Most portfolios are built to grow. Very few are built to be handed over

Budget 2026 moved more personal tax thresholds than any budget in a decade. With the tax year closing in February, the bigger risk for most households is not the market. It is a financial structure nobody has ever read from beginning to end.

Most financial plans are tested in all the wrong places. They are tested on returns, on fees, on how a fund performed against its benchmark. Very few are ever tested on the one day they are guaranteed to face: the day the person who built them is no longer there.

When someone dies, SARS treats them as having sold everything they owned at market value on that date. Capital gains tax falls due on growth nobody ever cashed in. Estate duty applies at 20% on the dutiable estate above the R3.5 million abatement, and at 25% above R30 million. Executor’s fees can reach 3.5% of the gross estate, plus VAT – and gross means before debt, so a R4 million home carrying a R2 million bond still attracts a fee calculated on the full R4 million.

There is relief built into the system. Assets left to a surviving spouse are deductible, and an unused abatement passes to that spouse, giving a couple a combined R7 million. But every one of these obligations is settled in cash, and a family cannot pay SARS in bricks.

So the question we put to every portfolio is a blunt one. If this person died on Friday, where would the money come from, and how long would the family wait for it? A portfolio that answers that badly is not underperforming. It is unfinished.

The remedy is seldom a bigger premium. Retirement fund benefits and living annuities paid to nominated beneficiaries sit outside the estate, so they avoid executor’s fees and do not wait on the winding-up. A correctly ceded life policy does similar work. A will that names its executor and agrees the fee upfront spares a family a negotiation in the worst week of its life. None of it is expensive. All of it requires somebody to have looked.

Four purchases, not one plan

The reason so few people have looked lies in how cover is bought. Medical aid comes from one conversation, household insurance from another, life cover from a third and investments from a fourth – often years apart, and from different people. Nobody ever puts the four on one table.

When they are read together, the pattern barely varies: over-insured in one place, under-insured in another, and paying for both. The premium recovered by correcting that is usually what funds the investment side. It is not new money. It was already leaving the account every month. It was simply going somewhere that duplicates instead of somewhere that compounds.

In most cases the products themselves are fine. What is wrong is the way they sit together, and that stays invisible until the household is read as a single structure rather than a drawer of separate policies. Saying so is not always a comfortable conversation. It is also the one that earns the relationship.

It is also why no two plans should look alike. Two people of the same age, on the same income, in the same suburb will carry different dependants, different debt, different medical exposure and different ideas of what their money should have done by the time they stop working. Advice that treats them as one client will be right about the market and wrong about them.

A window that closes in February

This year, the cost of not looking is higher than usual. Budget 2026 lifted the cap on tax-deductible retirement fund contributions from R350 000 to R430 000 a year – its first move since 2016. The annual tax-free investment limit rose from R36 000 to R46 000. The annual capital gains exclusion went from R40 000 to R50 000, the primary residence exclusion from R2 million to R3 million, and the donations tax exemption from R100 000 to R150 000, a figure untouched since 2007. The capital gains exclusion in the year of death rose from R300 000 to R440 000.

Not one of these arrives in a bank account. Each has to be claimed, against a balance sheet somebody understands, before the tax year ends on 28 February, and most do not roll over. Too many households discover in March what they could have done the year before.

Using them well is a matter of placement rather than cleverness: which asset sits in which wrapper, in whose name, and in what order it is drawn down. A retirement contribution reduces taxable income at the marginal rate today. A tax-free investment does nothing for this year’s tax bill and a great deal for the twenty years after it. Discretionary savings do neither, and remain the most flexible money a household owns. The right balance between the three is entirely personal, and it shifts as income and age shift.

Retirement asks the same question in reverse

At the other end of a working life, the thresholds have moved too. A retirement interest of up to R360 000, up from R247 500, may now be taken entirely in cash, and the living annuity commutation threshold has risen from R125 000 to R150 000. Whether to take a lump sum, how much to draw, and in which order to spend taxable and tax-free money all have a right answer for a particular household. None of them has a right answer in general.

That is why the relationship outlasts the product. None of this is advanced mathematics. It is arithmetic applied to one life, and applied repeatedly, because that life keeps changing – a child arrives, a business is sold, a parent becomes a dependant, somebody moves offshore.

Which makes the adviser worth examining as closely as the portfolio. An adviser who only reviews the products they sold is reviewing their own book. The ones worth keeping look at everything, including what earns them nothing, and are prepared to take something away and explain exactly why. Anybody can add.

Wealth does not become personal through the products inside it, which are largely the same products available to everyone else. It becomes personal when somebody sits with the whole of it, for one household, and asks what it is for, who it protects, and for how long. Until then it is a collection of purchases. After that, it is a plan – built to grow, and built to be handed over.