SA’s Medium-Term Budget Policy Statement (MTBPS) painted a realistic picture of the rapid deterioration in key fiscal parameters in 2020.
MTBPS: not a game-changer in terms of rates, the rand or inflation, although execution risk remains high (especially in respect of public sector wages – remember 4-year agreement is due around budget time next year).
SA’s annual CPI eases to 3% in September
SA’s annual consumer inflation rate eased to 3% in September from 3.1% in August, arguably allowing for another 25 bps cut in interest rates before the end of the year.
SA reports another large trade surplus in September
In September, SA’s trade surplus was R33.5 billion, bringing the year-to-date surplus to R167.5 billion, compared with less than R0.5 billion in the same period last year.
SA’s headline PPI edges up in September
SA’s headline Producer Price Inflation (PPI) index lifted to 2.5% in September from 2.4% in August, driven mainly by food, beverage and tobacco price increases.
The next China 5-year plan included the word “safety” for the first time and reaffirmed technology and its development on home ground as being key to strategic national development
Taxlex is a multi-disciplined professional practise providing companies and their employees with a wide spectrum of services and solutions to address their Tax, Payroll, Labour, Human Resource, Accounting, Employee Benefits and Financial needs.
In the current bearish environment, many investors want to increase their exposure to offshore assets. However, many may already have a high percentage offshore without realising it.
Currently some 59% of the earnings on the FTSE/JSE All Share Index come from outside South Africa, while the local Listed Property Index has 31% of company earnings sourced from offshore. The average SA multi-asset “Balanced” unit trust’s offshore exposure, where many investors have placed their retirement funds, is over 50%. These are relatively high weightings, and offer important diversification benefits for all investors.
While each individual investor has their own goals, and therefore the appropriate amount of offshore exposure will be different for everyone, it makes sense to evaluate how much you currently have and how much you ultimately need in light of those goals. It would be value-destructive to rush offshore now and put all of your funds offshore in an emotional reaction to the gloomy views in the local market.
Chief Client and Distribution Officer
Choosing a guardian for your children is a huge decision to make and takes careful consideration.
If you have minor children, it is always advisable to nominate a guardian in your will who will love and care for your children if you are no longer around. Choosing a guardian for your children is a huge decision to make and takes careful consideration.
Let’s have a closer look at the role and responsibility of a legal guardian.
What is a legal guardian?
A legal guardian is a person that you nominate in your will to take over the care of your child in the event that you pass away. Where you are married and your child has two natural guardians (i.e. you and your spouse), your legal guardian would only assume responsibility when both you and your spouse pass simultaneously. If you are the sole guardian of your child, the legal guardian that you appoint would assume responsibility in the event of your death. As a parent of a minor child, the Children’s Act makes provision for you to nominate a legal guardian in your will although it is important to remember that the nominated guardian must expressly accept the position if and when the time arises. Upon being appointed, a guardian is vested with the care of the child and acquires full parental responsibilities and rights upon acceptance of the appointment.
How does it differ from a godparent?
A guardian and a godparent perform completely different roles. While a guardian is a legal appointment in terms of the Children’s Act which comes with long-term responsibilities, a godparent has no legal standing and is generally considered to fulfil a spiritual role in the child’s life. That said, you are able to appoint your child’s godparent as their legal guardian in terms of your will.
Who can be appointed as a legal guardian?
A legal guardian of a child should be a fit and proper person, responsible, and a trusted friend or family member. The person you appoint should be someone you trust to effectively step into your shoes and take over the parenting of your child in every aspect. It is important to give careful consideration as to who would be best to care for your child, and who you can rely on to create a loving and holistic environment that is conducive to the child’s best interests. When choosing a guardian, give thought to their cultural background, value system, religious beliefs, where they live, as well as their financial stability, as you will ideally want to nominate someone with a common set of morals and principles, and who is financially sound.
Can you appoint more than one guardian?
You may appoint two or more legal guardians in your will, although this can give rise to complications if the nominated guardians do not live together. Ideally, nominate a guardian in your will and then consider appointing an alternative guardian in case the nominated guardian passes away. Bear in mind that circumstances and relationships change over time, so be sure to review your will regularly to determine whether your nominated guardian is still the person you would want to care for your child.
Is a legal guardian remunerated for administering the minor’s estate?
Yes, a legal guardian is entitled to be paid for administering your child’s estate. You can set out the details of such remuneration in your will; alternatively, the guardian can be paid in accordance with the tariff set by the Master of the High Court.
What duties does a legal guardian perform?
The legal guardian takes over full parental rights and responsibilities of your child. The guardian must administer any property inherited by your minor child until they reach age 18, bearing in mind that you may stipulate a later age of maturity in terms of your will. The legal guardian will make all decisions regarding your child including lodging, schooling, extra-mural activities, pets, travel and vocational guidance. The guardian is also responsible for assisting or representing the minor child in administrative, contractual and/or legal matters until they reach maturity.
Does a legal guardian have financial control over the child’s inheritance?
If you have not set up a testamentary trust in your will, all funds bequeathed to your child will be payable to the guardian where you will expressly state that they can manage the funds on behalf of your minor child and where adequate security is provided. If your will is silent on this matter, any funds bequeathed to your child will need to be paid over to the Guardian’s Fund and will then be managed by the state. However, no guardian can sell or mortgage any immovable property belonging to the minor unless permission has been granted by the High Court, keeping in mind that the court will also act in the best interests of the child. Ideally, you will should make provision for a testamentary trust which comes into effect in the event of your death. All assets intended for your minor child should be bequeathed to the trust where they will remain in safe-keeping and be managed by the trustees nominated in your will.
Can the guardian also be a trustee?
Yes, you are able to appoint your child’s guardian as a trustee to the testamentary trust who will then be in a position to directly represent your child at trust meetings. In addition to the guardian, you may want to consider appointing a close friend or confidante as well as an independent, professional trustee, with three trustees being the optimal number for practical purposes. Keep in mind that one of the trustees’ most important functions is to manage and invest the trust assets in your child’s best interests, so be sure to appoint trustees who have sound financial acumen.
Will my child have any say?
Yes, the legislation makes it clear that the child’s views must be taken into account by the guardian depending on the age, maturity and stage of development of the child. While there is no set age at which a child can start making their own decisions, as they get older and more mature their wishes should be taken into account.
What happens if no guardian is appointed?
It is important to remember that the high court is the upper guardian of all children. If you do not appoint a guardian for your minor child in your will, a family member or friend would need to apply to the court to be appointed as the child’s guardian. This is a huge emotional and financial burden to place on one’s surviving family and friends, not to mention the minor child.
Will the guardian have enough money to care for my child?
Ensuring that your child is adequately provided for is your responsibility and this exercise should be undertaken in the financial planning process. It is unfair to nominate someone to the role of guardian without ensuring that there is sufficient liquidity in your estate to provide for your child until they reach at least age 18. Bear in mind that the person you nominate as guardian in your will must expressly accept the position. If you have not made adequate financial provision for your child and your guardian is not in a financial position to assume guardianship, they may refuse to accept the nomination. When making plans to provide for your child if you are no longer around, consider taking out a life policy with sufficient cover to provide for your child’s future needs, including their living expenses and education.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact Taxlex for specific and detailed advice.
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