How to Reduce Estate Costs

Death can be an expensive affair and it is easy to underestimate the costs involved, especially as some unconsidered fees can quickly add up.

As well as the funeral expenses, those left behind can be liable to pay mortgage bond cancellation costs, appraisement costs, Master’s Office fees, legal fees, costs of realisation of assets, bank charges, transfer costs of fixed property or shares, maintenance of assets, advertising costs, probate fees, postage and sundry costs, short-term insurance, taxes on investments, and even duplicate motor vehicle registration certificates…

Estate costs generally fall into two categories – administration costs, which arise as a result of the death; and claims against the estate, which are the liabilities of the deceased.

Generally, the biggest administration costs tend to be the executor’s and conveyancing fees.

However, advance planning can help to cover estate costs or at least reduce them significantly. Here are 6 things you can do now to reduce your estate costs for your loved ones in the future. Don’t hesitate to arrange a meeting to discuss your options.

1. Leave a valid will

If you die without a valid will, your estate will be devolved according to The Intestate Succession Act, rather than in accordance with your wishes. Not only is it likely that some of your assets will not be distributed how you wish them to be, but this process can often be more complicated and come with higher legal fees, as well as the potential for costly disputes.

2. Negotiate the executor’s fee

The devolution of an estate requires an executor to sign off the liquidation and distribution of assets, and confirm that all costs are correct. Once you have appointed an executor, you should try to negotiate the executor’s fee when you are drafting your will. You could either then stipulate the fee in the will or request that the executor confirm the agreed fee in writing.

Depending on the composition of your estate, the executor will quote a fee in accordance with how much work is required, and you could potentially negotiate up to a 50% discount.

If your estate is relatively straightforward — for example, you only have one heir, no business or offshore assets, and sufficient cash to cover all costs, you may find that the executor will offer a big discount.

However, if you do not explicitly specify the executor’s remuneration in your will, it may likely be calculated according to a prescribed tariff of 3.5% of the gross value of all your assets. The executor will also be entitled to a 6% fee on all income earned after the date of your death, and if the executor has registered for VAT, then another 15% will be added to the grand total.

3. Avoid costs of security

According to an article published on Moneyweb last year, “costs of security can be avoided completely by exempting the nominated executor from lodging the bond of security in the will.”

4. Prepay your funeral

Planning and paying for your funeral before you die removes a rather big expense that your family or estate must cover after you’ve passed. By choosing the type of funeral you would like in advance, you not only fix the costs, but you also save your loved ones the difficult job of making decisions and having extra admin while they are in mourning. You can simply pre-pay the money into an insurance fund or trust account where it will sit until the time comes to pay for your funeral.

5. Jointly own property

A simple way of potentially reducing estate costs is to hold assets, such as a house, with another person. When you die, any joint asset should automatically pass over to the surviving owner, so will not be considered part of your estate and subject to probate fees. Do note that probate fees can be substantial, so it is important to factor them into your estate planning.

6. Buy life insurance

If there is insufficient cash to settle administration costs and claims against your estate, the executor will need to approach your heirs to see if they are willing to pay the shortfall to avoid the sale of any valuable assets.

If you don’t have enough funds to cover a bond, think carefully about whether you wish to leave the property to someone specific, as they would have to settle the costs and the property may end up being more of a burden than a benefit. If you wish to bequeath an item to a beneficiary, it is best to do so free from any liabilities, as all your debts must be paid before any money or property can be passed on.

To avoid leaving your heirs in a situation where they are forced to settle outstanding debts, it is important to take out life and/or bond insurance to ensure sufficient cash is available to cover any accumulated claims.

Life insurance proceeds are always paid tax-free, and you can name your estate as the beneficiary, in which case the money will be paid to your estate to cover estate costs. Although your estate will pay probate fees on the proceeds, it will ensure your estate has enough cash to pay debts, taxes and other obligations, so as to avoid the sale of assets that beneficiaries may wish to keep.

Alternatively, you could name a beneficiary for your insurance proceeds, and the money will be paid directly to them. If you do this, the money bypasses the estate process and will not form part of your estate, so will not be subject to probate fees and there won’t be any delay in receiving the money.

(Information gathered from moneyweb.co.za and getsmarteraboutmoney.ca)

Truths About Trusts

Did you know that a trust is not simply: a trust?

