ESTATE PLANNING: PART 2

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YOUR WILL

In part one, we kicked off our series on estate planning by emphasising how important it is to get your affairs in order so that, amongst other things, you don’t leave a dog’s breakfast behind you on your demise. That we will all die one day is a scary thought for many, but an unfortunate inevitability.

The cornerstone to proper estate planning is your will. Your will is exactly that, the expression of your intentions and, again, it matters not whether you own a few assets or whether you have a substantial estate. The point is that it is your privilege and your prerogative to direct to whom your hard-earned assets should go on your death.

If you do not execute a will during your lifetime, upon your death you will have died intestate, and the law will then prescribe, amongst other things, upon whom your assets should devolve and who will be responsible for winding up your estate. Whilst the ‘pecking order’ prescribed by the laws governing intestacy may, coincidentally, accord with your wishes had you executed a will, this is very often not the case, and it doesn’t take a brain surgeon to realise that your assets may go to family members who you never would have benefitted had you taken the time to prepare and execute a will. You will also have the opportunity to decide whom you would like to appoint as your executor, rather than leave this important decision to others.

Hopefully, we will have now satisfied you that having a will is a no brainer, but how to draft one? Whilst you are not bound to use the services of professionals, we strongly suggest that you do so. In general, attorneys do not charge much to draft a will, and you can have the peace of mind of knowing that you will have a clear and unambiguous testament which accurately reflects your intentions. Banks will also offer to prepare your will for you for a fee, but it is often questionable whether the person drafting the will has sufficient skill to faithfully and clearly reflect your intentions and, importantly, to know what potential pitfalls to look out for and steer you away from.

An obvious question, apart from deciding whom you would like to benefit in your will, is whom you would like to appoint as your executor. Our advice is to avoid appointing as sole executor to your estate a family member or a friend, unless they are familiar with the procedures and provisions governing the winding up of estates. We say so for, amongst others, the following reasons:

• Invariably, he/she will seek the services of someone whom you have never met to wind up the estate under a power of attorney. Surely it would be comforting to know that you have left the proper winding up of your estate to someone you know and trust?

• If your nominated executor is a family member or a friend who is also a beneficiary, you could unwittingly be forcing them to wear two distinct and separate hats. Appointing an impartial executor is important, and we often advise our clients to consider making a joint appointment if this gives them peace of mind.

• On the issue of peace of mind, it is also important to note that attorneys carry compulsory fidelity insurance, which means that if, heaven forbid, they were to gallop off into the sunset with your assets, an insurer would step in. This cannot be said of banks, who invariably insist upon their appointment as executor, thereby locking your estate into that bank’s products, irrespective of how poorly they may be performing.

In essence, you should carefully consider the following as a precursor to drafting your will or, as we recommend, having a professional person draft your will for you:

1. Who you would like to benefit under your will. This may include leaving specific assets to individuals (bequests), such as family heirlooms, and identifying who you would otherwise like to inherit the residue of your estate. It is prudent to consider ‘back up’ beneficiaries if, for some reason, your chosen beneficiary/ies die before you.

2. Who you intend appointing as your executor.

3. If any beneficiaries are or are likely to be young, the establishment of a testamentary trust to be administered by your executor until they have reached an age stipulated by you as rendering them (hopefully) capable of making mature financial decisions.

4. The appointment of a guardian to your minor children. Guardians are not bound to accept their appointment, and it is best to canvas with whomever you propose appointing whether they would be willing to accept an appointment as such.

5. Whether you would like your organs donated or if you would prefer burial or cremation. Bear in mind, however, that since your will provisions may only come to light some days or even weeks after your death, this information is best shared with those close to you.

The professional could tease out any further information during the course of your consultation with him/her to ensure that no stone is left unturned.

In part 3, we will give you some very useful estate planning tips and tricks, and deal with the so-called ‘living will’, which is very different from your conventional will, but which records your intentions should you have lost all quality of life and, importantly, have become dependent upon artificial or mechanical means to sustain life.

Until then…

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