10 facts about estate planning – securing the future of your loved ones

Let’s face it – we are all going to die someday. We all probably want to be remembered as good ancestors, working hard to amass whatever we can so as to live some of it for our children, and possibly their own children as well.

While a good ancestor may be the one who leaves something tangible behind for his offspring, he can very easily become a “bad” ancestor if he amassed wealth without setting in place proper plans as to how these assets should be shared upon his death. There are many wealthy people whose death pits members of their family against one another all in a quest to lay hold of their fair share of their estate.

In fact Johann Lavater, the German theologian is quoted to have said, “Never say you you know a manuntil you have divided an inheritance with him.” It thus behooves on every one of us to leave clear instructions regarding who gets what and this is where estate planning is essential.

According to Forbes.com Estate planning can be defined as the process of legally structuring the future disposition of current and projected assets. It is the act of preparing for the transfer of a person’s wealth or assets after their death. Here are ten quick facts about Estate planning.

Estate planning is not only for the rich and affluent

Estate planning comes into consideration when you have something of value you want to pass on to your relatives and loved ones which could be cash, properties, investments etc. Middle class families also have several things of value that they t need to pass down to their offspring so they also require a proper statement of their intentions.

A lack of an estate plan could wreak disastrous consequences upon the family

Stories abound in some cultures of the siblings of a deceased person taking over their brother’s property to the detriment of his wife and children. There have also been cases of siblings fighting each other in the media and the law courtsbecause of property. I am pretty sure no one would love this to happen to their family hence the need for a proper estate plan.

It ensures there is no ambiguity about your intentions

Sharing of assets should not be based on assumptions; rather it should be based on specific instructions as to who gets what from the estate. Without a proper estate plan in place a lot more people may lay claim to the deceased’s possessions.

Your assets can be easily and quickly transferred to your beneficiaries

Putting a good estate plan in place will ultimately benefit your heirs as it aids them to gain control of your assets in a shorter time than it would without one. In fact claiming inherited assets without estate planning can be a harrowing experience as it may take several years in probate court and administration before there can be access to the value in those assets.

Ensure your business interests continue running smoothly

Who is going to take over the running of your business interests on your demise? This is probably one of the most stressful issues to decide. Now you might have siblings and a spouse but there is a good chance that none of them has what it takes to run your enterprise. Now this is where Estate planning could be useful. You could stipulate that the trust runs your business and provides returns to your loved ones, thus giving your business interests a much better chance of existing for many more years.

Estate planning is a complex but rewarding process

Now wills, trusts and power of attorney are some of the documents used in proper estate planning that is backed by law to enforce one’s wishes and decisions. The process however requires a statement of one’s objectives and intentions for loved ones. I recently sat down with some staff of a financial institution to go through the process and they asked questions I had never considered before. Estate planning is the responsibility of professionals.

Minimise Expenses

Good estate planning can keep the cost of transferring property to beneficiaries as low as possible, leaving more money for your beneficiaries.

It has many advantages even while one is still alive

While many see estate planning as a useful tool when one is no more it can also come in handy to plan for unforeseen eventualities, such as when one in incapacitated due to illness and needs to pay for one’s medical care. It can also include a pre-paid funeral plan.

Plans must be subject to constant review

An important consideration to remember about estate planning is that your estate plan should be reviewed at least periodically and whenever a life event occurs. Estate planning can be an ever-changing, evolving process. Laws can change. People can change. Assets can change. Because of these things, it is important to revisit your estate plan regularly to consider updating.

A larger chunk of your assets will go to the government without an estate plan

Decisions on who gets what from your estate will be the responsibility of the government if you are without an estate plan. Your assets will not be shared based on your intentions. This process can take a long time to decide and you can be sure the tax man will be getting a better than fair deal on your assets by getting higher taxes when they take decisions on your behalf.

In conclusion please accept my apologies if I had mentioned death or dying in this short treatise on estate planning because I know without a doubt you’re not going anywhere soon. However stop spending more time planning vacations, parties and many other events without taking time to plan the future use of your assets if something happens.

There are quite a number of financial institutions providing estate planning services in Nigeria and I want to encourage you to not let this year end without plugging into the enormous advantages this will bring to you and your family members. Now who really is a “good” ancestor? One who plans for the tomorrow of his dependents.

Kenneth Doghudje