159 - Ensuring all is in order for when you're no longer around

Question: My wife and I are in our mid-80s. I am not in very good health, and I would like to leave my affairs in the best possible order should 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: South Africa is a developing country and faces many of the challenges that developing countries face. We are also in an election year so all the country’s problems will be highlighted.  This can be quite scary.

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

There is no value add if you transfer half 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 the 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 get waived when property gets transferred out of a deceased estate, so there is also a financial reason not to transfer now.

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

• Living annuity beneficiaries

 Check that your spouse is the beneficiary on your living annuity. 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 advisor to provide a detailed list all your insurance policies and their beneficiaries.  Check that each policy has the correct beneficiary attached to it. I have come across situations where ex-spouses and girlfriends end up receiving the proceeds of a policy even though the deceased had remarried.

• Locate any divorce orders

This is not a document that we refer to regularly, but it is often needed when an estate is being wound up. I have seen long delays in the finalization of estates because a divorce order could not be readily found.  So, scratch around those old shoe boxes in the attic and locate any old divorce orders. Keep these in a file and let your loved ones know where they are.

• Locate any birth and marriage certificates

Again, these are not documents that we use in everyday life but in sorting out an estate they will be needed. So, find where they are and keep them in a folder.

• Your 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, 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 on a permanent basis, please ensure that this is mentioned in your will as 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 SARS in order to get the correct outcome for your estate.  I have seen the estates take 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 passwords to your computer, any websites you run, your social media profiles and online financial access.

I'm not sure what the best way of doing this would be.  You do not 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 of passing 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 finalization of your estate.  I have drawn up a template that lists all the major documents that may be needed in the event of your passing away.   Should you want to copy, drop me a line and I will gladly e-mail it to you.

Kenny Meiring MBA CFP ® is an independent financial adviser who helps people put investment and risk structures in place to live wonderful lives.  You can contact him on 082 856 0348 or at Financialwellnesscoach.co.za. Please send your questions to kenny.meiring@sfpwealth.co.za