There are many different classifications of trusts in South Africa, such as ownership trusts, bewind trusts and curatorship trusts.

Trusts can either be created during a person’s lifetime, which is known as an inter vivos trust, or set up according to a person’s will after they die, which is known as a mortis causa trust.

Different trusts give beneficiaries different rights, depending on how much a trustee wishes to distribute of an income, assets or capital to beneficiaries. And trusts can be used for a variety of purposes, from asset protection to charity. There are also ‘special trusts’, which can be set up for the benefit of a person with a disability, or relatives who are under 18 years old.

Although trusts have been around for centuries, there are many misconceptions that surround them and they have become far less popular in the last couple of decades. The SA Revenue Service (SARS) is arguably partly to blame for the bad reputation that trusts now have, and their continual criticism has resulted in many owners deregistering their trusts and transferring out their assets.

Given that there is a quagmire of misinformation out there, it is important to educate yourself if you have a trust or are thinking of creating one. Here are 5 truths about trusts that may debunk some myths and help you on your way:

1. Trusts aren’t only for the wealthy

Although many people believe that trusts are only for the rich, the best time to set up a trust is actually when you are making preparations to build wealth, before you have accumulated a significant fortune. Registering a trust after you’ve generated wealth could end up being expensive — due to various costs, such as capital gains tax and transfer fees that you will need to pay when you move your assets into trust.

2. Trusts can help with tax planning

A unique feature of trusts is that they allow you to shift tax burdens from the trusts to beneficiaries through the ‘conduit principle’, which, according to the South African Institute of Chartered Accountants (SAICA), means that “if income accrues to a trust and the trustees award it to one or more beneficiaries in the same year, the income retains its nature in the hands of the beneficiary.” This basically results in less taxes needing to be paid.

Even though the sole point of a trust isn’t to save on taxes, you do stand to save on capital gains tax, estate duty, executor’s fees and income tax if you set up a trust and manage it properly. Consequently, SARS is not a fan of trusts, particularly because trusts enable the postponement — and potentially the avoidance — of estate duty in the event of death.

All trusts need to be registered with SARS and the trustee is usually the representative taxpayer of a trust. However, the income of a trust can be taxed in the hands of the donor, beneficiary, or the trust itself.

3. You can still control your assets in a trust

Contrary to popular belief, a trust can be structured in such a way that allows you to maintain a sense of control over your assets. You can legally be both a trustee and the founder, and you can even be a beneficiary, while maintaining the legitimacy of the trust.

4. You can do your own admin

When it comes to setting up a trust, be sure to choose your service provider wisely, as some charge exorbitant fees. If possible, it can be worth doing as much of the administration as possible yourself, so as to reduce costs and ensure that your financial plan is executed as per your intentions.

5. It’s important to read your trust deeds

If you do decide to include a trust in your estate planning, be sure to always take the time to read your trust deeds and to adapt your trusts to any changing circumstances. Many trustees have little knowledge of what is expected of them as managers of a trust. And no trustee can ever claim ignorance if they don’t strictly adhere to the management of a trust deed.

However, a trust will only be investigated by SARS if it is obviously being misused or mismanaged. If it is correctly structured and administered in accordance with common law, the trust deed, and the Trust Property Control Act, a trust is a perfectly legitimate investment vehicle for South African tax residents.

(Information gathered from SARS and IOL)

Don’t Underestimate your Will Power

Avoid the heartache and headache!

This year, National Wills Week is from 17th to 21st September, and is a time when participating attorneys in South Africa will draft basic wills for free. If you haven’t already written a will, this presents the perfect opportunity to do so before it’s too late.

Writing a will could make an enormous difference to your family in the future, and it is an easily achievable goal that will give you the peace of mind that you can take care of your loved ones after you’re gone.

Lots of people put off writing a will because they mistakenly believe that it is a difficult task. However, the process doesn’t have to be complicated if you work with a professional who has the expertise to ensure that your will covers all key factors and complies with all your wishes; then is correctly drafted, witnessed and signed with no room for misinterpretation.

It is important that the person who drafts your will also has the necessary knowledge to ensure that it meets all legal requirements, so that your will is valid. A practising attorney is a qualified law professional who can also advise you on any problem that may arise.

Will I, won’t I?

If you have made a valid will, once you pass away, your assets will be disposed of in line with your wishes. This division of your estate is called “freedom of testation”.

