Xmas cheer as SARB cuts rates
Pretoria - The South African Reserve Bank's monetary policy committee has cut the key repo rate by 50 basis points, bringing it down to 11.5%, with the prime lending rate dropping to 15%.
This is the first time in 14 meetings that the rate has been cut since June 2006; at the other meetings, the rate was thrice kept on hold, and raised by 50 basis points each time in the rest.
The decision was in line with the consensus forecast by economists surveyed by I-Net Bridge. Of the 16 economists polled, nine expected a 50 basis point reduction, while two are expected a cut of 100 basis points. Five economists spoken to expected rates to remain unchanged.
South African Reserve Bank Governor Tito Mboweni said in late November that the inflation outlook had improved and it was hoped that an easing since August was the start of a consistent downward trend.
The targeted CPIX inflation slowed to 12.4% year-on-year from 13.0% and factory gate inflation fell to 14.5% from 16.0% previously.
Inflation broke through the Reserve Bank's 3%-6% target range for CPIX - the consumer inflation rate excluding mortgage interest rates - in April 2007. Driven by high food, fuel and electricity prices, inflation hit a peak of 13.6% in August. Economists expect that CPIX inflation will return within its target range in the latter half of 2009.
12 December 2008
05 December 2008
Estate Planning - Part 2
Two more questions on Estate planning
Will my spouse have cash available?
Many people overlook the fact that their surviving spouse will need cash to live on after they die while the estate is being wound up and this can lead to serious problems and inconveniences. Once your bank gets wind of the fact that you are dead it will freeze your account. It takes time to finalize most insurance payouts. This is especially so when the circumstances surrounding a death need to be investigated. You should provide cash for your surviving spouse that will support him or her for two to three months. For this purpose, the spouse should have his or her own bank account. Alternatively, the surviving spouse should have a unit trust investment in his or her name that can be sold quickly to realise cash when this is needed.
How does my marriage affect my will?
If you are married in community of property, all assets acquired before the marriage and during the marriage belong to both of you equally. In this case, when you draw up a will, you can generally only deal with half the assets of the marriage. If you are married out of community of property, any assets you acquired before your marriage remain your own, but assets acquired during the marriage belong to you both – unless you specifically state that assets acquired during the marriage belong to the spouse who acquired them. If you leave assets to your children, the law includes:
· Children born of your marriage or any previous marriage;
· Children born out of marriage; and
· Legally adopted children.
Will my spouse have cash available?
Many people overlook the fact that their surviving spouse will need cash to live on after they die while the estate is being wound up and this can lead to serious problems and inconveniences. Once your bank gets wind of the fact that you are dead it will freeze your account. It takes time to finalize most insurance payouts. This is especially so when the circumstances surrounding a death need to be investigated. You should provide cash for your surviving spouse that will support him or her for two to three months. For this purpose, the spouse should have his or her own bank account. Alternatively, the surviving spouse should have a unit trust investment in his or her name that can be sold quickly to realise cash when this is needed.
How does my marriage affect my will?
If you are married in community of property, all assets acquired before the marriage and during the marriage belong to both of you equally. In this case, when you draw up a will, you can generally only deal with half the assets of the marriage. If you are married out of community of property, any assets you acquired before your marriage remain your own, but assets acquired during the marriage belong to you both – unless you specifically state that assets acquired during the marriage belong to the spouse who acquired them. If you leave assets to your children, the law includes:
· Children born of your marriage or any previous marriage;
· Children born out of marriage; and
· Legally adopted children.
01 December 2008
Last Will & Testament
Estate planning
We all plan for retirement, although we are not assured of living long enough to reach retirement. But, despite knowing that we are all going to die, many people still fail to draw up an estate plan.
Another reason you need an estate plan is to ensure that your estate has the most beneficial tax structure. Although it is not possible for your estate to pay no tax, you can minimise the tax your estate pays.
Who receives your life policy and retirement fund benefits?
You need to decide whom you want to benefit from your assets or for whom you wish to provide financially. You should be clear on how you want your beneficiaries to benefit - do you want them to inherit an asset, an income or cash?
