Wills Week! Family and Estate Planning

The question in South Africa has never been can I afford to have this child or do I have a plan in place. However I think that this is a vital question for each generation to ask, in the event that the question is irrelevant then what needs to rather be looked at is "since I am having this child how do I secure both myself and this child in the long run?"

First step in any planning process is taking stock of where you are now. The key questions are:

What assets do you have?

What liabilities do you have?

What monthly expenses do you have?

How much do they cost you?

What streams of income can you count on every month?

What costs do you have to account for with the arrival of the child?

If the costs are greater than your disposable income is, how can you remedy that?

What streams of income can you develop in the 9 months building up to the arrival of the little one?

If you have no way to do that, then the question is can you afford to cut anything from your budget?

These questions are just the beginning however once you have a definitive set of answers for these questions the planning can actually begin. However let's say that the child is already here or has been for sometime, how do you secure yourself? How do you secure them?

First thing is SAVE! I know that people always talk about saving as if it is an easy task and that it actually "takes a different kind of discipline to tell yourself you don't have money when you do!" I would like to suggest that we reframe the thinking. If you spend now you won't have money when you don't. I know to a degree this sounds like it is not the clearest sentiment but it simply means that in times of crisis no one ever really has money, most people have assets or access, so we finance our lives with debt to cover the short term shortfalls, however if you had saved like the crisis had already come, then you would not be paying interest on money that you need.

The next thing you need to ask is am I putting the child at financial risk? If you should pass away will the child be able to pay for any debts you have incurred? If you pass away will the child be able to go to school? If it is not child but children, who has agreed to look after these children in your absence? Will the appointed guardian afford to look after the children? And let's say, in case that you are well-off will these children be at risk of having the wealth taken from them? Or will they potentially take it from each other? These questions require that you sit down and soberly, extensively and frequently assess them. Speak to an expert. Write a will. Then ask yourself every time a life changing event happens, if that graduation, loss, birth, gain or change in circumstance changes your wishes. If yes, rewrite your will. Reassess your position. Rethink your plan. As it is often said failing to plan, is planning to fail; however what is left out is the fact that sticking to a plan that ignores change is nearly as bad.

If your child cannot pay for the debts from your estate, get some life cover. If the child is at risk due to financial constraints, get some life cover. If your child will be unable to go or continue going to school, get some life cover. Talk to an expert to find out where you are exposed and find a solution.

If you worry that your child may be at risk in the hands of a guardian, find the appropriate financial vehicle or protection to wrap that money, those assets, those rights, those patents - whatever is in your assets column - in, to ensure it works for the intended recipient/s. Also get very specific. While contemplating your demise it not something anyone enjoys I believe that the idea of seeing your legacy - big or small - wasted or dashed to nothing and flushed down a drain is more painful than being uncomfortable for a moment and protecting it. It is as much about you as it is about the next generation.

I believe we must start early; start with care; start with a plan. If we cannot, then we must start planning as we go with a clear view of the future and a face towards the sun.

https://www.youtube.com/watch?v=4NHVvLGU7i8