On the other hand, if you depart without leaving a will, you could cause a lot of unnecessary heartache and headaches to the people you leave behind. If you don’t leave a valid will, your assets will be distributed according to the provisions of the Intestate Succession Act. This generally ensures that your possessions are transferred to your spouse and offspring, but certain problems can easily arise if you die intestate.

The intestacy laws in South Africa at the time of your death will dictate what happens to your estate and, given the nation’s instability, there is no guarantee that they will be as fair as the provisions in place now. In a country where corruption, poor governance and deficient administrative systems are order of the day, would you be happy knowing your hard-earned money could easily end up lining the wrong pockets?

Without clear directions as to distribution, it is likely that at least some of your assets will not go where you would like them to. Not only may they not be left to the people of your choice, but a lack of instructions could also cause conflict amongst your loved ones at an emotionally vulnerable time. Without a will, it may take a long time for an executor to be appointed, and it can result in additional and unnecessary costs. A failure to do any estate planning also means that your estate may be subject to a hefty tax bill, which you have the power to lessen considerably if you seek professional advice and make sufficient preparations before you pass.

Never underestimate the importance of drafting a will. And, once you have made one, you should be sure to review and update it at least once a decade, as well as after any significant life changes, such as having a child or getting married/divorced.

Don’t hesitate to arrange a meeting if you require more information, or wish to discuss your financial situation before taking advantage of this year’s National Will Week by drafting a basic will with the help of a participating attorney. Just be sure to contact your local provincial law society beforehand to check whether an attorney is reputable.

(Information gathered from lssa.org.za and infinitysolutions.com.)

6 Estate Planning Tips

In the wake of the 2018 budget, there are recent changes that could affect your estate, especially with regards to paying VAT, Master’s fees and estate duty.

Here’s a quick snapshot!

The good news is that executor’s fees remain at 3.5% of your total assets, plus VAT. However, as you’re likely all too aware by now, VAT has increased from 14% to 15%, which means that if your executor has registered for VAT, you will feel the effect of this hike.

The Master’s office has also changed their fee to work on a sliding-scale structure. Whereas previously, the maximum fee was ZAR600, you could now pay up to ZAR7,000.

If your total estate is valued at over ZAR30 million, you will be affected by a 5% increase in estate duty and are now liable to pay 25%. However, if your estate is less than this amount, you will still only be subject to pay 20%.

In light of these recent changes and any increases that may affect you, here are 6 estate planning tips that can help you to protect your assets and potentially save you money:

1. Update your will and review beneficiaries

Whether you have children or not, one of the most important parts of estate planning is to make sure you have a will, which is a legally binding way of nominating beneficiaries and guardians. Once you have written a will, it is important to update it when the need arises. As the years go on and your situation changes, you may wish to change the names of beneficiaries in your will, life insurance policies, trust deeds and group life funds.

It’s also important to make sure that your loved ones know exactly where to locate all necessary documents in the event of your death.

2. Make a living will

It’s a good idea to draw up a living will, which is written evidence of your wishes with regards to the type of medical care that you would (or would not) want in the event that you don’t have the physical capacity to communicate your needs. This is especially important in cases where there is no hope of any sort of significant recovery.

3. Appoint guardians and trustees for minors

Deciding who would raise your children if you and your partner both die is a difficult task that many parents avoid doing. However, it is essential to nominate a legal guardian for any minors in your will in case there is ever a tragedy that would leave them orphaned. The legal guardian/s that you choose for your kids will be responsible for looking after them until they are 18 years old, so it is not a decision to be taken lightly, and there are several factors you should consider, such as the guardian’s age, location, financial situation, and existing responsibilities.

You can also set up a trust in your will so as to provide an income and capital for your children, and you can make additional provisions for their guardians. Furthermore, you should appoint a trustee in your will — their role is to administer your children’s inheritance to them, while a guardian’s role is to care for them. It is crucial that you appoint a trustee for inheritances by minors, as in the absence of such provisions in a will, your child’s inheritance will be kept until they reach adulthood in the Guardian’s Fund, which falls under the administration of the Master of the High Court.

4. Make donations

Donations tax still remains at 20% if you donate less than ZAR30 million in a tax year, and increases to 25% for donations exceeding this amount. However, you can donate up to ZAR100,000 each tax year to children or a trust, without needing to pay any donations tax; and there is no limit on the amount that you can donate to your spouse tax-free.

