In the universe of financial planning, there are so many aspects to consider which often leads to oversights or missed opportunities which affects the effectiveness of the plan.
Here are some common areas which tend to be overlooked.
Not nominating a beneficiary on your pension fund benefits
The pension fund is regulated in such as way that the beneficiaries are decided upon by the trustees of the fund. They have the responsibility of ensuring that any dependents left behind at your death after considered as beneficiaries. You should ensure that the beneficiaries you wish to benefit from your fund are at least recorded on your fund to include them.
Not Including your RA contributions in your PAYE deductions
Retirement annuity contributions are deductible against your taxable earnings to certain limits. Instead of claiming at the end of the year on your tax return, you could have the contributions deducted monthly thereby improving your take-home pay every month instead of waiting for the refund at the end of the tax year.
Nominating a child as a beneficiary
Children under the age of 18 years are minors and do not have the legal capacity to enter into a contract or sign up for bank accounts, investments or other financial instruments. Nominating a child as a beneficiary therefore can create problems with the proceeds you wish them to benefit from. Policies with children as minors are generally taken over by their legal guardians. If there is no will which directs the proceeds to a trust the proceeds could end up in the Guardian Fund until the child reaches 18 years old.
Not signing your will correctly
A will needs to be signed absolutely correctly to be valid. Two witnesses who are not beneficiaries, guardians, or executors in the will are required to sign having actually seen you sign the will. They have to be of sound mind and capable of testifying in court being at least 14 years old. The will is also not valid if a witness has a spouse who is a beneficiary in the will. These and many other oversights impact the effectiveness of your financial plan.
Be very aware and seek advice if you are not sure.