Are your financial affairs in order?

It always amazes me when I look back on articles that I have written as far back as 1996 that some things just never change. The need to have control over our financial affairs from both a personal and business perspective is imperative if we are to weather the storms of market conditions.

The global recession affected everyone in one way or the other and the need to constantly reassess our affairs has become something we have been forced to do instead of something we should always be doing.

When I started advising clients, I took it for granted that clients knew the basics as well as I did, but soon realized that what is basic common knowledge to an advisor is not always known by the client.

The need for a competent financial advisor is more important now than it has ever been as I strongly believe that being able to discuss your affairs in an open honest manner, and have someone that you can trust with this information, is like having a best friend that you can talk to and know that the advice they give you is from the heart not the pocket.

As Businesswomen we are not only focused on our career and business, but on our families as well and this entails being on top of everything! A review of your affairs is important to ensure that you are on top of everything. Legislation changes so much and so quickly that we sometimes lose track of the important issues that come up and only realize when it is too late that we have dropped a catch.

Very often women in marriages or permanent relationships find out that the state of their partner’s affairs is not what they should be, and this has a major impact on their relationship. There is nothing worse than worrying about money. Do not wait until your partners die before you realize that you are not protected. 

Always ensure that you are aware of how you are married, i.e., in community of property or out of community of property with or without accrual. In South Africa we do not recognise common law marriages and unless you have a partnership or habitation agreement in place you could be on the losing end.  For estate duty and tax purposes you will need to prove that you were in a permanent relationship.

We need to tighten the purse strings thanks to the recession and what a perfect time to sit down and review your joint affairs. You will be in a difficult position if your partner has not provided for you and your children in his will and dies before you. Women tend to live longer than men so you must be aware of what the implications of that will be. It is so easy to be caught short and too often I have seen the consequences of incorrect planning.

There is a story that I tell my colleagues about an estate that I was involved with AFTER the testator died.  He left his entire estate, which was quite substantial, to his daughters in equal shares. However, there was a family heirloom which had great sentimental value to the daughters and it was not specifically mentioned in the will. The problem was, how do you divide a clock between 3 daughters. The family fight that ensued resulted in the 3 sisters feuding for years.

I learnt that if you can have fight over a clock can you imagine what would happen if there were other assets that had not been dealt with correctly. There are so many stories I would like to share with you if only to make you aware that every little thing counts in your planning and if you are not sure of the implications of your decisions mistakes can be made.

Get to see your financial planner as soon as possible and have a detailed financial plan prepared which covers all aspects of estate planning. This will include all retirement plans, investment plans and documentation.

Content in this article was provided by Geraldine Bunting CFP, Cheyenne Financial Services (Pty) Limited.