You can reduce your estate and avoid significant estate taxes by making donations. There are various other ways to limit certain taxes, such as estate duty and capital gains tax, depending on your family situation and the size of your estate, so don’t hesitate to arrange a meeting to discuss the options.

5. Secure your offshore assets

If you intend to keep any offshore assets, it means you have a foreign estate that needs to be administered too. Each country has its own legislation when it comes to dealing with inheritance, and a South African will won’t necessarily meet another country’s legal requirements, so you’ll need to execute a separate will in the jurisdiction that deals with the assets.

6. Get life insurance

When it comes to winding up an estate, many people are faced with liquidity issues, which is when there is not enough money to settle the estate’s liabilities — be that a bond, vehicle finance, taxes, executor’s fees or conveyancing costs.

If this is the case, your loved ones could be forced to sell assets, such as the family home, to cover the expenses. For this reason, it is important to get comprehensive life insurance, which will provide estate liquidity in the event of your passing.

(Information gathered from findanadvisor.co.za and proactivewillsandestates.co.za.)

Severe illness cover

Each year, about a million people need to stop working due to an illness or a debilitating injury. Yet, according to an article published in The Times, only 10% of people have severe illness cover.

A severe illness is a medical condition that prevents you from leading your normal life, and the life industry covers a wide range of these dreaded diseases and health conditions, from Type 1 diabetes to Parkinson’s disease. However, the ‘Big Four’ — a heart attack, a stroke, cancer or a coronary artery bypass graft — form the core of most policies, as these form over 80% of claims.

A severe illness usually requires regular visits to specialists, treatment, medication, and potential lifestyle adjustments. However, it is possible to survive a severe illness with the right medical treatment and support.

Why is severe illness cover necessary?

A severe illness typically has three phases: 1. Diagnosis; 2. Treatment; 3. Recovery. Your medical aid and gap cover should be able support you through most of the basics of the first two phases, but severe illness cover is designed to support you through your recovery period, which can be expensive and is when you are likely to feel the financial impact of costs that you might not have initially considered.

While your medical aid and gap cover may pay for the direct costs of a severe illness, such as hospitalisation and basic treatment, there may be annual limits. It will also probably not cover specialised treatments, alternative therapies, and rehabilitation; or indirect expenses that arise to meet necessary lifestyle changes, such as taking time off work to recover, making home and vehicle adjustments, or hiring an au pair to look after your children.

Around half of people who survive a severe illness also suffer some form of depression, but one of the most commonly overlooked expenses is the treatment of depression, which can last weeks or years.

Disability cover vs. severe illness cover

If you have already sensibly taken out disability cover, you may think that severe illness cover is superfluous to your needs. However, you would be wrong. While basic disability cover is an important precaution that will protect you in the event of being permanently unable to work, it may not pay out if you are temporarily unable to work due to a severe illness that isn’t terminal.

Many employers in South Africa will pay 30 days of sick leave over a three-year period, but your monthly income will likely be reduced when you have used all of your entitlement. While disability cover will come into play if your income needs to be replaced on a long-term basis, severe illness cover will pay out a tax-free lump sum that you can use to replace any lost income for a short period.

A severe illness policy should also be able to cover anything from overseas treatment, to assistive devices and a home helper. The tax-free lump sum payout can be used immediately in whatever way you choose, so that you can have the best possible treatment and recovery plan, without having to dip into your investments or savings.

The options

Many severe illness policies pay out in tiers in accordance with the severity of an illness. So, for example, if you are diagnosed with stage 4 cancer, which is the most severe form of the disease, you will likely receive a payout of 100% of the sum insured. However, if you are diagnosed with a cancer that has less of an impact on your lifestyle, you may receive a payout of up to 75% of your cover amount. Likewise, if you have a heart attack, your payout will be determined by blood markers and the level of damage to the heart tissue.

If you have this ‘tiered benefit’, you can receive another payout if the illness progresses and becomes more severe. However, if you receive a 100% payout when you are first diagnosed, you cannot claim again for related conditions. If you have a comprehensive policy, you can receive benefits if you suffer a claimable illness that has nothing to do with your first claim. For example, if you once received a payout for a stroke then are diagnosed with cancer years later, you can also receive up to 100% of the sum insured for the second condition. Just do be sure to enquire beforehand as to your insurer’s definition of an unrelated claim, as this can differ between providers.

