South Cape Financial Services
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Financial Advice

The Advisors at South Cape Financial Services have sufficient qualifications and experience required by the FSB to give personal financial advice to our clients.

Read more below about the variety of financial advice fields
that we offer.

  • - Estate Planning
  • - Estate Duty
  • - Will Planning
  • - Business Insurance
  • - Retirement Planning
  • - Health Care
  • - Investments

Contact George Fourie
Tel: 044 272 7309

Estate Planning

Estate planning is the arrangement of an estate in terms of which the planner's objectives in dealing with the assets and liabilities are achieved. These objectives should make provision for the management of the planner's estate during his/her life and thereafter. Every decision you make concerning your assets qualify as estate planning decisions, whether it be obtaining assets during your life or the division thereof after your death. It is therefore essential to realise that estate planning is necessary for everyone, no matter what the size of your estate may be. The estate planning process facilitates the arrangement of your affairs in a tax-efficient way so that you, your family and beneficiaries enjoy the greatest possible benefit from your estate during your lifetime and thereafter. A properly structured estate will ensure that your dependents are provided for when you are no longer able to, that your business interests are protected and that taxes (estate duty and income tax) are minimized. A lack of proper estate planning may expose your dependents to an unnecessarily delayed settlement process or a cash shortfall in the estate. The dangers of a cash shortfall in the estate include unnecessary taxes, interest bearing claims, forced sale of assets and your heirs being left in a financial crisis.

Estate Duty

When a person dies, all the assets and liabilities of the deceased, as at the date of death, form part of the estate. If this estate is not planned early and thoroughly, it may unnecessarily expose the estate to estate tax. There are a number of ways in which estate duty can be saved, most of which are aimed at limiting the growth in the planner's estate. The facts of each individual case will determine whether a specific method will be suitable or not. The practical distribution of the planner's estate after his/her death must be the primary objective and the saving of estate duty should be just one of the factors to be kept in mind during the planning process. Some of the methods in which estate duty can be saved are mentioned hereunder.

Ways to limit growth in the estate :

  • Sales of growth assets
  • Donations - by making use of the provisions of section 56(2)(b) of the Income Tax Act;
  • By transfer of growth assets to an inter vivos trust by sale of donation;
  • By the creation of a company and thereafter selling the growth assets to the company; and
  • By swopping growth assets for assets of equal value which increase in value at a slower rate.

Note : When advising a client on any of the above, the full implication of any recommendation needs to be considered.

Contact us for detailed planning

Will Planning

Recent Legislative :

Estate duty exemption increased to R3 500 000-00.

Effect of the Capital Gains Tax on insurance.

Wills function as one of the most common vehicles in estate planning and its importance cannot be overstated. The future of everything you've worked for during your lifetime depends on correctly planning your will, even more importantly, it is vital in ensuring the sustained financial well being of your dependents after your death. Incorrect planning leaves your estate vulnerable to estate duty, income tax, VAT and capital gains tax.

Legally, you are free to draw up your own will without any assistance or certification. Note however, that a will has to comply with certain legal requirements otherwise it will be regarded as invalid. Some of the legal requirements tend to be rather complex, therefore one should preferably seek advice from - and have your will drawn up by a professional consultant with experience of wills.

Countless individuals have suffered major losses due to the absence or incorrect use of words during the drafting of their wills. Any error in your will can result in severe financial damage to your dependents.

South Cape Financial Services offer expert advise, providing you with all the information you need to draft a will that fits your unique needs. We will also assist you in expressing your wishes in clear, unambiguous terms to avoid any misinterpretation and ensure that your will complies with all legal requirements.

What happens if a person dies without a will?

In the following cases your assets will be divided according to the Intestate Succession Act

nr. 81 of 1987:

• If you die without a will
• If there are no heirs stipulated in your will
• If your will is invalid (eg. Unsigned, incorrectly signed and/or does not comply with all legal requirements)

The Intestate Succession Act is comprised of the following:

Intestate Succession :

A person dies intestate when he/she dies without leaving a valid will and a person dies partially intestate in the event that a portion of the will is invalid or cannot be carried out. A brief summary of the law of intestate succession is set out hereunder. Note that definition of spouse only includes spouses married in or out of community of property.

