WILLS, TRUSTS AND ESTATE PLANNING
IS YOUR WILL UP TO DATE?
It is a well-known fact that more than 70% of people do not have a will or if they have one, the will is not updated or relevant anymore.
Make this year the year when you get your legal affairs in order ensuring you do not leave your family dealing with the consequences of your dereliction of duties.
Re-evaluate your existing will, the liquidity of your estate & estate-planning goals in general. Consider these SIX important tips when navigating the complex field of Deceased Estate Administration and preparing for the inevitable, re-evaluating your existing Will, the liquidity of your estate and estate planning goals in general.
NOMINATING AN EXECUTOR
Expertise In Offshore Assets – A Must –
You buy the latest tech, drive the newest and the best, your portfolio has been diversified with the latest offshore objectives – but your will is outdated and your executor is someone you briefly dealt with years ago. Something amiss? We definitely think so.
When drafting a will and nominating an executor, it’s more than just about fees and how to avoid paying estate duty – it’s about expertise. Does your executor keep up with estate planning information, changes to tax rules and trends on a global scale that is relevant to your estate? We expect this of financial advisors and other professionals like doctors; it should also be required of an Executor.
Investors often look for estate planning advice in terms of offshore assets and receive outdated, if not flat-out incorrect opinions regarding how the assets should be dealt with and what fees will in fact be deducted by the executor. The financial advice industry has changed over the last couple of years – pushed by a volatile local market and an unstable political environment.
Valuable and relevant estate planning has to be partnered with proper financial advice, local and foreign tax knowledge as well as an understanding of the estate administration laws of the jurisdictions in which the assets are held. Granted, it might not be possible for an executor to have basic knowledge on every invest-ment jurisdiction. Choose an executor wisely; question him/her on their knowledge of every specific asset in an estate and how it will be handled. If they cannot answer you comprehensively while you are still around to change that nomination in your will – they will most definitely struggle when the time comes to administer your estate. For example, you might have an investment held in Guernsey – does your executor know how to deal with this investment on your passing? Does your nominated executor know how to apply for a foreign grant of probate, or even if it’s necessary? If you are unsure, or if your Executor does not have any experience with offshore assets, it might be time to rethink that nomination. Offshore assets, if handled correctly can be transferred and enjoyed by your heirs quicker than local assets. Handled incorrectly, coupled with poor estate planning – ‘offshore’ might become a migraine inducing term for heirs and executors alike.
IF YOU DON’T HAVE A WILL?
If you should die without a will, then your estate will be handled according to the law of intestate succession. This law will determine who gets what from your estate according to the law of succession, and it may not be what you wanted.
You might have been living with a partner for twenty years however were not married. What about the example of being separated from your wife but not divorced at the time of your death? What if you had concerns about the special needs of your children? The list is almost endless!
Another factor to consider should you die intestate is that the Master of the Supreme Court takes over the management of your estate until it is wound up. Judging from personal experience this is a nightmare.
A will need not be a complex document and can be written on one page, signed in the presence of two witnesses.
Important to remember is that your executor (the person who actually winds up the estate) will need the original will in order to do this, so make sure that your original will is kept somewhere safe and that at least two people know where your original will is kept. A copy will not be accepted by the Master of the Supreme Court.
The appointment of an executor also need not be a complex issue. You can appoint your wife/husband as the executor with the power of assumption (the power to appoint a professional person to wind up the estate) or you can appoint someone you know well and trust, like a lawyer or investment advisor, to be the executor of your estate.
Like your will, you should also ensure that the executor of your estate is continuously updated.
A WILL SHOULD
Provide the following:
- Who you want to inherit the residue of your estate.
- Who you want to take charge of your affairs in the event of a dispute arising from a will.
- A will can make sure that your special bequests are taken care of.
- You can also create trusts in your will, for example a trust or trusts for your children.
- You can direct how your minor children’s affairs be managed until they reach majority.
- Determine your preferential funeral arrangement.
You can even choose to disinherit an heir, should you so wish.
Many people think that a will is a complex and difficult document to draw up.
Anyone can draw up a will. It is also possible to buy off-the-shelf wills from most stationary shops. These wills have been drawn up by attorneys and are in a standard format. If you have a complex estate with substantial assets then it is perhaps best to consult an attorney or a specialist who deals in these matters.
However, just remember that a beneficiary of the will cannot be a signatory to the will, nor can the executor. Many wills have been rejected on this basis, so take care that it is done correctly.
As your financial advisors we also have a duty to ensure that your wills are up to date and correctly reflect your last wishes.
During the course of the year we will be approaching ALL our clients asking for copies of their wills and if necessary, assisting with the drawing up of a new one and offering our services as executors of the estate.
This is part of the holistic service we wish to offer our clients and provides our clients with peace of mind that their affairs are in order.
OTHER IMPORTANT DOCUMENTS
When last did you check the beneficiary nomination on these documents?
While we’re on this issue of getting all your documents in order, maybe this new-found diligence should be extended to all your other important documents, like your investment and life policies.
In many instances we have come across people who have as their beneficiaries people who are not in their lives anymore, like ex-girlfriends, ex-husbands or ex-wives. It’s also very important to know where all these documents are.
Our suggestion is that you keep a file with the originals in a safe place and make copies for your investment advisors to keep (and also to make sure that they are filled in correctly).
More worryingly is the recent example of a large investment with one of the big assurance companies where the beneficiary nomination was changed to a complete stranger.This, in our view, was not an isolated instance as the same company is now busy with a major programme to ensure that the beneficiary nominations have not been tampered with!
At Brenthurst Wealth Management we encourage you to live for today but plan for tomorrow.