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THE FINANCIAL WELLNESS COACH

Getting your affairs in order — here are the key things to consider

Getting your affairs in order — here are the key things to consider
Property investment.(Photo:iStock)

We all need to give some thought to how to make it easier for our loved ones to deal with the financial consequences of our passing away.

Question

My wife and I are in our mid-eighties. I am not in very good health and I would like to leave my affairs in the best possible order in case I die before my wife. Our house is in my name only and I am thinking of making my wife the co-owner now. Is this a wise move?

Answer

What you are doing is so important. We all need to give some thought to how to make it easier for our loved ones to deal with the financial consequences of our passing away. Since this can come at any age, it is important that we all give some thought to this.

I will deal with your specific question regarding transferring the house ownership and then talk about a few other issues that need to be considered.

There is no value-add if you transfer half of the house to your wife now. Should you pass away, the other half-share of the house would need to be transferred to her. Whether the full share or half-share gets transferred upon death, it will entail the same amount of work and stress.

When you pass away there are certain taxes that are waived when property is transferred out of a deceased estate, so there is also a financial reason not to transfer now.

There are a few other areas that I would recommend that you look at:

Living annuity beneficiaries

If you have a living annuity, check that your spouse is the beneficiary. This will ensure that there is no break in the income stream that your household receives should you pass away.

Beneficiaries on policies

Get your financial adviser to provide a detailed list of all your insurance policies and their beneficiaries. Check that each policy has the correct beneficiary attached to it. I have come across situations where an ex-spouse or girlfriend ends up receiving the proceeds of a policy even though the deceased had remarried.

Any divorce orders

A divorce order is often needed when an estate is being wound up. I have seen long delays in the finalisation of estates because a divorce order could not be readily found. So scratch around and locate any old divorce orders if applicable. Keep these in a file and let your loved ones know where they are.

Birth and marriage certificates

These are not documents that we use in everyday life, but when sorting out an estate they will be needed. Find out where they are and keep them in a folder.

Will

Have a look at your will and ensure that it accurately reflects your wishes. Ensure that there is an original signed version of the will that is readily accessible to your loved ones. If no will is found after you die, you will be deemed to have died intestate and your assets will be distributed according to a formula which may not be what you would like.

If you are cohabiting with someone permanently, make sure this is mentioned in your will, since there are a number of tax benefits that your partner can enjoy.

Tax

Check that your tax information is available and that you are in good standing with the tax authorities. If there is an ongoing dispute, please ensure that this is well documented so that the executor can continue negotiating with the South African Revenue Service in order to get the correct outcome for your estate. I have seen estates taking years to be wound up because of a poorly documented tax dispute.

Passwords

You need to let your loved ones know what your passwords are. These would include the password to your computer, those for any websites you run and for your social media profiles and online financial access.

Read more in Daily Maverick: Get more bang for your buck from your retirement investments

I’m not sure what the best way of doing this would be. You don’t want to compromise your passwords while you are living, but I’m sure you can figure out some way of doing this. You didn’t read all those Enid Blyton books for nothing – they had lots of ideas on how to pass across coded messages!

Life file

It makes sense to gather the key information together into a file that can be used to speed up the finalisation of your estate. I have drawn up a template that lists all the major documents that may be needed in the event of death. Should you want a copy, drop me a line and I will gladly email it to you. DM

Kenny Meiring is an independent financial adviser. Contact him on 082 856 0348 or at financialwellnesscoach.co.za. Send your questions to [email protected].

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.

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