a funeral is to confirm if your family members can access your risk cover policies. Some employers offer a funeral benefit with their employee benefit schemes, while some of the insurance companies also allow family members to take an advance (sometimes as much as R50,000) on your risk cover policy – however, this might be subject to conditions. As a last option you might consider a funeral policy. If this route will be your way of preparing for the costs of a funeral, just make sure that the paper work has been done correctly and that the person you have nominated to claim the money can do so without any hassle.
  • Most people are worried about where the money will come from for the surviving spouse’s living expenses until the estate has been finalised. This is a real concern as it could take a number of months before the executor of the estate has been officially appointed by the Master of the High Court – and until the executor is appointed, he cannot legally give the surviving spouse the money for living expenses, even if the estate has sufficient capital for the purpose. The good news is that in most instances, if the estate has sufficient assets in it, it is not necessary for the estate to be finalised (which on average takes about 18 months) before the surviving spouse can access some of the capital. Most executors will arrange for the spouse to get some money for living expenses and things like rates & taxes.

    An option to ensure that your spouse has immediate access to capital is to nominate your spouse as the beneficiary on some of your insurance policies. This should pay to her/him directly and in a reasonable time – unless the death claim is delayed because the cause of death is due to violence such as murder, hijacking or an accident caused by a drunk driver. In such a case the underwriters will wait for a police report before they will pay the benefit – and this can take up to two years.

    If you assume that your spouse will get immediate money from your retirement fund, be aware that the trustees of any retirement fund – such as your pension fund at work or your retirement annuities – have 12 months in which to pay the benefit to your dependants. This is to ensure they make 100% sure that they pay to whoever has been financially dependent on you. This might not be a problem if you have an uncomplicated family structure, but with our modern families where you may have your children, your spouse’s children, and children from a previous marriage, this could be a serious problem.

    On the positive side, for retired people whose income comes mainly from their living annuity, most administrators of these funds will change the ownership of the structure as soon as they have the necessary documentation – your spouse therefore might miss one month’s income, but would soon after continue receiving a regular income. However, make sure he or she is nominated as a beneficiary on your living annuity investment.

  • The bond and other liabilities. One would think that your bank will be lenient because your spouse is to deal with your death and the estate is anyway responsible for settling all your debt. In practice, the bank doesn’t care – they want their money back. The best way to provide for this is to have a ‘bond’ policy which is payable to the bank in the event of your death. If the bond is less than the benefit on the policy, the bank will pay the rest to your estate.
  • As financial planner, I have heard some gory stories about the family and the deceased’s will – such as the search for the last will and testament that starts even before the deceased’s body has been removed to the mortuary. The lesson is to keep updated records and ensure that your spouse knows where to find the documentation – and maybe one other trustworthy person in case you die at the same time.

The most important gift that you can give your spouse is not to leave him or her in the dark about your affairs. Keep them up to date on the details of your estate plan, so that he or she can know what the situation is in the event of your death.

Of course, the first step is to have a financial planner draft a detailed estate plan to see if there is enough money and assets in your estate to cater for all your debts and sufficiently provide for your loved ones. A good estate plan will also advise on the most appropriate options to deal with all of the above issues.

Hesta van der Westhuizen CFP is a Certified Financial Planner at Consolidated Financial Planning and has a BCom-degree and Advanced Post Graduate diploma in Financial Planning Law. She is also Chairperson of the Financial Planning Institute’s Risk committee. For more information please visit: www.consolidated.co.za

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Personal Finance

The 3 Decisions That Will Change Your Financial Life

There’s nothing worse than a rich person who’s chronically angry or unhappy. There’s really no excuse for it, yet I see it every day. It results from an extremely unbalanced life, one with too much expectation and not enough appreciation for what’s there.

Tony Robbins

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Without gratitude and appreciation for what you already have, you’ll never know true fulfilment. But how do you cultivate balance in life? What’s the point of achievement if your life has no balance?

For nearly four decades, I’ve had the privilege of coaching people from every walk of life, including some of the most powerful men and women on the planet. I’ve worked with presidents of the United States as well as owners of small businesses.

Across the board, I’ve found that virtually every moment people make three key decisions that dictate the quality of their lives. If you make these decisions unconsciously, you’ll end up like the majority of people who tend to be out of shape physically, exhausted emotionally and often financially stressed. But if you make these decisions consciously, you can literally change the course of your life today.

Decision 1: Carefully choose what to focus on

At every moment, millions of things compete for your attention. You can focus on things that are happening right here and now or on what you want to create in the future. Or you can focus on the past.

Where focus goes, energy flows. What you focus on and your pattern for doing so shapes your entire life.

Related: 10 YouTube Channels Every Entrepreneur Should Follow

Which area do you tend to focus on more: What you have or what’s missing from your life?

