How to successfully protect and transfer your generational wealth!
Like in 1998 when the markets crashed and consumers were left scrambling to make ends meet and ensure their family’s financial future was secure, there is no doubt that events of the past two years have had a similar effect.
However, this has been compounded by the loss of life and the fear of what that means for those left behind and has shone a light on the importance of planning for the unforeseen.
The good news is that our recent generational wealth survey indicated that 92% of South Africans are tackling their finances head on, despite economic instability.
The pre-2020 outlook was very different and so this definitely is good news, meaning that consumers have learnt from the impact of the years past.
Where are consumers in terms of financial planning?
However, while in general consumers are taking their finances more seriously, we have to ask the question as to the role of succession and estate planning fits into that financial picture.
The reality? For the most part, it sure doesn’t! There is minimal focus on estate planning where those that have Wills in place stand at a mere 36% – that indicates that close to 70% of consumers don’t have a Will.
As the first step in succession planning, this raises large concern where consumers are not able to protect their families’ financial futures as well as protect and transfer generational wealth – a key contributing factor to increased levels of financial insecurity and in some instances poverty.
The importance of estate liquidity in succession planning
Many consumers are put off by starting the succession planning journey as the complexity of estate planning is cumbersome and one very few people have any sort of understanding of how to tackle.
The good news, however, is that today there are innovative products on the market that ensure consumers are able to protect their finances through things like life cover but also, those products that remove the complexity of estate planning and moreso, ensure that costs and challenges traditionally associated with this process, executorship and Wills are best planned for, managed.
Critically too, is that products like this address any estate shortfall to provide liquidity in the estate which is crucial for grieving families – removing the financial pressures during what is a difficult time.
Ensuring the correct estate planning documents are in place and the estate is correctly set up avoids long, expensive processes and instead speeds up the transfer process and decreases costs.
An innovative financial solution to convenient estate planning
1Life’s new Wills and Estate Plan does just this – provides liquidity for the family while simultaneously protecting the family’s future wealth and ensuring that the money and assets left behind are correctly distributed.
This plan is an innovative life insurance policy that includes critical financial aid from an estate point of view.
Essentially, it is a policy sold through 1Life Vantage and executed in partnership with leading fiduciary experts, Fairheads, which includes an estate shortfall lump sum of up to R10 million, paid out to the Estate, a liquidity benefit of up to R50 000, which is paid out to beneficiaries within 48 hours of a successful claim as well as a monthly income that is paid to the chosen beneficiary for a period of six months.
It also includes a free additional Executor benefit, which provides consumers with significant discounts on executor and conveyancing fees.
This, once again, helps to lessen the financial burden for families when a loved one dies, as well as ensures further liquidity in the estate.
Your Will – the passport to succession planning
Over and above this, consumers are given access to a 1Life Will which is a new, online will drafting service created in partnership with Cliqtech.
This service helps users draft a will in just 15 minutes and is supported by a team of fiduciary experts that work closely with both the adviser and client to draw up a valid, signed, and retrievable will, as well as assist with any estate planning requirements.
Moreover, the document is safely and securely stored in a fireproof facility, after it is completed, ensuring both its validity and security.
Moving with the times
This product also provides your financial adviser with one view of your assets and life stages, for as long as the Will is kept with 1Life Insurance meaning that as your life and priorities shift, so too can your financial planning be adjusted.
A digitally enabled, quick and effective platform is used to process policies and information straight away, without having to wait weeks for meetings and endless paperwork – from Wills to estate planning and digital acceptance.
And, unlike many other players, 1Life ensures no disintermediation – meaning that you and your adviser remain the key partners in the deal.
As a life insurer committed to changing people’s lives, we believe that this offering is bespoke – taking into consideration budget constraints of each individual as well as ensuring that each person’s financial and estate plan is optimised and customised based on individual circumstances.
The aim? To educate consumers around the importance of wealth transfer, while encouraging and promoting wealth perseveration through a simple, effective and successful process – guided by professionals.
For more information, please contact us here.
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