1. The surviving spouse :

1.1 No Descendants:

If the deceased dies leaving no descendants but only a surviving spouse, the surviving spouse will inherit the entire intestate estate.

1.2 Descendants :

If the deceased dies leaving descendants and a surviving spouse, the surviving spouse inherits the greater of :

1.2.1 a Child's share; or (A child's share is calculated by dividing the monetary value of the estate by a number equal to the number of children of the deceased who have survived him, or have died leaving descendants surviving him, plus one.)

1.2.2 such portion of the intestate estate as does not exceed in value the amount fixed from time to time by the Minster of Justice by notice in the Government Gazette. Descendants inherit the residue (if any) of the estate. The current amount fixed by the Minister is R125 000-00 (?)

Business Insurance

Business Contingency Plan :

A member/shareholder of a close corporation / company often has to sign surety as co-principal debtor or provide personal security for a loan taken out by the business. The member/shareholder can thus incur personal liability :

1. During his / her lifetime if the business cannot repay the loan ; or
2. On death or permanent disablement, if the business is then unable to repay the loan ; or
3. If no one can replace him / her as guarantor or no alternative security can be given.

A solution for this problem can be achieved through the business contingency plan.

Working of the plan:

The business insures the life of the member / shareholder who has signed surety or provided personal security for the loan effected by the business. The policy should preferably include disability cover and the amount of life and disability cover should be equal to the loan amount. The business pays the premiums and an agreement is entered into between the business and the member / shareholder in terms of which the business undertakes to apply the proceeds of the policy to the repayment of the loan(s) giving rise the personal guarantees given by the member / shareholder.

Income Tax Implications :

The policy can be either conforming or nonconforming in terms of s.11(w) of the Income Tax Act. If the policy is conforming premiums will be deductible, but the proceeds taxable in the hands of the business, and allowance would, therefore, have to be made for tax.

If the policy is nonconforming the premiums will not be deductible but the proceeds will be tax-free.

Estate Duty Implications :

The proceeds of the policy will form part of deemed property in the estate of the deceased unless the requirements of s.3(3)(a)(ii) of the Estate Duty Act are met, namely :

(i) The policy was not effected by or at the instance of the deceased; and
(ii) No premium on the policy was borne by the deceased; and
(iii) No amount due under the policy has been or will be paid to the estate of the deceased; and
(iv) No amount has been or will be paid to a relative of the deceased or a person wholly or partly dependent on him for maintenance, or to any family.

Buy-and-Sell Agreement :

For the purposes of this section, where the word 'member' is used, the words 'partner' and 'shareholder' will also be appropriate, depending on the type of entity involved. Likewise, the member's interest may be interchanged with 'share' or 'shares' as appropriate.

1. Definition :

A buy-and-sell agreement is an agreement between the members of a business entity, obligating themselves to sell on their deaths (or disability) their interest to the survivors and likewise obligating the survivors to purchase the deceased member's interest.

2. The elements of a buy-and-sell agreement :

A buy-and-sell agreement usually comprises the following :

(a) An undertaking by the co-owners that the survivors will purchase the interest of the first-dying will sell, on death, his/her interesting the business to the survivors.

(b) An undertaking that the fist-dying will sell, on death, his/her interest in the business to the survivors.

(c)The purchase price or a method of determining the purchase price of a co-owner's interest in the business.

(d) Agreement as to the funding method of the buy-and-sell agreement, usually through life policies and the correct way of taking out the policies.

(e) Provision for the cession for value of policies held by the executor of the first-dying's estate on the lives of the surviving co-owners.

(f) An agreement as to the procedure to be followed in the event of all co-owners dying simultaneously of within 30 days of each other. Normally the estates of the owners of the policies will receive the full proceeds of the policies.

