Forget wills, plan your estate to outlive you

Numerous estate owners have left their dependents destitute, squabbling or the laughing stock of the country or village (depending on the publicity generated by family feuds) just because they failed to plan how their property and assets will be managed once they are gone.

In many African traditions, it’s common for people to consciously refuse to write wills, insisting that doing so is ‘inviting death’. In the same spirit, some people go to great lengths to keep their financial information from their spouses and children.

The Unclaimed Financial Assets Authority (UFAA) in November 2018 indicated that it is holding Sh13 billion in cash and Sh 555.5 million in shares and that no one has claimed it.

The authority indicates that 97.5 percent of owners and beneficiaries have not claimed the cash and securities. Moreover, various institutions were yet to remit an estimated Sh100 billion to the State agency; partly owing to the fact that beneficiary records cannot be traced.

It can be safely deduced that potential beneficiaries and family members are not even aware that their parent/s left behind property or shares. Families are subjected to needless suffering because of the failure of patriarchs to write wills, creating disputes within families over inheritance.

The phenomenon takes a familiar pattern. When the owner of the estate is indisposed or dies, hidden rivalries play-out among family members battling for the inheritance. Sometimes, claimants not previously known to the family emerge, further complicating matters.

Those who do not take the matter to court sort it out physically, sometimes with fatal results. What is certain is that inheritance of land and property is an emotive issue that can lead to bitter lifelong rivalries among family members.

Dealing with death and inheritance are complex matters. Even where property is transferred successfully, some heirs lack the capacity to manage the estate or the business as well as the deceased vision holder, and soon all the property is lost for any number of reasons.

Writing a will is therefore only one of the tools used in estate planning. ‘Intestacy’ is the legal term for the situation that arises when one dies without leaving a will. Intestacy may also occur where a person made a will, which is later, invalidated by the court or he/she revoked the will but died before replacing it.

One may also die partially testate and partially intestate. This happens where a person’s will covers some but not all of his assets.

On the other hand, estate planning is defined as the as the process of anticipating and arranging, during a person’s life, for the management and disposal of that person’s estate during the person’s life and after death.

Indeed, it can be emotionally taxing and complex but failure to plan increases the opportunity for greed, the likelihood for family feuds, and the collapse of the estate or the inability of potential beneficiaries to track assets. The efforts of one’s lifetime are thus wasted.

Estate planning is broader than merely having or not having a will. It is a complex legal process which, in certain cases involves the expertise of various professionals such as lawyers, accountants, investment advisers, actuaries and even counsellors depending on the complexity of one’s personal life and the vastness of the estate.

Estate planning can build harmony within the family, preserve the estate, secure its potential and value, as well as protect the present and future financial security of those left behind.

CPF Financial Services supports families through the administration of retirement schemes, provision of consultancy and financial services to guide them to better manage their assets, finances and estates to enable them to enjoy the quality of life they deserve.

The key to achieving stability in estate management is to ensure that everyone who by law is entitled to inherit, whether known or unknown to the immediate family, is adequately provided for.

Adequate provision does not mean an equal share of the estate among all beneficiaries. Other methods the estate holder can use to ensure the smooth transfer includes transfer of property during one’s lifetime including to beneficiaries who for any reason are not named in a will.

However, caution is advised as beneficiaries may get greedy and demand more.

Joint ownership of property through shareholding is also very effective. This also exposes beneficiaries to the estate and its operations. A life assurance policy can also be taken among other tools.

Ultimately, estate holders should make peace with their dependents while they are alive and explore as many tools and options as possible to ensure the smoothest transition possible.