We hope you are all making the best of the unprecedented situation we all find ourselves in. Locking down isn’t easy for individuals, businesses or the economy – but the alternative doesn’t bear thinking of. Besides, being forced to stay at home has given many of us that most precious of all commodities: time.
At Sentinel we’ve used the time to, among other things, put the finishing touches on a new company website. And about time, too. Things move so quickly at Sentinel that our website has generally been a few years behind what’s really happening on the ground.
But instead of simply sending you the link to the new website we thought we’d take the opportunity to tell you a bit about the evolution of our brand story, and your role in this evolution. We’re not doing this to indulge ourselves, but rather to illustrate to you how Sentinel’s evolution has always been informed by peering beyond the horizon to ensure we’re ready to protect our families from enemies yet unseen. We didn’t call ourselves Sentinel by accident.
noun: a soldier or guard whose job is to stand and keep watch.
When we founded Sentinel 21 years ago, we were in the business of winding up deceased estates. Realizing almost immediately that winding up estates is not a pro-active endeavour as well as being a tough and not always profitable business, we diversified into setting up and managing trusts (for the last forty years prior to this decision it seemed that the ONLY advice to South Africans was that they NEEDED trusts).
It soon become apparent – from our vantage point as your Sentinel – that, due to legislation changes, ever-increasing compliance, and the added complication of global family relationships that some historic structures would need to be adapted. This set us apart from our competitors who continued to sell trusts despite knowing their many pitfalls. At Sentinel we weren’t afraid to make decisions that would cost us as a firm both time and money but which would undoubtedly benefit you, our clients. Over the years – both vanilla local and offshore structures have become less and less beneficial purely for taxation purposes – but in the holistic correct construct, it can, remain a valuable instrument for many other reasons, including tax. It’s in the how that makes all the difference.
But this isn’t the only way we’ve been ahead of the competition. Even when we were still “selling” trusts, we only did so as a part of a bespoke Legacy Plan. And, having assisted in the creation of this Legacy Plan, we set ourselves apart by focusing on the regular review and maintenance of the Plan. Our insistence on holdingregular meetings, on taking minutes and on ensuring that the Plan is fit for purpose may border on the obsessive – but we know that not doing these things will cost our families a lot of money in the long run.
Sentinel was born at a time when South Africa was rapidly reintegrating with the rest of the world. It is now not uncommon for our families to have both investments and heirs in multiple foreign jurisdictions. But still most South Africans – and many financial advisers – only take South African law into account when making investment decisions. We could give hundreds of examples, but here are two of the most common ones:
- Mr Smith owns a holiday home in Portugal and a farm in the Karoo. In close consultation with his kids he decides to leave the Portugal home to his daughter who lives in London and the Karoo farm to his son, who has already taken over the day-to-day running of the farm. This all makes perfect sense under South African law but does not take into account Portuguese succession law which dictates that an asset must be shared among all heirs. When Mr Smith dies, his daughter is suddenly at the mercy of her brother.
- Mr Smith worked for Investec in London. He exercised his share options and owns Investec PLC shares listed on the LSE. He returned to South Africa and eventually passed on here. Before his U.K. estate can be divided between his children, it must first suffer the probate process in the United Kingdom and an Inheritance Tax charge of 40% on these assets. If Mr Smith had simply bought Investec Ltd on the JSE, then the costly probate process and Inheritance Taxes would have been avoided.
With a bit of foresight, both situations could easily have been planned for. But South Africans are making these and many other legacy planning mistakes every day of the week. Sentinel began offering a holistic suite of services to cater for our families increasingly complex financial affairs around ten years ago. But – scarily – we’ve still got hardly any competition in this regard.
At Sentinel we’ve gone to great lengths to assemble a top-notch team of Super-Specialists to cater for the myriad situations our families find themselves in. As Management we are amazed by the calibre of our colleagues – they teach us new things every single day – and we hope you are too.
It’s no accident that a huge portion of our new website celebrates our super-talented colleagues. The site also touches on the many ways we stand sentinel over our every aspect of the Legacy Plans that we have crafted for our families, by anticipating legislation changes before they happen, by taking into account the differences between different countries’ legal and financial systems, and by having the difficult conversations that most families (and advisers!) tend to avoid having until it’s too late.
But the primary purpose of our new website is educational. Ultimately, we want all South Africans to appreciate that simply having a will does not constitute an estate plan. And, taking this one step further, we want South Africans to understand that even an estate plan doesn’t come close to a carefully constructed legacy plan.
We understand that we’re preaching to the converted with this email. But we thought you’d be reassured to know that when it comes to your financial affairs, we’ve always been perched on the highest koppie, scanning the horizon for potential problems. And regardless of what Covid-19(20+21) throws at us, we’re not leaving that koppie.
We hope you like our new website. Please do send the link to friends, colleagues or family who you think may benefit from our services. We can’t do anything to stop the spread of Covid-19. But we feel a huge responsibility to reduce its impact on South African families who are trying to preserve their legacies in these unprecedented times.
The Sentinel Management Team