Warren Buffett (86) and Charlie Munger (94) are two veteran investors, businessmen and philanthropists. In May 2017 at the Berkshire Hathaway Annual Meeting in Omaha, Nebraska, they had business wisdom to share which is well worth taking to heart.
Warren Buffett, being the second wealthiest business magnate in the USA, warned that companies who offer aggressive selling incentives, can cultivate a wrong culture using these techniques, because sales orientated people will do anything possible to achieve these selling goals. This can give lead to unacceptable business practices. Capitalism was also discussed as the best system to use capital and to increase productivity. A critical message to top management was that a company’s reputation is its biggest asset!
Something that everyone can apply, can be found in one of Charlie Munger’s Mungerisms: “A lot of people try to be clever. We try always to stay rational and that gives us a great advantage.”
(Information obtained from a business discussion with Theo Vorster on “MuntSlim”.)
The winding up of an estate can sometimes turn into a time-consuming endeavour, taking months or even years to conclude because of delays that can arise during any part of the process. In the next edition we will concentrate on some of these.
POSSIBLE DELAYS IN THE FINALISATION OF AN ESTATE
Read more in the upcoming edition!
THE APPOINTMENT OF FAMILY MEMBERS OR OTHER UNQUALIFIED PERSONS
For some people it seems like the easiest option to appoint a family member as an Executor. While it is common practice to do so, one should be aware of the possible implications. Family members may struggle with emotional involvement getting in the way, thus preventing them from effectively administering the estate. Since family members being appointed are often not qualified enough to handle the process on their own, they will in most cases be requested by the Master of the High Court to approach a trust company, a financial institution, attorney or chartered accountant to assist them with the administration of the estate and act as their agent. In cases like this it will be necessary to give the agent power of attorney before they will be able to proceed. This will delay the actual administration of the estate.
There are other problems that can arise when appointing a private Executor:
The nominated Executor may renounce his nomination as Executor resulting in the heirs having to nominate a further Executor, which could delay the process even further.
The nominated Executor may pass away before the client does.
The nominated Executor can be refused by the Master of the High Court should he/she be mentally incapable or former insolvents.
There is also the possibility that the beneficiaries may think that a family member as Executor can unduly benefit from the estate and lengthy family feuds can arise.
It is therefore advisable to have a back-up plan in case this should happen.
Efficient Board of Executors (Pty) Ltd is a well-respected authority on the drafting of Wills and rendering fiduciary services throughout South Africa and offer more consistency and security than a private Executor. If the appointed Executor passes away or resigns, another one can immediately be appointed by the firm without having to delay the process. It also provides peace of mind, knowing that qualified personnel are in charge.
An unqualified and inexperienced person thrown into the deep end of the pool – even when it might be a very trusted family member – is likely to result in confusion and potential disaster. Rather make use of EFBOE’s services as an experienced and qualified Executor who can give the best possible advice and guidance. EFBOE also does not get involved in family feuds and stands on neutral ground.
Harry Houdini is a rather famous name and most people have heard about this magician and escape artist. Born in 1874, he was considered the greatest of his era and possibly of all time. He died in 1926 from a ruptured appendix and left his magician's equipment to his brother Theodore, his former partner who performed under the name Hardeen.
He had a library of books on magic and the occult which was offered to the American Society for Psychical Research on the condition that J. Malcolm Bird, research officer and editor of the ASPR Journal, resign. Bird refused and the collection went instead to the Library of Congress.
The rabbits he pulled out of his hat went to the children of friends. Houdini left his wife a secret code – ten words chosen at random – that he would use to contact her from the afterlife. Although his wife held annual séances on Halloween for ten years after his death, Houdini never appeared.
Until next time!
The “Let’s Talk EFBOE” Team