Whether you choose a stand-alone benefit, or one that accelerates, can also make a big difference to the cover you receive. Accelerated benefits may be cheaper, as they essentially are an early payout of your life cover, but they can also reduce other benefits.

In recent years, there has been an increase in the number of claims for the early stages of severe illnesses, which shows that policyholders are consulting their doctors earlier, thereby greatly improving their chances of successful treatment at a lower cost. Given that it is better to vigilant about your health and seek advice and treatment as soon as possible before a disease progresses, it is very important to opt for comprehensive severe illness cover that allows the flexibility of early payouts.

A comprehensive policy should have a catch-all category that will cover you if you contract a severe illness that does not fall within a specific definition.

If there’s a history of a severe illness in your family, it is advisable to have regular medical check-ups so that you can be diagnosed early if you are affected. An early diagnosis, along with comprehensive severe illness cover, can maximise your chances of recovery. If you have already had a severe illness, you may still be eligible for cover but, depending on the type of severe illness suffered and your age at the time, there may be restrictions, such as exclusion of specific illnesses.

A monthly contribution to a severe illness benefit can significantly ease any recovery or even save your life. Nowadays, over 300 illnesses are covered on some severe illness policies, but the breadth of cover beyond the core four illnesses may affect your premiums. Don’t hesitate to arrange a meeting to discuss the range of options and benefits available.

Avoid crippling your finances

It is highly likely that one of your biggest assets is your earning power. It is vital to protect this asset and ensure you maintain a steady salary until you have reached your financial goals.

Many people take a head-in-sand approach when it comes to income protection, believing that they’ll never be inflicted with a disability, or assuming they can find a quick resolution if they are. However, this doesn’t necessarily equate to positive thinking, but rather naivety. A more responsible approach would be to hope that disaster won’t strike, while still having a back-up plan in place in case life has other ideas.

The truth is that a lot of circumstances are completely out of our control. And for most people, the reality is that losing a regular income stream (particularly that of the breadwinner) could potentially result in not being able to afford everyday items, such as groceries, as well as larger expenses, such as school fees and bond repayments.

If an unforeseen circumstance arises that prevents you from working, and you haven’t protected your income, you could immediately feel the blow and the knock-on financial effects for years.

Statistics highlighted in an article published on Money Marketing highlight that over a quarter of people will suffer a disability between their twenties and when they retire, and that 10 people per hour have a stroke in South Africa. Unfortunately, anyone can have a debilitating accident or develop a medical condition at any given time, so it’s important to safeguard our financial affairs in order to look after our liabilities and loved ones.

When it comes to disability cover, there are many options, but it’s advisable to choose the most comprehensive cover that you can afford. Fortunately, income protection benefits offer much more holistic protection nowadays, and can cover other claim categories, such as critical illness, hospitalisation and functional impairment. This is of particular note as, in 2017, almost half of the disability claims paid by a leading insurer fell under the classification of functional impairment.

You can easily reduce your financial risk exposure, protect your investments and ensure you can meet all your obligations by investing in comprehensive disability cover. A holistic disability cover will provide you with more certainty, so that you can rest assured that your financial situation is protected in all eventualities. Please don’t hesitate to arrange a meeting to seek advice on selecting the right disability cover for you.

(Info from moneymarketing.co.za)

Your health is your wealth

“It is health that is your real wealth” — Mahatma Gandhi

Many entrepreneurs and ambitious people are concerned with climbing the career ladder and building their wealth. However, as you get older or suffer bouts of illness, you will start to appreciate the true value of your health and not take it for granted. Although achieving your goals is understandably important, you don’t need to completely abandon your health in your pursuit of success.

It’s simply not worth sacrificing your physical or mental health for the sake of your financial health. It is as important to lead a balanced lifestyle as it is to have a balanced portfolio, and to treat your health like your savings plan by investing in it regularly.

Certain practices that are common in today’s high-paced world — such as eating lunch at your desk, going home after dark, not having enough sleep — won’t help you in the long run. Working over 12 hours, eating junk food, and only catching a couple of hours of shuteye each day isn’t a healthy way to live and can easily lead to burn-out or severe illness.

And, what’s the point in saving for your future if you’re not going to be able to enjoy it?

