Secure your family's financial future

2013-09-03 15:19
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Cape Town - No woman wants to face that possibility, but think about it: if your husband or partner died suddenly, would you cope with your family's financial affairs?

One of the biggest mistakes women make is to simply leave all financial affairs in their spouse or partner's hands, says Sanlam national trusts manager Zainap Behardien.

This can be unwise, bearing in mind that women tend to outlive their male counterparts.

It really is essential for women to charge of their financial security, says Behardien.

She outlines five things women need to know about estate planning to protect their assets and income.

1. Don’t leave financial planning to others

You need to have your own estate plans in place, says Behardien.

Be sure to have an estate planning strategy separate from that of your spouse or partner - remember, if he passes away first, you will be responsible for the distribution of assets in joint ownership with him.

It is best to enlist a trusted financial adviser to help you with this.

2. Get real about your life expectancy

There are many considerations to take into account when drawing up a financial plan.

Don't forget that you will need to make provision for minor children in the unforeseen event of both you and your husband's deaths, warns Behardien.

Women often misjudge their own life expectancy and the amount of capital they will need to generate a retirement income well into the future.  

Says Behardien: "Providing for mortgage bond payments is perhaps the most important element of a solid plan".

She cautions that many institutional lenders don’t insist on risk cover to pay off the mortgage on death, disability, or serious illness of either or both parents.

3. Family members won't always be impartial executors

Assets and the proceeds of policies should ideally find their way into a testamentary trust created in a will.

Human nature being what it is, nominating a family member may lead to family disputes.

An impartial executor can wind up the estate and manage assets independent of emotional family pressure.

4. Calculate your investments

Women often don’t make the effort to involve themselves in investment matters.

“But remember, the more one learns, the easier it gets. You should try to increase your investment knowledge little by little, day by day,” says Behardien.

Don't just be content to leave the management and investment of your assets to others.

It could lead to you being unaware of important issues, should you suddenly find yourself having to take over the daily running of your financial affairs.  

We all know that women are brilliant multi-taskers, so you should get involved and not sit on the sidelines.

5. Ask questions

Most importantly, says Behardien, is that women shouldn’t be afraid to ask questions.

“Let’s empower ourselves with the knowledge we need to take charge of our own estate planning and in so doing, securing our own financial future and that of our loved ones,” she says.

- Fin24

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