(g) Provision can also be made for co-owners to purchase a disabled co-owner's interests in the business.

Retirement Planning

- Information provided by Sanlam -

Retirement is inevitable, but it need not be another financial worry keeping you up at night. By starting to plan for your retirement as soon as possible you can ensure a secure and comfortable life after retirement.

One of the primary challenges is to ensure that you do not outlive your savings, especially considering the rising cost of medical care and inflation slowly gnawing away at the buying power of your money.

Retirement funding and Retirement income are the two most essential factors to consider when planning for your retirement. The former refers to accumulating sufficient capital and assets for retirement, while the latter concerns a steady income during your actual retirement years.

Why do you need to plan for your retirement? In order to ensure financial stability during your retirement years, you cannot simply use a savings account, as inflation will steadily wear away the buying power of your money. Inflation however, is not the only factor you need to consider carefully. It is essential that you expose your money to potential growth while at the same time carefully considering factors such as risk and sustainable withdrawal rates.

Managing all these factors simultaneously can be very technical and can needlessly expose your money to risk. Our advisors at South Cape Financial Services offers expert service and advise and will assist you in structuring a secure retirement plan that fits your specific needs. Retirement tips:

  • Start as soon as possible, do not wait until you can 'afford' it.
  • Take at least 20 % of your profit from the undertaking annually and invest it elsewhere.
  • Make use of the services of professional persons/institutions to manage your investments.
  • Use tax concessions optimally.
  • Do not rely on the selling price of your institution as your only retirement capital.
  • If your children take over your business from you, ensure that you have an alternative source of income.
  • If one of your children is going to take over the business from you when you retire :
    (1) identify your successor in good time, and
    (2) train your successor.
  • Plan for your retirement, even if you think that you can work until the day that you die - the state of your health could force you to retire.
  • Review your retirement plan and your investments regularly.

Health Care

Medical Aid :

Can u afford to be without Medical Aid ?

South Cape Financial Services offers you access to several comprehensive medical aids, which include the full spectrum of health care. We provide the following models through our preferential providers, namely primary care, new generation funds, as well as traditional funds.

We provide products to individuals and group workers.

Make use of South Cape Financial Services' well-informed advisors to help you to choose the right funds for your family and business.

Claim Statistics :

- Information given hereunder is acquired from Momentum. -

Death and accidental death claims :
Major causes of death claims :

  • 32% Cardiac
  • 20% Accidents
  • 15% Cancer
  • 19% Pulmonary
  • 10% Other
  • 4% Cerebrovascular

Disability and impairment claims :
Major causes of disability claims :

  • 34% Musculoskeletal
  • 17% Mental disorder
  • 15% Cardiac
  • 10% Cerebrovascular
  • 7% Other
  • 4% Cancer
  • 4% Pulmonary
  • 4% Metabolic & endocrine

Major causes of impairment claims :

  • 35% Musculoskeletal
  • 25% Cardiac
  • 20% Loss of hearing & sight
  • 10% Other
  • 5% Cancer
  • 5% Pulmonary

Critical illness claims :
Major causes of critical illness claims :

  • 45% Cancer
  • 40% Cardiac
  • 8% Other
  • 7% Cerebrovascular


- start to feed your purse : It just means that you must save more than your expenses. If you save 10 % of your income since your youth, you will have build a comfortable nest-egg for the later years.

- keep your purse close : Draw a budget for your personal, as well as business expenses and then make sure that you spend strictly according to that. This will prevent over-expenditure.

- go forth and multiply : Buy wisely with the investment of the money you have to invest. Use investment-professionals and stay away for quick-rich-schemes.

- take care of your purse : Make sure you understand investments- and business risks. Set precautionary measurements in place to eliminate risks, or at less minimize risks.

- your home must help your purse to grow : Rather buy a house, than rent a house. If you could not pay the house in cash, try to pay the loan amount back as soon as possible.

- ensure a income for the future : Ensure that you will receive an income if you are too old/unable to earn an income. Make sure that your dependants are provided with an income, should you die.


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