Your will cannot dictate who inherits the benefits from your life assurance policy. Many people think they can revoke the beneficiaries they have nominated on a life assurance policy by simply nominating other beneficiaries in their will. However, this is not the case. The life assurer has a contractual relationship with you, the policyholder, and will pay out the benefits to the beneficiaries nominated in your assurance contract, regardless of whether your will states otherwise.
If you want to change your life policy beneficiaries, you should do this directly with your life assurance company.
Check list for ensuring your will is in order:
It requires expertise to draft a will, and you should not even consider buying a standard will from a stationery shop. If you die without a will, your assets will be distributed in terms of the law of intestate succession. This will also happen if your will is invalid. You should check the following to make sure your will is in order:
· Is your will valid? Check that your will is signed and witnessed in all the correct places. Also check that your witnesses are valid. A valid witness is someone who is over the age of 14 and not at all benefiting from your will.
· Is your will current? You may find that your circumstances and/or your wishes have changed since you drafted your will. Legislation that affects your estate plan may have changed since you drafted your will, and these changes need to be taken into account. You should review your will and your estate plan annually. Your planner should also review your will after any changes to legislation or if your personal circumstances change, such as through marriage, the birth of a child or divorce.
· Where is your original will? You may know where your original will is kept, but you need to tell someone close to you so that when you die, your family can find your original will.If your original will cannot be found, a High Court order will have to be obtained before the Master of the Court can accept a copy of your will. This will lead to additional costs and delays in finalising your estate.
· Have you appointed a guardian for your minor child (under 18 years), and do you want that guardian to manage money on behalf of your child? If you want the guardian to receive and manage funds on behalf of your child, you must stipulate as much to prevent money or proceeds being paid into the Guardian's Fund, which is managed by the Master of the High Court.If this happens, every time the guardian wants money for your child's expenses, he or she will have to apply to the court for the money.
We all plan for retirement, although we are not assured of living long enough to reach retirement. But, despite knowing that we are all going to die, many people still fail to draw up an estate plan.
Another reason you need an estate plan is to ensure that your estate has the most beneficial tax structure. Although it is not possible for your estate to pay no tax, you can minimise the tax your estate pays.
Who receives your life policy and retirement fund benefits?
You need to decide whom you want to benefit from your assets or for whom you wish to provide financially. You should be clear on how you want your beneficiaries to benefit - do you want them to inherit an asset, an income or cash?
Your will cannot dictate who inherits the benefits from your life assurance policy. Many people think they can revoke the beneficiaries they have nominated on a life assurance policy by simply nominating other beneficiaries in their will. However, this is not the case. The life assurer has a contractual relationship with you, the policyholder, and will pay out the benefits to the beneficiaries nominated in your assurance contract, regardless of whether your will states otherwise.
If you want to change your life policy beneficiaries, you should do this directly with your life assurance company.
Check list for ensuring your will is in order:
It requires expertise to draft a will, and you should not even consider buying a standard will from a stationery shop. If you die without a will, your assets will be distributed in terms of the law of intestate succession. This will also happen if your will is invalid. You should check the following to make sure your will is in order:
· Is your will valid? Check that your will is signed and witnessed in all the correct places. Also check that your witnesses are valid. A valid witness is someone who is over the age of 14 and not at all benefiting from your will.
· Is your will current? You may find that your circumstances and/or your wishes have changed since you drafted your will. Legislation that affects your estate plan may have changed since you drafted your will, and these changes need to be taken into account. You should review your will and your estate plan annually. Your planner should also review your will after any changes to legislation or if your personal circumstances change, such as through marriage, the birth of a child or divorce.
· Where is your original will? You may know where your original will is kept, but you need to tell someone close to you so that when you die, your family can find your original will.If your original will cannot be found, a High Court order will have to be obtained before the Master of the Court can accept a copy of your will. This will lead to additional costs and delays in finalising your estate.
· Have you appointed a guardian for your minor child (under 18 years), and do you want that guardian to manage money on behalf of your child? If you want the guardian to receive and manage funds on behalf of your child, you must stipulate as much to prevent money or proceeds being paid into the Guardian's Fund, which is managed by the Master of the High Court.If this happens, every time the guardian wants money for your child's expenses, he or she will have to apply to the court for the money.
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