The Living Relay

In looking back at photos of my life it quickly dawns on me that life is not a picture, it’s a movie. We get bigger, older, wiser, richer (or poorer!). We lose loved ones, and we gain friends. We have kids and grandkids, and our kids and grandkids lose parents and grandparents. This happens to everyone all over the world all the time. We live in constant momentum.

In the financial universe, there are two interesting sets of momentum. One is pretty obvious and in theory easy to manage; the other is less obvious and as a result, more difficult to get right.

Finding Financial Independence

The first is our own personal financial growth. Most people aspire to reach financial independence. That means having enough to enable us to work because we want to, not because we have to. To reach this point we undertake a journey of labour and savings illustrated by the graph below. The money we need to see us through our life at any given point in time is depicted by line A. The savings we have accumulated at any point in time to match that need is typically depicted by line B.

Becoming financially independent is determined by our aggregate spending throughout our life rather than our earnings. Both are needed, but it is the spending side that determines how hard we need to work and for how long. The higher our standard of living, the longer it takes to be financially independent and the more we need to reach that point. Wealth, therefore, is an entirely bespoke concept. The fact that we are living longer also means that we will have to either work for longer, work harder or spend less. Any of the three will do the trick, not much else.

This is pure maths and maths is not a guessing game. It just needs honest soul searching and a calculator.

Generational Momentum

The second is less obvious and concerns the interdependent nature of succeeding generations on each other. This is life’s relay. It’s a relay where the older generation runs towards the younger generation in a never-ending race. The baton refers to the assets each generation accumulates. Understanding the rules that govern this relay is crucial if one wants to hand over the baton successfully and maintain the momentum already generated. Here are the four simple rules:

Rule No. 1: It’s a Relay

The participants must understand they are in a relay. This means a high degree of communication and mutual acceptance that at some point in time the baton will pass on. This is especially important for family businesses – the sooner one addresses succession the better.

Rule no 2: let go and take

The giver must be willing to let go, and the receiver must be willing to accept. Clinging onto the baton or having a clenched fist does not make for a smooth handover. A control-obsessed person, for instance, can cause a scarcity mentality among heirs. This typically results in squandering through overindulgence or stubbornness – insistence that they don’t need anything and can do it on their own. Don’t live like you are poor when you are not. Wealth does not spoil kids; a lack of insight and understanding of wealth and the virtue of labour does. Accepting a baton means accepting the responsibility for the momentum as well.

Rule no 3: mentoring

The receiver must be trained to be in motion, ready for the handover to happen efficiently. The baton will either be dropped or the runner will overrun the receiver if the receiver stands still or is unprepared. To be able to carry inherited wealth, coaching and participation are needed. Simple things like having your children understand your monthly expenses and income and understanding the wealth that has been accumulated are steps in the right direction. Don’t dump wealth on people who do not have insight into it and don’t ever skip generations. Take responsibility for one generation at a time. Prepare them well and allow them to sort the next generation out.

Rule no 4: Don’t look back

The receiver must run forward and look towards the next generation. Issues of neglect or distant relationships can cause heirs to look back, which can negatively affect the passing of the baton. The sins of the father will last two generations, won’t they? You can’t change the past, but you can learn from it to create a better future.

In Summary…

We all constantly move along this financial continuum. One journey is mostly on our own and the other within the sphere of succeeding generations, but both are of equal importance. Understanding the rules of each journey will create a harmonious relationship with wealth within our own lifetime and a positive momentum for future generations.

Keep in mind that the baton contains much more than worldly goods and money. The rules governing generational momentum is true for everything we pass on to our heirs. Of all things, kindness is most probably the most valuable asset in that baton. Imagine a world where that happens as a rule rather than an exception.

Written by Louis Venter, Fiduciary Specialist at Carrick Consult.

Embracing Your Simplexity

Beautiful Lorelei

In life, very few things are simple. Simplicity fools us and taunts us as we stumble through a complex world. Simplicity is the irresistible Lorelei enchantingly singing to us from the shore across the river. The Lorelei that will look on uncompassionately as our boats crash against the rocks as we try to reach simplicity that lies on the other side of complexity.

Jeffrey Kluger beautifully illustrates how simplicity misleads us on so many fronts in our modern lives in his book Simplexity – the simple rules of a complex world – and invites us to consider a different approach – Simplexity.

I echo his plea from my area of specialisation.

The Modern Fallacy

There seems to be a growing chorus of financial and fiduciary service providers enchanting the masses to solve all their estate planning issues by simply doing a will. Don’t get me wrong, having a will is important and reviewing your will should be a two-yearly habit. Some wills are very simple and there is no need for massive estate planning to be done.

But this is where simplicity fools us.

Any will that is drafted for any person should be the result of some form of estate planning. Estate planning can only be done if you understand the data that underpins your planning and the legal environment in which you live, or in which the assets exist.

The will itself, is the final step of a planning process and the fact that the will is simple means that the complexity has been absorbed to find the simple answer or the simple will at the other end of complexity.

Data Matters

All estate planning processes should start with knowing what you own and who you owe. This is critical in understanding what you will leave behind and what is available to distribute to heirs. For example:

  • Debt is repaid before we even consider your bequests.
  • Debt could include loans being called up for you stood surety.
  • Obligations like estate duty, income tax, capital gains tax, administration costs and transfer duty are also payable before the heirs receive their inheritance.
  • Your marital obligations rank higher than the rights of your heirs.
  • Maintenance claims also trumps bequests.

