People who are successful in life often fail to spend sufficient time on planning and structuring their estate, thus leaving behind a potential headache for their dependents. This often leads to conflicts amongst siblings and leaves a bitter taste in the mouth concerning their parents’ lack of foresight.
The Importance of Writing a Will
The ‘will’ is a legally enforceable declaration of how a person wishes his property and assets to be distributed after death. By writing one, a guardian for the children can be appointed, as well as an executor of the estate responsible for handling matters usually supervised by the probate court.
Without a will an estate passes ‘probate’ according to Succession Law, where the legal court will take it into their hands to conclude all your legal and financial matters after your death—with further complications if there are assets in several countries. The problem for many expats is they find this out too late.
Probate, by definition, refers to the general administering of a deceased person’s will, or the estate of a deceased person without a will. The court appoints either an ‘executor’ named in the will or an ‘administrator’ if there is no will.
The process involves collecting the assets of the deceased person, paying any liabilities remaining on the estate, and finally distributing the assets of the estate to beneficiaries named in the will (or determined by Law if there is no will).
As long as the assets remain under probate, the beneficiaries of the assets have no entitlement or access to these assets; at least until the probate process is settled. The duration of this process and total costs incurred varies and are influenced by the complexity and structure of the estate.
Legacy Planning For Your Loved Ones
Legacy planning involves taking care of your partner and children, ensuring business continuity plus a tax efficient and guided hand-over of wealth for the benefit of dependents and possibly other chosen beneficiaries.
Family patriarchs might have a wide range of specific wishes to be included in the will, for example:
- I want my spouse, children, grandchildren to be taken care of financially
- I want to protect my inheritance from creditors, tax issues, mismanagement, squandering and other risks of loss
- I would like to prevent family conflicts over my estate
- I only want my children to access my inheritance (or funds) in a measured way so they learn to be responsible
- I want to ensure that my children, while still under-aged, will be taken care of by the legal guardian of my choice
- I’d like to have a tax efficient distribution of my estate with minimal impact from estate duties and other taxes
- I want to appoint someone to manage the full and proper execution of my final wishes
- I want to make a covenant in case I pass on after my wife dies, with specifics on how my wishes are to be handled (since it’s a wholly different situation from passing on first, with my wife surviving me)
Do You See Why Legacy Planning Is Crucial?
Passing on without a will is termed ‘intestate’ and as such zero specifics will guide the orderly and proper distribution of your estate other than what is arranged by your country’s succession laws. Surely, this is not the desired outcome for your family, hence writing a will makes perfect sense! And should be the first thing on your mind where loved ones are concerned.
Cover image by Luis Llerena