5 Problems With Not Having a Will
But do you know that writing a Will is not only to decide where and to whom your estate go to? Having a properly drafted Will can help in ensuring that your family are not inconvenienced by your death, and minimize any potential in- fighting, lawsuits, and other factors that may break up a family or sink them into financial difficulties. Let's take a look at some little-known implications of intestacy.
1. Unintentionally leaving out loved ones and other beneficiaries
Under the Intestate Succession Act, there are pre- defined rules how one's estate is distributed.
- For someone with child(ren), 50% goes to the spouse and 50% to the child(ren).
- For a single, 100% goes to the parents.
- For someone who's married without child(ren), 50% goes to the spouse and 50% to the parents.
There are inadequacies to the above rules.
What if you're a single and wants to distribute some of your assets to your sister, who have been taking good care of you when you're young?
Or consider the fact that you're married with kids and when you pass on, your aged parents who have worked hard all their lives providing for you gets not even a single cent from you! Worst still,your uncles and aunties might think that you're not filial for not providing for your parents!
It is best to have a Will in this case as you can lay down specific instructions on how your assets would be distributed so as to benefit the people that you want to benefit.
2. Two Guarantors and Posting of Admin Bond
When one dies intestate, the court will appoint someone to be an 'Administrator' of the estate. The role of the Administrator is to consolidate all assets, close off accounts with the banks, insurers, stockbrokers, etc, and distribute the assets to the beneficiaries in accordance to the Intestate Succession Act. In order to do that, the Administrator needs to produce the Letter of Administration to prove that he/she is accorded power to handle the deceased's estate.
However, under Section 29 of the Probate and Administration Act, the court may require the Administrator to come up with 2 guarantors (a.k.a. sureties), who in turn have to provide a bond/deposit equivalent to the value of the estate, before the Letter of Administration can be issued. Which means if the estate is worth $500,000, the 2 guarantors have to post a $500,000 bond first, before the estate can be administered. Failing which, the estate will be 'stuck', all assets stay frozen, and the whole process can drag for many years!
The rationale is that if the Administrator runs away with the deceased's assets and the beneficiaries were to sue the judge, the bond will be used as the 'damages' for the beneficiaries.
I have heard of a case where the widow literally had to get down on her knees, begging for the relatives to act as the guarantors.
With a valid Will, there is no need for the bond and guarantors, thus avoiding the above scenario.
3. Guardianship of Children
If both parents pass away, leaving surviving children, who should take care of them? You may have in mind your sibling or your parent, but is this written in black-and-white anywhere? If not, you run the risk of the court appointing a unsuitable person to be the Guardian of your children.
He/she may have no interest taking care of the children and is only interested in the inheritance that the children are entitled to. He/she may be a compulsive gambler, alcoholic, hooligan or a child abuser. Or in the case the court appoints the grandmother of the children to be the Guardian, she may not have the physical or mental capacity to take care of young children. She may also not have the financial means to support the children.
It makes sense to identify someone who can be the ideal Guardian for your children beforehand, so that you will not leave the welfare and future of your children in doubt and uncertainty. The appointment of Guardian should be included in your Will.
4. Of Trusts and Trustees
In the event of death of a parent, the assets meant for the child will be 'locked up' under a trust to be kept under the child reaches the age of 21. The court will appoint someone known as the "Trustee". However can anyone ensure that the trustee is honest and transparent, and not squander or siphon off the money meant for the child?
Furthermore if one dies intestate, there is no way for the deceased to instruct the trustee how the money should be spent on the child's living expenditure, education, healthcare and clothing.
These issues can be resolved by including a "testamentary trust" in your Will.
5. Inexperience and incapability of Administrator
Upon death of an intestate person, the court will appoint an administrator to manage the assets and distribute them accordingly to the rightful beneficiaries. Some of the work required include closing off bank and investment accounts, selling off investments and properties, going to the insurance companies to claim the insurance proceeds, terminating any ongoing subscriptions, paying off creditors and so on.
Imagine what may happen if the court appoints someone who has no experience dealing with large amounts of money or is clueless about financial instruments and investments. Or someone who is illiterate and can't make sense out of all the legal documents. Or consider that the appointed Administrator may be the parent who is elderly and have difficulty moving from place to place.
Having a proper Will allows you to elect someone who is comfortable and capable of handling these matters, and will eventually save time and trouble for the beneficiaries.
As you can see, the above problems can be easily resolved by a properly drafted and well executed Will. Certainly there are other problems that are not covered in the article, but these 5 problems alone will cause most people to start thinking about getting their Wills done to avoid inconvenience and trouble for their loved ones.
Share this with the people around you and if they happen to see the logic and light behind the merits of writing a Will, I can help them with the Will planning process.
Remember, when there's a Will, there's always a Way!
For Will Writing Services, contact CJH at 96924228.