African Rainbow Capital (ARC) on Tuesday (6 August) announced its acquisition of a 25% shareholding in specialist financial services firm Capital Legacy for an undisclosed fee.
Capital Legacy is a player in will drafting and estate administration. Operating since 2012, the company has identified improved, efficient and cost-effective solutions to will drafting, estate planning and execution.
These solutions are significant in a South African context where only 1 in 4 people has a valid will in place at death, said ARC.
“Inefficiencies in estate planning could result in as much as 30% of the value of the estate being used to cover costs. Furthermore, execution could take years and not months to conclude in the absence of adequate planning. This poses several financial risks to the dependants of the deceased.”
These include financial concerns, such as a lack of liquidity to settle debts, estate taxes and other legislated costs relating to the administration of the estate.
For example, if a person dies intestate (without a valid will in place) with minor dependants, those inheritances may either be reduced to cash and transferred to the Government’s Guardian’s Fund or transferred to the minors’ appointed guardians – as opposed to what the deceased originally intended.
In addition, the estate is distributed according to the laws of intestacy and the specific regulations thereof, ARC said.
Capital Legacy founder and CEO Alex Simeonides, said: “Since inception in 2012, Capital Legacy has drafted more than 200,000 wills. The number of South Africans who do not have a will still exceeds those who do. Thus far we have demonstrated that our business is uniquely positioned to offer ordinary people a service from which they can benefit significantly.
“Working with over 4,000 contracted brokers, Capital Legacy can reach many more individuals to educate them about the need to have a valid will and plan properly. Currently, we assist more than 5,000 individuals per month with the drafting of their wills.
“Our experienced estate administrators also facilitate the successful transfer of assets from the estate to those due to inherit, thus assisting the families of people who have passed away.”
ARC co-CEO, Johan van der Merwe, said: “We believe that Capital Legacy fits neatly into the eco-system of financial services businesses that we assemble. These businesses would leverage from one another and create synergies for other businesses within our holistic approach.”