Many illnesses these days are stress-related or the result of an unhealthy lifestyle, and are actually avoidable. For example, Type 2 diabetes is a common example of an often self-inflicted disease. And even If you don’t immediately die from an illness, you could still suffer some serious side effects that can last into old age and may stop you from doing some of the things you want to do.
Ultimately, prevention is better than cure. Starting a retirement plan isn’t the only way to make sure you will live comfortably in your autumn years. You can also prepare for your future by taking good care of your health. Otherwise, all those years of chasing dollar signs could cost you dearly, and you could end up paying a much bigger price — financially, physically and emotionally.
If living a longer, healthier life isn’t enough motivation to start caring for your well-being, then see your health as another financial investment, as being healthy can actually save you money in the long run! The cost of medication, doctors appointments and hospital stays can add up to way more than the cost of gym membership, healthy meals and adequate insurance. It may cost a bit of extra money now to stay healthy, but it’s even more expensive to get sick.
Value your health, as you could do much better things with your hard-earned money than spend it on chronic medication and specialist appointments that could have potentially been avoided.
Just as your savings are your responsibility, so is your health. Small lifestyle changes — such as going on a daily walk or drinking a green juice instead of a Coca Cola — can make a big difference.

It’s simple really — exercise regularly, let food be thy medicine, get enough rest, and spend quality time with your loved ones.

And just as you get professional help with your investments, it can also be worth employing experts to help you to attain your lifestyle goals. A personal trainer or a nutritionist can guide you in making good choices, just as a tax consultant can advise you when it comes to filing your tax return.

Ultimately, you still need to do the real graft yourself, but a qualified professional can encourage you, as well as save you from making mistakes that can make it harder to achieve your goals.

Manage your health for the sake of your wealth, and realise the value of a healthy body and mind. As with many things, a bit of foresight and preparation can save you a lot of issues in the long run. Don’t hesitate to arrange a meeting if you wish to make any changes to your financial plan to ensure you can maintain a healthy portfolio that complements, rather than obstructs, a healthy lifestyle.

Females and Finance

This Thursday, 9th August is National Women’s Day, which marks the historic moment on 9th August 1956 when 20,000 South African women of all races showed that they would not be intimidated by unjust laws when they marched to Pretoria’s Union Buildings to present a petition to the prime minister against the carrying of passes. It was one of the largest demonstrations staged in the country’s history and, to commemorate the event, the first National Women’s Day was declared a national holiday in 1995 once South Africa was a democracy.

Since then, celebrations take place throughout the country on this day each year, and August has been declared National Women’s Month.

With various campaigns that have come to the forefront in recent times, such as #MeToo and #ImWithHer, women are more empowered than ever. However, there is still a long way to go in terms of female rights around the world, and women are still often subject to discrimination and inequality, not to mention harassment, in the workplace. According to research published in September 2017, female managers in the UK earn GBP12,000 less than their male counterparts, and the World Economic Forum believes that it will take 170 years to completely close the gender pay gap around the world.

South Africa is particularly guilty of this gap. A 2017 report run by a market research firm highlighted that women in South Africa earn, on average, 27% less than their male counterparts. And the report found that the difference is even wider when it comes to high earners, with men in top positions earning as much as 39% more than women of the same standing.

Experts believe that this pay inequality could be one of the reasons that many South African women are not properly prepared for retirement, as recent findings published in Fin24 have revealed that 32% of female South Africans feel unsure about their retirement plans, while men seem to be clearer about their long-term investments.

A survey conducted by Ellevest has found that women don’t invest as much or as early as men do, so women often retire with less money, even though they also tend to live longer than men. Many of the women surveyed were actually very clear on their financial goals — retirement, travel, and paying off debt were the top three priorities — but less than half of those questioned said they know how to achieve these targets.

The survey showed that the majority of women are dissatisfied with many aspects of their finances, such as their net worth, their investment portfolio, and their retirement savings. And less than half of the women surveyed felt satisfied with their financial knowledge. Furthermore, 48% agreed with the statement that “most women have to work twice as hard to get half as much,” and this double standard clearly needs to be rectified.

Taking control

Slowly times are a-changing and, in January 2018, Iceland became the first country to make it illegal for women to earn less than men in the same position. As women are gaining more and more control over their professional lives, they are also looking to take more control over their finances too. Experts believe that a key step to female empowerment is for more women to get involved in their family’s long-term financial planning.

