PLANNING FOR DEATH AND UNFORESEEN CIRCUMSTANCES IS AS IMPORTANT AS RETIREMENT PROVISION
Don’t rely on others to make the hard decisions about life after your death or when you deteriorate. Provide them with guidance and craft your plan.
A recent event highlighted the importance of this often-overlooked aspect of planning.
Most people don’t like talking about death, especially our own death or the death of someone close to us. This discussion becomes even harder when it becomes clear that an unexpected illness or event will severely shorten our lives. Realising that not enough time was spent on death planning during past planning sessions places undue pressure not only on you, the planner, but also on loved ones who must deal with the loss of the planner’s life and the aftermath that follows.
I struggle to determine whether it would be better to know exactly when you are going to pass or to remain unaware of your “death due date”. Knowing would make planning easier, but with that knowledge comes other challenges. Being informed should eliminate procrastination and near-disasters that we sometimes experience when death planning is lacking.
Planning must extend beyond solely the death event. What ends for one individual has a severe knock-on effect for many others and can last for a very long time for some. Don’t let the fear of having a difficult conversation and procrastination lead to your death event being even harder on your loved ones.
How can we all make our passing less painful for our loved ones and those who will have to deal with everything that follows?
Firstly, whatever we do will not lessen the pain that our loved ones endure from their loss. It is important to allow those left behind adequate time to grieve. Everyone must grieve and take the time to heal, regardless of how long it takes.
To ease the burden for loved ones, we can leave clear wishes and instructions on how we would like our affairs to be handled when we pass and after we have gone. Don’t believe that having a valid will means your death plan is complete.
Every family is unique, each with its own dynamics, beliefs, traditions, and structures. Develop a plan that suits your family dynamics. If you don’t have a plan, start working on one urgently. This is not the time to let your ego take control. Trying to rule lives from your grave should not be the intention of your plan.
In the South African context, males tend to be the patriarchs, and either through their own doing or family expectations, they are viewed as strong, unbreakable and always in control. Unfortunately, this often leaves their spouses excluded and uninvolved in many important aspects, especially financial ones. Although this tendency is more common among our male population, we have found similar situations where the roles are reversed, especially where the lady of the household is the main income earner and wealth creator.
Inclusivity and regular discussions are vitally important. It is unfair to expect your loved ones to pick up the pieces and unravel the complexities of your financial planning life without ever being part of it. This is particularly difficult for spouses who do not have the knowledge, past experience and know-how to continue with this task.
A recent event highlighted a different aspect of the importance of communication and keeping all parties informed, not only about financial affairs but also regarding the health issues of all affected individuals.
In this scenario, the husband (a typical patriarch) unexpectedly fell seriously ill. Historically, he did not include his children in his financial discussions. They were unaware of his financial position or where any of his important documents, including his will, were kept. Neither did his wife know.
When he recovered sufficiently to communicate with his children, he instructed them to contact us to inform us about his dire health situation and his concern about his wife’s health. This was after spending two months in the ICU. He expressed concern that his wife, who is his sole beneficiary, had suspected dementia and was not capable of managing her financial affairs, let alone the proceeds she was due to inherit from him. No one was aware of this.
We urgently drafted a new will that included a testamentary trust in favour of his wife. Sadly, dad passed away before he could sign the will. This situation now presents many challenges …
How can you, as the planner, make sure your affairs are in order and that your family receives sufficient guidance to make this difficult time easier? Knowing that you have this sorted out will give you and your loved ones the peace of mind everyone deserves.
Consider following the guidelines mentioned below to at least make it easier for your loved ones to ensure a smoother winding up of your estate.
Make sure your will is current and legal and that it expresses your wishes in detail. Try to cover as many eventualities as possible. By this, I mean including substitution beneficiaries, dealing with health and financial challenges of beneficiaries, considering future divorces of beneficiaries, etc. Perhaps it is time for you to have a proper consultation about the wishes and wording of your will; a one-page will does not always suffice.
Avoid joint wills. They create complications if spouses pass away shortly after one another. The Master only deals with original wills, and for the second estate to be registered, the original joint will must be collected from the Master. This can be challenging and time-consuming.
