RULE 92: You Really, Really Can’t Take It With You

Mrs. Kikelomo Ibironke Ajibade, CEO, Ann Marie Wine World, Lagos

I know there’s a
saying – whoever has the most toys at the end wins. But you really can’t take
it with you and you can’t buy anything with it when you go – no tickets into
heaven, no indulgences, and no get-out-of-hell free cards. When you go, you go
alone and with nothing, just as you came in. So, all that effort, in a way, is
wasted. Unless of course you did something useful with it when you had it and
had the ability to do it. Left drooling in some old folks’ home isn’t the time
or place to start being philanthropic is it?

Not getting rid
of it is known as wealth bondage – being tied so tightly to your money
that you really do try to take it with you – and that really is kinky. Sure you
can leave it to your kids but you should have given most of it away long before
you pop your clogs or you’ll be leaving a massive tax liability for someone down
the line. 

“Not getting rid of it is known as wealth bondage – being tied so
tightly to your money that you really do try to take it with you – and that
really is kinky. Sure you can leave it to your kids but you should have given
most of it away long before you pop your clogs”

Advert
Whatever you decide
to do, do take the proper advice – nothing grates so much as a poorly
thought-out will and lots of taxes after you’ve gone. You can of course insure
against tax liabilities after you’ve gone. You have to calculate what you think
your tax liability is likely to be and then set up a whole-of-life insurance
policy to cover it.
But the policy
has to be written into a trust to ensure the proceeds from the policy aren’t
included with your estate – but for heaven’s sake be careful on placing
anything’ in trust because if you use the wrong one you can make things even
worse – also legislation can change, for example the latest budget and changes
to taxation of interest in possession trusts.
Gosh, I’m not a financial adviser (except on a
behavioral level- you need somebody else for the nitty-gritty-which-investment-
is-best-for-me detail) but it seems to make sense to have all this tied up
before you go. And of course you can leave the lot to your spouse and then they
don’t have to pay death duties but by golly their tax bill is going to be high
when they go, so you are only delaying rather than off-setting. You can
establish a trust to ensure that both husband and wife’s nil rate bands are
fully utilized – but again be very careful using a trust. I was reading about
the Dalai Lama’s wealth the other
day. He gets paid the equivalent of around 38p
a day expenses, owns two robes – one on and one in the wash – and his only
indulgence is a new watchstrap every now and again (I did wonder if he bought
leather ones). And yet he is the head of an entire country – albeit one in
exile. Now that is cool in my book.
From The Book; The Rules of Wealth by
Richard Templar
(Read Rule 93
of Rule of Wealth tomorrow on Asabeafrika)

Read-to-Wealth Series








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