Who needs Estate Plan?
Everyone, yes, the simple answer is EVERYONE.
Why? because every human being living has some wealth and legacy which they can preserve and transfer to the next generation. Be it personal effects, savings, pension funds, insurance, etc.
Estate planning is not just for “retired” people or people who have built some wealth. As long as you have some clothing’s available to be distributed, that constitutes an asset that can be transferred to the next generation or committed to charity
Estate planning is for every individual who is desirous of keeping his/her house in order and making adequate preparation for beneficiaries (spouse, children, relatives, charitable causes, etc) and every individual with a diversified asset portfolio.
Issues To Consider In Creating An Estate Plan
• What are my assets and what is their approximate value?
• Whom do I want to receive those assets — and when?
• Who should manage those assets if I cannot — either during my lifetime or after my death?
• Who should be responsible for taking care of my children (particularly if they are minors) if I become unable to care for them myself?
• Who should make decisions on my behalf concerning my care and welfare if I become unable to care for myself?
• What do I want done with my remains after I die and where would I want them buried, scattered or otherwise laid to rest?
Estate Planning Instruments
Read Also : What is Estate Planning
Wills As An Instrument of Estate Planning
• A Will is an instrument that directs how your assets are to be distributed and your debts, taxes, and expenses are paid after your death.
• Also referred to as a Testament, it is a legal declaration by which a person, (the Testator), names one or more persons (the Executor(s)) to manage his or her Estate and provides for the distribution of his or her property at death. Will remain the traditional way of gifting property to loved ones.
• When an individual dies without a Will, it would be necessary to compile a list of the dead person’s assets in addition to identifying beneficiaries to the assets. Unfortunately, until this process is complete, assets cannot be distributed, even to the already identified beneficiaries.
Essential Characteristics of A Will
• Legal Declaration: The documents purporting to be a Will must be in legal form, i.e. in conformity with the law, and must be executed by a person legally competent to make it.
• Disposition of Property: The declaration should relate to the disposition of property of the person making the Will.
• Death of the Testator: The declaration as regards the disposal of the property must be intended to take effect after the Testator’s death.
• Revocability: The essence of every Will is that it is revocable during the lifetime of the Testator.
• Execution: An unsigned Will is a worthless paper and its contents are not enforceable. Consequently, it is important for a Will to be duly signed by the Testator in the presence of at least two (2) witnesses; and by the witnesses in the presence of the Testator.
• Probate: Details below
The Probate Process Of A Will
• Probate usually refers to the legal process whereby the deceased’s assets are collected together and, following various legal and fiscal steps and processes, eventually distributed to the beneficiaries of the estate.
• Roughly speaking, the probate process begins with an application by interested parties, to the Probate Registrar for the Will to be read upon the demise of the Testator.
• The will is usually read at a designated time or day as may be determined by the Probate Registrar.
• Afterwards Probate is usually granted upon another application made to the Probate Registrar by the named Executors of the Will.
• This grant is the authority that the Executors of the Estate have to deal with the assets of the Estate in accordance with the Will. Until this point, the Executors can hardly deal with the assets of the Estate legitimately.
Trust As An Instrument of Estate Planning
• Trust is a legal instrument or device whereby a person called a Settlor delivers part or all of his properties to another person called Trustee who administers and manages the properties for the benefit of designated person/s called Beneficiaries.
• The term “person” may refer to an individual or natural person or a juridical person like a corporation.
• It is a transaction usually composed of three parties (settlor, trustee, and beneficiaries), each with his own obligations and rights, and involving properties and property interests to address various kinds of purposes.
• The most notable feature of Trust is grounded in the fact that the legal title to the property is in one person while the beneficial interest which is referred to as the “equitable title” is in another person.
• The legal right ownership and control are in the trustee, subject to the duty of applying and using the property as directed by the Settlor, while the right to enjoy the benefits from the property is in the beneficiary of the trust.