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Believing in yourself is the secret to success.
Inspirational quotes from Robert Kiyosaki:
“A plan is a bridge to your dreams. Your job is to make the plan or bridge real, so that your dreams will become real. If all you do is stand on the side of the bank and dream of the other side, your dreams will forever be just dreams.”
“The size of your success is measures by the strength of your desire, the size of your dream and how you handle disappointment along the way.”
“Your choices decide your fate. Take the time to make the right ones. If you make a mistake, that’s fine; learn from it and don’t make it again.”
Robert Toru Kiyosaki is a well-known and respected American businessman and author who recently spoke at an event of The Wealth Masters Tour held in Sandton on 7-8 September 2019 regarding wealth building strategies. All these quotes boil down to the same thing: The responsibility to capture one’s thoughts, channel them in a positive direction and work at making a dream a reality, lies within oneself. No one else is in the way, but oneself. So, if you are the problem, step aside and get out of your own way.
The next in our series on charities, is SARAC.
Soweto Animal Rescue and Advisory Centre - SARAC
A man’s best friend, often in need of special care.
SARAC was founded by Jerry Selwane and launched from his home in Zuurbekom, Johannesburg in 2012. He is a former SPCA inspector of 17 years and care deeply about the plight of mistreated animals.
SARAC not only rehabilitates and re-home animals, but also find a great match between them and their new families. They also strive to educate and change people’s attitude towards animals. Their mission is to improve the living conditions of all animals in South Africa.
Read more about SARAC at https://www.sarac.co.za/
PITFALLS WHEN DRAFING A WILL - PART 2
Read more about this in the next edition.
MOST COMMON MISTAKES WHEN DRAFTING A WILL
As listed in the August 2019-newsletter, eleven points need to be discussed. All points are worth considering and therefore the first six will be covered in this edition and the rest in the newsletter of October 2019.
For an unwary person, the drafting of a Will can be quite a daunting task and there are many pitfalls to avoid.
One of the biggest problems arising from a DIY or a template-type Will, is the failure to comply with the formalities of the Wills Act, which could render it invalid. An application could be lodged at a court to order the Master of the High Court to accept the document, but this is a costly affair and delays the finalisation of the estate.
It could also happen that certain beneficiaries in a Will get disqualified from receiving any benefit or holding an appointed position in the following cases:
Even though the disqualified beneficiary has recourse to court, it is costly. Such beneficiary could still inherit, but not more than they would have inherited in terms of the Law of Intestate Succession which could drastically reduce the benefit.
It is important to keep a Will up to date, but dangerous to have several subsequent Wills in the custody of different people and organisations as a Will doesn’t necessarily revoke an earlier Will. If previous Wills are not explicitly revoked in the last Will, it could result in Wills being read together in the event of death.
The executor takes control of affairs after death. Their role is to protect assets, settle debts, identify heirs and distribute assets in line with the provisions of the Will. This process is overseen by the Master of the High Court.
Not nominating an executor in a Will does not render it invalid but will delay the winding-up process. Beneficiaries will have to agree on the nomination and submit it in writing to the Master, who has the final say on acceptance. If the nominee does not have enough experience and knowledge of the Administration of Estates Act to perform an executor’s duties, they will require the services and name of a professional who will then act as agent in winding up the affairs. If the beneficiaries cannot agree on a nomination, the Master has the discretion to appoint an objective third party who can carry out the duties of executor.
Once the executor is appointed, a bond of security will have to be posted which is a type of insurance policy to protect the assets in the estate.
Security is required in all instances, except:
It is almost impossible for a layperson to get a bond of security. A track record is a requisition and it costs between 1 and 1,5% of the gross value of the estate per year. Rather nominate Legatus Trust, a professional and experienced trust company, as executor and dispense with security. The Master still carries the ultimate discretion though. In that way there is always protection.
Being able to bequeath property is one of the pleasures of drafting a Will. Yet this can be complicated too. If there is, for instance, still an outstanding mortgage on a bond, this will be paid out of the estate, which reduces the residue. If this was the intention, then this is not a point to consider. In the example below, it would present a problem though.
Example: “I bequeath my house to my wife.” There is an Absa mortgage on the property and the Will does not state whether the house is to be inherited with or without the mortgage. The testator’s intention may have been different to what would have transpired. He may have wanted his wife to assume the mortgage, because she is a wealthy businesswoman, leaving a healthy residue to the family’s long-time domestic worker. As it would have turned out, the residue would have been depleted by the outstanding bond on the property and the man’s employee would have been much worse off than if he had been properly advised when drafting his Will.
If this is an important issue, the Will should be explicit about who takes over debt of any asset which is burdened, otherwise the norm is to settle outstanding debt out of the residue of the estate.
A DIY Will does not always include all the necessary provisions, such as the fact that if minor children inherit cash or movable property, i.e. firearms, vehicles, etc., provision needs to be made for the administration of these assets. Assets can only be administered for them by means of a trust. In the absence of a trust, all assets will be converted to cash and be held by the government’s Guardian’s Fund until they become of age. The guardian will then have to face the frustrations of obtaining release of funds for the maintenance and benefit of the children.
If a testamentary trust is provided for, it should give the trustees ample power to deal with all the assets in the trust. If the trustees’ power is limited, the only way to resolve the limitations will be to approach the courts, which adds a financial burden.
Example: A divorced man with two minor children, wrote out his Will, bequeathing his estate to his children and committed suicide. No provision was made for a trust to be established for the children. The money was paid over to the Guardian’s Fund and the minors’ guardians had to apply for funds for the maintenance of the children.
Provision must be made for heirs with special needs. Setting up a trust will provide for mentally disabled and incapacitated persons to allow for safe custody of assets, while at the same time benefiting from lenient tax treatment.
We will discuss the other five points in the next edition to complete this article.
FROM ZERO TO BILLIONS
Even though Zsolt and Geza Peladi were the grandchildren of an extremely wealthy German woman, they were homeless. The two Hungarian brothers had been living in a cave outside Budapest when their grandmother passed away in December 2009. According to German law, her direct descendants were to inherit her estate.Until next time.
The bulk of her estate, valued at roughly $5,52 billion, went to her estranged Hungarian grandchildren and a sister living in the United States. With such an exuberant amount of money, the trio must have been elated, no matter how the money was divided.
“The Legatus Times” Team
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