Although gender discrimination is sadly still an issue in our society, it’s time for more women to take responsibility for their savings plans, including retirement preparation, which is often left to men.

Recent political and economic events across the world are forcing women to reevaluate their financial situations. Many women questioned by Ellevest admitted that putting away money for their financial goals would boost their confidence, and the survey showed that women clearly value the feeling of being financially savvy. According to the survey more savings equates to more confidence for many women — and is more important than salary and support in the workplace.

National Women’s Day pays homage to the women of South Africa who fought against the tyranny of the Apartheid government and helped to shape the country. Their march in 1956 when they delivered bundles of petitions containing more than 100,000 signatures was an inspiring display of political and inner strength, as well as female solidarity. Let this day serve as a reminder of the capable women who continue to pave the way forward; and let it give courage to women across the nation to realise their strength and to take control of their wealth portfolios.

(Info sourced from time.com, fin24.com and iol.co.za)

Tax practitioner services

Filing a tax return can be confusing and time consuming, particularly if you have more than one source of income or are eligible for several deductions.
As frustrating as bureaucracy can sometimes be, expressing your irritation to anyone at SARS will probably not get you far. If any issues arise, it’s best to contact SARS professionally in writing so that your discussion is recorded and can be referenced.

If you wish to relieve yourself of the burden of filing a tax return, it’s worth seeking professional assistance. Although you will need to pay a fee for the services of a tax practitioner, it can actually work out cheaper than having an entire claim disallowed or being issued with a penalty for an incorrect claim. Furthermore, the fees are likely to be deductible against your taxable interest.

Registered tax practitioners

If you do decide to seek support in submitting your tax return, it’s important to only hire an accredited tax practitioner who is registered with SARS. They should also be registered with an approved controlling body, such as the South African Institute of Tax Professionals, as a controlling body ensures that members are up-to-date with their personal taxes, don’t have criminal records, and have the necessary qualifications to accurately file other people’s taxes.

It is your responsibility as a taxpayer to ensure that any tax practitioner you use is accredited and registered. Only a registered practitioner can legally complete a return on your behalf (you will need to sign a power of attorney form), as well as maintain your details and register you for new taxes.

If you get audited, the tax practitioner should also be able to handle the audit on your behalf. This is often just a matter of submitting supporting documents to SARS, which they will already have. Be sure to choose a professional who you feel confident will be there for you if you have any trouble with SARS at a later date. Someone with an office number and an office address, as well as an online presence, will likely be your best bet in this regard.

It’s advisable to do your research before choosing a practitioner, as a bad one could end up costing you a lot more than just their fee. Before deciding who to use, ask them some questions. Firstly, find out if they are registered with SARS and with which controlling body. If they are registered, they will have a SARS practitioner number, as well as a membership number with their controlling body.

Every tax return is different so it is best to make sure your practitioner has experience dealing with something similar to your particular situation. If you have a basic return with only an IRP5, then most tax practitioners should be able to file it easily. However, If you have investments or earn rental income, then your tax return may be a bit more complicated and require more expertise.

A good practitioner is likely to ask you some questions in order to gain an understanding of your personal tax situation. Your answers will enable them to inform you what documents you will need to submit, so that you can avoid doing things piecemeal, which could delay the filing of your return and your tax refund.

Do also be aware that good tax professionals usually file their clients’ returns electronically, either using SARS’ e-Filing system or specialised tax software. Filing returns electronically rather than manually is much quicker (so you will get your money much quicker if you are due a refund), and it also minimises room for human error.

Fees

Rather than asking a practitioner what their fees are, ask how they calculates their fees. The fee is likely be based on the complexity of your tax return and how long it will take to file it.

It’s important to not agree to a contingency fee, which is when a practitioner calculates their fee based on a percentage of your tax refund. Do note that this practice is prohibited, as it is argued that it encourages practitioners to try to claim more money than is actually due — be that through under-declaration of income or inflated deductions.

Financial yoga

You don’t have to be able to do a headstand or salute the sun every day to appreciate the benefits of yoga. Now, this isn’t to say that everyone needs to start a daily practice, but it can be helpful to recognise that we can learn a lot from this ancient discipline.

