What is Estate Planning?

Estate Planning is a means by which an individual organizes his financial affairs using various tools to ensure that his dependents are properly catered for even after his demise.

Who needs Estate Planning?

Everyone does! No matter your Net worth, whether your estate is large or small, it is important to have a basic estate plan in place. Such a plan ensures that your family’s present and future comfort and financial goals are met at all times.

What are the tools of Estate Planning?

A: The tools of Estate Planning include: Living Trusts, Wills & Personal Representatives/ Executorship

What is Trust?

Trust simply is a legal device allowing title, and possession of property/assets to be held, used and/or managed by one person, the Trustee for the benefit of one or more persons, the Beneficiaries.

Trust is one of the most flexible legal mechanisms available and useful for any purpose which is not illegal or against public policy. Trust is divided into Private Trust and Public Trust. Private Trust is also referred to as Living Trust.

What is a Living Trust?

A living trust is an instrument by which an owner of property, Settlor, during his life time, transfers his assets to a third party, called a Trustee, for the benefit of some named beneficiary. A Living trust provides lifetime and after-death property management. The Settlor during his lifetime can also be a beneficiary of the Trust.

Why do people need Trusts?

People need trusts to take care of their loved ones both while alive and at death, so their wishes can be accomplished. Trust is also used to preserve assets from spendthrifts for successive generation and to keep assets in the family lineage.

What is a Will?

A Will is a document by which a person called “A Testator” makes a disposition of his property to take effect after his death. It may also contain direction for the testator’s funeral and disposal of his remains or expression of personal feelings and social matters.

What are the essential features of a Will?

The major feature of a Will is that it does not take effect until the death of the Testator. Another salient feature of a will is the Disposition of property, thus if a Will does not dispose of properties, it is not a Will. It may, however contain non-dispositive provisions, like the appointment of executors, trustees or guardians for minors

What happens when one dies with a Will?

Claimants obtains Grant of Probate which may sometimes, be prolonged, especially if contested.

Do all assets have to go through Probate?

Yes, except those assets which are jointly owned which becomes routinely transferred to the surviving owner (e.g. a spouse). However, this will also be subject to Probate once the surviving spouse dies.

Why do my assets have to go to Probate?

To establish clear title/ownership to your assets after death. Before your assets can go to your loved ones, the Probate Court has to determine and settle your debts as well as any adverse claims, establish clear title to everything you own and then distribute the estate according to your Will.

What is Administration of Estates/Executorship?

This is the process of organizing, managing and or disposing of the property of a person who died “Intestate” (i.e. without a Will). It also involves the process of executing a Will where the deceased left a will before his/her death.

What happens when one dies “Intestate,”?

For individuals who die without a Will, the process is much more complicated and cumbersome before their dependents can have access to their investments.Claimants will be subject to a lengthy process of obtaining “Letters of Administration” which may be frustrating, expensive and time consuming. During this process, dependents may not have access to the assets, or they may fall into the wrong hands. The process is also public in nature which does not guarantee the privacy of information.

How do Living Trusts & Wills differ?

Once you set up a Living Trust, it kicks off legally and assets transferred under it are technically removed from your estate at time of death and therefore not accessible to other adverse claimants, creditors etc. It is not subject to Probate or Letters of Administration process, nor is it a Public document, openly advertised like a Will or Letter of Administration. Rather only the Beneficiaries are entitled to its details/contents.

What are the advantages of a Living Trust over a Will?

Some obvious advantages include the following:

  1. Living Trust Avoids Probate: One of the first benefits of a living trust is that it avoids probate. With a valid will, your estate will go through probate, the court process through which your assets are distributed according to your wishes by the executor.
    A living trust, on the other hand, does not go through probate, which often means a faster distribution of assets to your heirs in accordance to your stated wishes.
  2. A Living Trust Saves You Money: Assets such as stocks and bonds are transferred to the trust in the life time of the Settlor to avoid unnecessary taxes upon death.
    A living trust can save your estate money at the time of your death as the distribution of assets in the trust will not go through probate; note that court costs for probating your will are funded from your estate.