Nominate guardians for underage children. Remember to discuss this nomination with the potential guardians and get their permission. This is an important fiduciary burden and should not be taken lightly. Avoid funds being paid to the Guardian’s Fund. If no suitable guardian can be identified, consider nominating a “minor beneficiary umbrella fund”.
Consider creating a testamentary trust for beneficiaries who may not be able to handle their own financial affairs and planning in the future.
Make sure your family members and your nominated executor know where all your important original documents are kept.
Make sure your family knows who your nominated executor is and provide them with their contact details.
Maintain an up-to-date asset and liability schedule that includes all life assurance details and any corporate benefits you may have. Keep it alongside your will.
Make a list of all financial contracts, such as hire purchase agreements, bonds, and bank accounts (local and global), with the necessary contact details.
Save all passwords in a secure space (the cloud is probably best), and make sure access details are noted and accessible by your executor or someone you trust.
If required, draft a living will and make sure your loved ones know where it is. Remember that a living will is not enforceable; it is merely a wish that you express for medical professionals not to keep you alive artificially.
Consider granting someone you trust the power of attorney over your financial affairs. This is handy should you become ill or injured. Remember that in South Africa, a power of attorney is only valid while the grantor has the mental ability to cancel it. We often encounter clients who have been granted power of attorney by someone with dementia. Such a power of attorney is invalid.
Draft a letter of wishes (don’t instruct, request). The letter of wishes must be accessible to your loved ones and can address anything that you have an opinion about, for instance:
How you wish your mortal remains to be treated (burial, cremation, aquamation, etc.)
If you are cremated/aquamated, where (and when) do you wish your ashes to be scattered? Recently, when my family members arranged to spread their mother’s ashes, she had passed away three years prior, but they waited for their sister to visit from Australia before doing so on Table Mountain. Their brother brought out the urn containing their father’s ashes, who had passed away 40 years ago, to spread together with their mother’s ashes. They had been divorced for many years at the time of his passing, 40 years ago. I am unsure whether he would be happy knowing that his ashes were flying in the Cape Town winds off Table Mountain alongside those of his ex-wife. The kids thought it was a cute idea, but I believe he indicated his dissatisfaction by blowing straight back at them when it was his time to ride the wind. If this is not your desire, state so in your letter of wishes.
What kind of burial service or celebration of life would you prefer or not prefer? Perhaps you don’t want any celebration, but rather a donation to your favourite charity.
Indicate if you wish for any specific item (like furniture or a piece of jewellery) to be gifted to a particular person. Unless an item is of high value, try to avoid mentioning too many individual items in your will. This can create confusion and delays if a listed item is no longer in the planner’s possession.
Dealing with pets.
Mention any special wish or request.
You can also express your willingness (or denial) to donate an organ. If you want to, it is recommended that you register as an organ donor.
Remember that this letter is merely a guide and a request and cannot be enforced. However, it can take much pressure off family members and provide guidance during a period of turmoil.
Draw up a list of important contacts with their contact details.
Make provisions for your life partner for at least a year if they do not have their own resources. It can take a long time for your executor to be approved and appointed by the Master, during which time your assets will be frozen and inaccessible. This becomes even more challenging if you are married in community of property since both your and your spouse’s estates will be frozen until your executor takes charge.
Ensure you nominate an executor who has your best interests at heart and understands the intricacies of administering and settling an estate.
If you don’t like going to the extent of what I suggested above, at least discuss all of this with your loved ones. Talk about all possible eventualities and agree on solutions. Include how your welfare should be managed should you experience memory deterioration. Unfortunately, all of us will face cognitive decline as we age. Often, one person references the other’s memory loss while being unaware of their own deterioration.
If you are a younger family member and your parents are still alive, ask them about their wishes. Old folks tend to avoid this “dark” discussion, but it is necessary.
Don’t rely on others to make the hard decisions about life after your death or when you deteriorate. Provide them with guidance and craft your plan. Failing to plan is planning to fail. Without a clear plan and guidance, you have only yourself to blame if your ashes end up on a bookshelf for 40 years. Unless that is your wish, of course …