I’m sure you think about both sides of this coin. But if you examine your habitual thoughts, what do you tend to spend most of your time dwelling on?

Rather than focusing on what you don’t have and begrudging those who are better off than you financially, perhaps you should acknowledge that you have much to be grateful for and some of it has nothing to do with money. You can be grateful for your health, family, friends, opportunities and mind.

Developing a habit of appreciating what you have can create a new level of emotional wellbeing and wealth. But the real question is, do you take time to feel deeply grateful for your mind, body, heart and soul? That’s where the joy, happiness and fulfilment can be found.

Consider a second pattern of focus that affects the quality of your life: Do you tend to focus more on what you can control or what you can’t?

If you focus on what you can’t control, you’ll have more stress in life. You can influence many aspects of your life but you usually can’t control them.

When you adopt this pattern of focus, your brain has to make another decision: 

Decision 2: Figure out, What does this all mean?

Ultimately, how you feel about your life has nothing to do with the events in it or with your financial condition or what has (or hasn’t) happened to you. The quality of your life is controlled by the meaning you give these things.

Most of the time you may be unaware of the effect of your unconscious mind in assigning meaning to life’s events.

When something happens that disrupts your life (a car accident, a health issue, a job loss), do you tend to think that this is the end or the beginning?

If someone confronts you, is that person insulting you, coaching you or truly caring for you?

Does a devastating problem mean that God is punishing you or challenging you? Or is it possible that this problem is a gift from God?

Your life takes on whatever meaning you give it. With each meaning comes a unique feeling or emotion and the quality of your life involves where you live emotionally.

I always ask during my seminars, “How many of you know someone who is on antidepressants and still depressed?” Typically 85% to 90% of those assembled raise their hands.

How is this possible? The drugs should make people feel better. It’s true that antidepressants do come with labels warning that suicidal thoughts are a possible side-effect.

But no matter how much a person drugs himself, if he constantly focuses on what he can’t control in life and what’s missing, he won’t find it hard to despair. If he adds to that a meaning like ‘life is not worth living,’ that’s an emotional cocktail that no antidepressant can consistently overcome.

Yet if that same person can arrive at a new meaning, a reason to live or a belief that all this was meant to be, then he will be stronger than anything that ever happened to him.

When people shift their habitual focus and meanings, there’s no limit to what life can become. A change of focus and a shift in meaning can literally alter someone’s biochemistry in minutes.

So take control and always remember: Meaning equals emotion and emotion equals life. Choose consciously and wisely. Find an empowering meaning in any event, and wealth in its deepest sense will be yours today.

Once you create a meaning in your mind, it creates an emotion, and that emotion leads to a state for making your third decision:

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

Decision 3: What will you do?

The actions you take are powerfully shaped by the emotional state you’re in. If you’re angry, you’re going to behave quite differently than if you’re feeling playful or outrageous.

If you want to shape your actions, the fastest way is to change what you focus on and shift the meaning to be something more empowering.

Two people who are angry will behave differently. Some pull back. Others push through.

Some individuals express anger quietly. Others do so loudly or violently. Yet others suppress it only to look for a passive-aggressive opportunity to regain the upper hand or even exact revenge.

Where do these patterns come from? People tend to model their behaviour on those they respect, enjoy and love.

The people who frustrated or angered you? You often reject their approaches.

Yet far too often you may find yourself falling back into patterns you witnessed over and over again in your youth and were displeased by. It’s very useful for you to become aware of your patterns when you are frustrated, angry or sad, or feel lonely. You can’t change your patterns if you’re not aware of them.

Now that you’re aware of the power of these three decisions, start looking for role models who are experiencing what you want out of life. I promise you that those who have passionate relationships have a totally different focus and arrive at totally different meanings for the challenges in relationships than people who are constantly bickering or fighting.

It’s not rocket science. If you become aware of the differences in how people approach these three decisions, you’ll have a pathway to help you create a permanent positive change in any area of life.

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Personal Finance

7 Steps To Achieve Financial Freedom

Achieving financial freedom doesn’t necessarily mean becoming filthy rich – not that that hurts.

Brian Tracy

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In this video, Entrepreneur Network partner Brian Tracy explains the seven steps you need to take to achieve financial freedom. Now, financial freedom doesn’t mean becoming filthy rich – lottery winners go bankrupt all the time. Instead, financial freedom is about becoming disciplined and using your money in a way that ensures you can live the sort of life you want both now and in the future.

Related: 5 Qualities Of Successful Entrepreneurs

That’s why the first step isn’t about getting a lot of money. Instead, it’s about teaching yourself to think positively about money. That way, you’ll be in the right mindset to move forward.

Click play to learn more.

This article was originally posted here on Entrepreneur.com.

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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.

1First 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.

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.

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

2You 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.

3Focus 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.

4Prove 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.

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.

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

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.

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