When you practice yoga, you are not only studying the asanas (postures), but you are also honing valuable life skills, such as flexibility, balance and mindfulness. This Thursday, 21st June marks International Yoga Day and is a time to reflect on how yoga is to be lived, not just performed. What you learn on the yoga mat can be applied to several contexts — including your financial situation.

With this in mind, here are 7 tips to help you to achieve a more zen state of mind when it comes to your financial affairs.

1. Set your intentions

Yogis study yoga not just to master a posture, but to use the posture to understand and transform themselves.

Before starting a sequence, many yogis take a moment to connect their minds to their bodies and set an intention — such as ‘relax’, ‘persevere’, ‘accept’ — that they would like to bring into their practice (and life). Doing this brings awareness to what you are seeking, and helps you to direct your energy towards aligning your actions with what you want to achieve. When it comes to your financial situation, being clear of your intentions can help you to commit to achieving what is important to you.

There is no competition in yoga, so it’s important to keep your focus on your own practice and self-development. To do this, it can help to find a focal point on which to rest your gaze in order to gain more stability. As in yoga, find your focal point in your financial life, as this will help you to remain steadfast even during the most challenging times. When you are faced with fears or conflicting options, focus on what you are trying to achieve so that you can stay on track to meeting your goals.

2. Be prepared

In a yoga class, there tends to be a build-up towards the more difficult postures, which come towards the end of a session. Otherwise your body may not be able to do them properly without injury. Firstly, you need to warm up your muscles, and open your hips or stretch your hamstrings, to be prepared for the final, more challenging poses in a sequence. Preparation is an important part of the flow and helps you to progress.

The same applies to your finances. Once you have decided on your long-term financial goals, you can be prepared and work towards them over time.

3. Find your balance

When you assume a posture, you need to find your balance — and this may not always be where you would expect it. For example, rather than centring yourself over your whole foot, it can help to rather shift your balance over your toes or your heel. How you find your balance can subtly change a posture and your attitude towards it.

Balance is also key when it comes to approaching your wealth portfolio. What small changes can you make to readdress your state of affairs and make your financial situation easier to maintain? Don’t be afraid to adjust something to find a better balance, or change any habits that are making you uncomfortable.

4. Be flexible

If you practice yoga regularly, you are likely to become more flexible — both physically and mentally. Saying you are not flexible enough for yoga is like saying you are too dirty to take a bath, and many yogis believe that it is often not the body that is stiff, but the mind.

Increasing flexibility can help to improve your life and your financial situation greatly, as circumstances change and obligations arise, so it’s important to be flexible. If you can adapt your spending habits for the sake of your financial future, you stand to be much more comfortable in the long run. Being financially flexible on even small things, such as how many coffees you buy each week or how many times you eat at a restaurant, can have a notable impact on your overall budget. Work on your flexibility and strength, and you’ll learn to bend so you don’t break.

5. Find your edge

Yoga is a balance of holding on and letting go; control and surrender. During a yoga practice, you are faced with deciding when to push yourself further and when to accept you are at your limit. The pose begins when you want to get out of it, and it’s often a question of breathing through any discomfort to the extent that your body allows. A large part of the process is working out how far you are able to move into a stretch — if you don’t go far enough, you may not progress, but if you go too far without listening to your body, you could end up causing yourself injury. There is a point between these two places where you can find that balance, and that is known as your ‘edge’. The edge is where challenge and acceptance go hand in hand.

From a financial point of view, it’s a matter of finding a balance between your income and expenditure, and how much you spend and save, so that you can strengthen your situation without hurting yourself. Find your edge and push yourself to your limits comfortably.

6. Take care of yourself

Yoga is not just about self-improvement, it’s also about self-acceptance. It is important to release anything that does not serve you and look after yourself so that you can live a healthy and happy life.

By taking care of your financial well-being, you can avoid the stress of being in debt, and ensure you have enough saved for your retirement. A bit of self-care now can help you in the long run.

7. Be mindful

Mindfulness is about being aware of the present moment and living in the now. In yoga, holding a posture, or paying attention to how your body moves through a sequence, can help you to remain present.

Mindfulness is a question of self-mastery. The moment your mind turns elsewhere, it’s easy to fall off balance. And focusing your mind can help with your finances too — be that committing to a budget or saving for a goal.

Practice yoga on your finances as often as possible. And don’t forget to breathe…