Newsletter 79 (Jun 2023)
The leafless trees, cold winds, and chilly mornings tell us that we are well into our South African winter season. With July around the corner, school children are looking forward to a long holiday break that will continue deep into the month of July. Some families will have the pleasure of spending time in South Africa’s warmer provinces, enjoying a relaxing mid-year break. If you are one of these fortunate ones, be safe and enjoy the break from your usual routine. If you are staying home, enjoy the cold weather and stay warm!
Fun fact: Wednesday, 21 June 2023, was the shortest day of the year. The season is turning already!
YOUR INVOLVEMENT WITH THE INTAKE OF AN ESTATE
We are saying goodbye to Tobias Bester who has decided to lay down the reins as EFBOE Manager and Executor after many years of loyal service to the company. Tobias has contributed greatly to the success of EFBOE and was an enormous asset to the company because of his vast knowledge, insight, and experience. His incredible ability to view a case from different angles to find a suitable solution has always been enviable. Strong bonds were forged with colleagues and advisors alike, and Tobias will be sorely missed by us all.
We wish you well and all the best in your future endeavours, Tobias!
It is a heart-wrenching experience for a bereaved loved one to not only lose someone they loved but to then also report the estate to the executor. Loved ones need empathy and want to feel that they are more than just another number. In most cases, you, as their advisor, are their go-to person. The support you provide to your client’s next of kin during this time can prove to be invaluable.
We urge you to stay involved and assist with the intake of an estate, not only to build and strengthen a trust relationship with your client’s loved ones, but also to reap the benefits of future business that can result from your support and assistance during this difficult time in their lives.
It is worth mentioning the Life File again. Keeping an up-to-date list of assets and liabilities in a Life File will be extremely valuable at this stage, as many heirs have no knowledge of the financial circumstances of the deceased.
NEW LEGISLATION: DO NOT HASTILY DEREGISTER EXISTING TRUSTS*
Everybody is ‘up in arms’ about the new anti-money laundering and combatting of terrorist financing measures that have been introduced and which affect trusts. It is interesting to see how many so-called financial advisors perceive an opportunity to make a ‘quick buck’ by advising their clients to undo their trust structures, or out of complete ignorance themselves. The accounting and fiduciary industry has a responsibility to give (or obtain) the best advice for their clients and not, in a knee-jerk reaction to the new measures, blindly deregister trusts. Although, in some instances, estate planners were ill-advised to register trusts in the ‘old days’, trusts were generally registered as part of estate plans. It takes a lot of effort to properly structure a trust and to effectively move assets into a trust as part of an estate plan. It will thus certainly trigger a number of costs and taxes (let alone the undoing of an estate plan) to give ill-considered advice.
Estate planners should never lose sight of the purpose for which a trust was set up. The benefit of having a trust as part of your estate plan will, in most instances, outweigh the extra layer of compliance costs as a result of the new measures. The following may serve as reminders of the reasons why estate planners may have been advised to register a trust. Do not undo your estate plan if it still makes sense to have a trust. That being said, do deregister a trust if it never served a purpose, as all trusts, whether dormant or not, fall under the same onerous measures, for which trustees may be fined and/or imprisoned.
Separate your personal assets from your business or property holding.
Flexibility to cater for varying circumstances and events.
Family asset management.
‘Insurance’ should something go wrong with your mental or physical health.
Preserve your wealth for future generations.
Protect other people.
Life continues for your family after death – no estate freezing.
Protect your family from liquidity issues resulting from your death.
The above article re-evaluates the reasons why trusts are established in the first place, therefore, we encourage you to read the full article. The legislative changes should not be a reason to hastily make decisions regarding existing trusts.
A SERIES ON LEADERS WHO LEFT THE BIGGEST LEGACIES – PART 3
We continue our series with another example of a selfless legacy that benefitted mankind.
Martin Luther King Jr (1929-1968)
Martin Luther King Jr was a Baptist minister, a non-violent activist, and a leader in the United States of America’s civil rights movement. He advocated for peaceful approaches to some of society’s biggest problems and led quite a few boycotts, protests, and marches in his struggle for equality. He had strategies and goals in mind, similar to those of Nelson Mandela, to achieve equality for all people, irrespective of their skin colour. Martin Luther King Jr delivered his iconic “I have a dream” speech to more than 250 000 supporters in 1963 in Washington.
Until next time!
The Let’s Talk EFBOE Team