Why succession planning is vital for wealth preservation

Estate planning is a touchy, taboo topic in Kenya, one that has seen the most astute of entrepreneurial dynasties crumble once its founder passes on without leaving a plan.

Peter Wairegi, an author, business coach and investment strategist, recently launched a book titled Wealth Preservation: The 7-Key Steps of Effective Will and Estate Planning Strategy – highlighting the importance and art of writing wills.

Sixty-year-old Wairegi, who was last month appointed as the chief operating officer for Resorts & Cities, the firm behind Longonot Gate and Makuyu Ridge resorts, is a lecturer at KCA University.

He has also published articles on personal finance, business startups, mortgages and marketing economics among other key areas in finance. Enterprise spoke with Mr Wairegi about estate planning.

Kenyans are not receptive to writing wills. What do you think causes this?

After speaking to many Kenyans about this topic, I have come to the conclusion that many are still not aware of the benefits of writing wills and advantages of estate planning.

There is a myriad reasons for this but the key ones include customary barriers, mistrust of partners, greed of heirs and security concerns over disclosing wills to loved ones.

Education and genuine conversation among family members and with one’s spouse can greatly enhance the acceptance of succession talks and the need for estate planning.

How has this affected succession planning when a family member dies and there are no documents on how his wealth should be shared out or his businesses run?

Over 95 per cent of Kenyans have no will or any form of estate planning schedules. Research done by KCA University in 2011 revealed that only one of every 10 men has considered writing a will even though the country’s succession law is available for free online.

If you die without a will, you are considered intestate. Thus the court will decide how your assets or wealth will be distributed. It is grimmer for large bereaved families where protests have become a common occurrence.

There are many case studies that show how long the cases for those who die intestate take and the horrific loss of assets by the family and, often times, legitimate heirs.

The large amounts of unclaimed assets in the country are a clear indication of the size of the problem that many heirs experience due to a planning failure that is rampant in the country.

How do Kenyans compare to other East Africans in terms of estate planning?

Kenyan have made more progress in this matter due to the high number of educated people with exposure to international estate planning cultures.

Many Kenyans, especially those educated in North America and Europe where the use of wills is the norm, have adopted this culture to save their loved ones from the anguish of protracted legal battles.

Give us a preview of the formal process of will-writing.

Writing of a will is fairly straightforward. A legal will must be written by the testator. It must include their wishes, list of their assets and the instruction of how their assets (wealth) is to be distributed.

The written will also has a guardian in case of children, executor of the estate and other instruction of the deceased. The will must be signed by the testator and witnessed by two adults of sound mind.