Let us explore the critical topic of Estate Planning, with a special focus on Wills, Intestacy, and Trusts.
• Wills: Protecting Your Wishes
A will is a crucial legal document that allows you to clearly express how you want your assets, money, property, and personal belongings to be distributed after your death. It gives you the opportunity to: name an executor who will be responsible for ensuring your wishes are carried out, appoint guardians for minor children or dependants, and leave specific instructions for other personal matters, such as funeral arrangements.
By having a will, you ensure that your estate is managed according to your preferences, minimizing the risk of disputes and complications. Without one, your estate may be distributed according to the rigid laws of intestacy, which may not align with your personal wishes.
• Intestacy: The Consequences of Not Having a Will
If someone passes away without a valid will, they are said to die “intestate.” When this happens, the estate (assets, money, property, and personal belongings) is distributed based on the laws of intestacy, which vary depending on the country or jurisdiction.
Unfortunately, these laws are rigid, offering no flexibility or discretion for those managing the estate. In many cases, the distribution may not align with what the deceased would have wanted, potentially causing disputes among family members. By understanding how intestacy works, it becomes clearer why having a valid will in place is so essential - it prevents unintended outcomes, ensuring your estate benefits the people you truly care about.
• Trusts: Flexibility and Control Across Generations
A trust is a legal arrangement in which a trustee manages assets on behalf of beneficiaries. Trusts offer several key advantages, particularly for those who want to maintain control over their wealth across generations:
• Asset protection: Trusts can shield assets from creditors or legal challenges. • Tax efficiency: Trusts can facilitate more tax-efficient wealth transfers and minimize inheritance taxes. • Wealth management: Trusts allow you to set specific conditions for how and when beneficiaries will receive their inheritance.
Trusts can be established during your lifetime (living trusts) or upon your death (testamentary trusts), giving you greater control over how your assets are managed and distributed long after you are gone.
Most of us want to ensure that our loved ones are cared for when we’re no longer here. The first step in achieving this is to create a will, which guarantees that your estate is passed on to those you intend to benefit. Without one, the laws of intestacy could lead to unintended consequences, such as excluding or including individuals against your wishes. For those seeking to reduce inheritance taxes or retain control over how their wealth is passed on, trusts are a vital tool in estate planning.
About Nike
Oyenike Adetoye (aka Nike) is an impactful speaker, author and personal finance expert. A Chartered Management Accountant by profession. Nike is the founder and CEO of LifTED Finance, a private financial firm that educates, coaches and supports people on their journey through financial fitness and wealth management.