Considering these data-points and collating the information will have greater value in the process of transferring your wealth than a “simple” will.

A will that does not consider these data points is worse than dying intestate (which means – without a will). In other words, a will that is badly drafted or drafted without considering the assets, liabilities and obligations is worse than not having one.

Planning Matters More

The will you sign is the final step of a planning process. In this planning process you (or your advisor) should not guess the law, nor guess the maths.

In our environment we collate all the data points, map them in our software and then do proper planning based on the data that have been provided. This allows us to simulate the death scenarios and put the will to the test. It also allows us to amend the plan as the data changes over time.

Peace of mind lies in the fact that someone has recorded the data points, knows where everything is and will be able to execute the wishes in the will easily and effectively. More than 90% of delays in the administration of a deceased estates are avoidable by collating the data and basing the planning on the data.

Execution Follows

The execution of the planning is only the third step in the process. This is where the will drafting comes in. If you find simplicity at this juncture – great. If not, we might have to absorb some more complexity.


A few things come to mind that require more planning:

  • Liquidity shortfalls in the estate. If there is not enough cash to pay what needs to be paid, assets that were planned to go to legatees might have to be sold. This is obviously a problem that requires a solution. The solution is not always taking our more life cover – its only one option and then the life cover should be taken out correctly.
  • Exposure to death taxes and taxes on death sometimes create the liquidity problem but could be avoided through the diligent use of trusts. Execution of the plan therefore might include creating a trust.
  • Assets located in other countries might require a deeper dive into the legal environment of those jurisdictions. In some cases, a second will might be required or the structure in which the asset is held might have to be changed.
  • Heirs who are minors or who live in other countries often requires special planning. For minors you need to have a clear understanding about their personal well being (who they will stay with) and their financial well-being (who will look after their money). The age and the whereabouts of heirs are important data points.

Adaptation Should be a Constant

The fact that things around us are in a constant state of change, is a complication. A plan or a will that works today, might not work in three years’ time. There are so many data points that change over time:

  • We buy assets and we sell assets.
  • We repay debts or make additional debts.
  • Heirs pass away and heirs are born.
  • Minor children become majors.
  • People become independent from us or become dependent on us.
  • We divorce and remarry or get married.
  • Tax law and taxation rates change.
  • We change advisors, or advisors move on to other businesses.

By pinning down the data-points, we will become aware of what is changing. By knowing what is changing we will be drawn into reviewing the plans. Reviewing the plans would result in updating that simple will to another simple will that now reads slightly differently.

Let’s rather find the simplicity at the other end of complexity together. Let’s embrace our simplexity and shield our ears from the enchantment of the simplicity industry.

Written by Louis Venter, Fiduciary Specialist at Carrick Consult

Carrick Consult is Not Guessing the Maths or the Law

“Failure to plan is planning to fail” is one of those often-repeated phrases one would find in many a financial planning article.  It is true of course, but if you put this dictum to the test in real life, it still is astounding to what extent people in general fail to plan.

The conundrum with estate planning is that even if you plan, the plan is never tested until after death – at which time – if the plan does not work out – there is nothing one can do.

That is simply not good enough either.


The Living L&D is an innovative product development that puts a stop to this madness.  Yes, you should plan, but at the same time the plan should be put to the test to ensure that the outcome one had in mind is realised.

Any plan can be tested through a simulation.  Financial planners “test” their plan through a simulation done on an Excel spreadsheet (or some other smart financial tool) to ensure that the growth and risk they propose on an investment achieves the desired investment outcome – one of which is the risk of longevity. 

Carrick Consult has adopted a similar simulation called the Living L&D to not only test any estate plan by simulating the administration process of a deceased estate, but also to manage the plan and the simulation over the lifetime of a client to ensure that the plan changes over time and that the simulation provides certainty that the plan works as it was intended to do.

Enrolling in the Living L&D programme achieves a number of objectives:

  • It provides a precise mathematical visual aid to a client to see for him – or herself the actual result of the estate planning.  One can see exactly who will get what, which assets will be sold and which retained, what the estate duty payable is and whether a liquidity issue exists.
  • It provides an opportunity for the advisor and the client to change the planning and see how the outcomes change.
  • It allows the estate planner to be constantly prepared for the eventuality of death as the greater part of the work that needs to be done after death is already in place.  By running the Living L&D simulation, the actual work required to be done after death is already done.
  • The avoidance of calculation errors and thought errors means that the time it takes to administer such an estate is cut in half.  Most delays in deceased estates could have been avoided through proper planning and proper planning cannot be done without running a simulation or testing the plan.

Guessing either maths or the law is simply crazy.

From this day on, no Carrick client will ever have to guess either.  At Carrick we simply don’t guess maths and we simply don’t guess the law.

To support this drive, Carrick Consult makes use of smart automation to collect the information from its clients and to import each client’s reply into its Living L&D process.  Remediation is done through a team of expert fiduciary advisors, all admitted attorneys, that work alongside the wealth advisors.

In order to encourage this change in estate planning behaviour, all costs incurred in accessing this solution are offset against any future executor’s fee and the level of adoption of the solutions will also give a client an automatic discount of between 30% and 50% of the executor’s fee.

Estate planning is a key building block of financial wellness and will never be done differently again.

Take control and ownership of your estate plan through the Carrick Consult Living L&D.  It’s the best gift you can leave your loved ones.