Our testamentary trust services would usually include the following:

  • Assets Collating and Compartmentalizing; at the instruction of a client, we compile the list of assets and liabilities and compartmentalize same to give a rounded value for the sharing and managing of the assets for an intended Will.
  • Drafting of the Will; we go beyond encouraging our client to plan their assets for after-demise and actually engage in rendering legal Draftsmanship and advice to client. A Will is a preferred option to Intestacy (i.e. without a Will) since it ensures that property devolves in line with the testator’s wishes. Having a Will also saves significant amounts of money in legal fees and eliminates the time-consuming process of obtaining Letters of Administration.
  • Updating of Will; Possession, wealth and even family may grow and increase at one point or shrink at another. We will help facilitate a review of our client’s Will at every significant change or Estate tax law shift. This can be done by a codicil or drawing up an entirely new Will.
  • Executorships; another important aspect of a Will that is often overlooked is the appointment of a good executor. While some testators appoint executor(s) who is also a named beneficiary thus creating a complex and sometime messy situation, the neutrality of the executor is a key component to a successful execution of a Will. A corporate Trustee like STL with the required professional expertise in ensuring effective and efficient implementation and disposal of the Will without favour or bias would offer a most reliable service as executor to carry out the intent and content of a testator’s Will.
  • Neutral and Unbiased; As a Corporate entity with no consanguinity, affiliation or interest, we are neutral and objective, hence rendering fair and unbiased professional services at all times. This is a sharp contrast to the norm where the Executors/Administrators are family members, relatives or friends who may have vested interest in the assets or beneficiaries of the deceased.
  • Ensuring coordination of other assets; we ensure that assets like life insurance proceeds, retirement accounts, property held in joint ownership and Investment schemes are adequately harnessed and included in the provisions of the Trust.
  • As a Corporate Trustee, we exist in perpetuity to carry out long-term aspects of Administration of Estate.
  • We tidy up all legal aspects and other administrative necessities on your behalf.
  • Peace of mind and the feeling of security in the fact that you are rest assured that a professional party is in place who is regulated and also bound by Law to carry out your wishes to the letter and treat the Trust assets in a prudent.
  • It affords the Estate services of sundry professionals in our establishment which individual natural person may not be able to possess together

Whilst it is most desirable to have a tidy financial plan for post-demise, we recognize the fact that many people die intestate and leave behind a lot of needless hardship for their dependents and loved ones. Hence, where a person dies intestate, our services include administering the estate for the benefit of the Dependents. We commence the process by obtaining Letters of Administration and ensure that the assets of the deceased are distributed amongst the rightful and lawful beneficiaries.

Why do I need a Living Trust?

Reasons include:

  • To have assets professionally managed and preserved for Beneficiaries.
  • To keep properties in the family, which you may specifically instruct must not be sold nor alienated.
  • To avoid legal battle over assets after your demise
  • To act in line with your specific wishes especially if you desire to utilize some of your funds to cater for the less privileged etc
  • To have a legacy that would outlive you
  • A Settlor/Trustee relationship is governed by Law, assets are protected and details strictly confidential.
  • Keeps your private affairs private
  • Make your assets subsist for generations under capable corporate management
  • Have a neutral and trustworthy corporate entity that helps manage key assets and ensure your beneficiaries are well catered for.
  • You can set and mandate educational standards to be attained by your children whether you are still around or not.
  • Prevent your assets from being enjoyed/abused by others to the detriment of your named beneficiaries.
  • To protect capital against effects of Beneficiaries’ bankruptcy or financial difficulties.
  • To remove assets from the reach of doubtful claimants and creditors.
  • To hold property for minors, who are not legally allowed to hold property.
  • To hold property for unborn children.
  • To enable a Beneficiary enjoy income without access to the capital e. g. to provide for a widow but not her husband/children from another marriage.
  • For various tax saving purposes
What does STL Trustees do with the Trust Assets?

The duties of STL Trustees are partly determined by law and partly included in the Trust Instrument. It would include:

  • Investing the trust assets for the benefit of the Beneficiaries.
  • Investing the Trust assets under Trustee’s control to ensure maximum returns or adequate returns.
  • Employing diligence in trust affairs as a prudent man of business dealing with his owns affairs would.
  • Securing the trust assets under their control.
  • Keeping proper Accounts/Records.
  • Avoiding conflict of interests.
  • Ensuring that payment is made to genuine Beneficiaries.
  • Maintaining Beneficiaries out of Trust Assets in line with the terms of the Trust Deed.
  • Exercising whatever discretion they are given in the Trust Deed.
  • Taking actions necessary to protect and preserve the Trust Assets.