So, you don't have a Will but you are planning to write one. Before you start the process, whether it is to work on the Will yourself or engage a lawyer, there are a few important questions you need to ask yourself.
Firstly, who do you want to inherit your estate? Think about your beneficiaries.
Secondly, think about how you can distribute your estate to them and what you should do before you decide on distribution.
Key takeaways 1) Take care of your loved ones – decide ahead of time who gets what 2) Consider what your beneficiaries need after you pass away Who are your beneficiaries? What do you give them? Distributing by proportion of your estate Distributing specific assets Key factors to consider Who or what matters to you? What do your beneficiaries need? Do you have any debt? Do you have an overseas portfolio? How will your funds reach your beneficiaries? Make your list
Who are your beneficiaries?
First, make a list of people you would like to distribute your assets to after your death. These individuals are the beneficiaries of your estate.
Beneficiaries could be family members or your favourite cause or charity. If you have a pet that you would like to be taken care of, identify the person who will take care of the pet. Don't list the pet as a beneficiary since they can't technically inherit the assets.
What do you give them?
Next, you'll need to decide what and how much of your estate to allocate to each person on your list. Here are two common ways to distribute:
Distributing by proportion of your estate – You can decide to give each beneficiary a percentage of your estate. For example, your spouse and children each get an equal share of your estate.
Distributing specific assets – You can choose to distribute your estate by allocating specific assets to individual beneficiaries. For example, you may want your spouse to have the money in your bank account and your children to have your unit trusts.
Key factors to consider
The following are some things you should consider when planning your estate distribution.
Who or what matters to you? Are there people who are financially dependent on you? They may be your children, aged parents, grandparents or someone close to you. Or even a cause you care about.
What do your beneficiaries need? Consider what and how much your beneficiaries will need. For example, if you have young children, you may need to allocate more of your estate for their well-being. You may also need to consider who to care for them.
Do you have any debt?Your debts need to be repaid. If there are not enough funds, assets will be sold to repay the debts. If you own more than 1 property, you may want to indicate which property should be sold to repay the debts, especially if there is a specific property that has a special meaning to you and your family.
Do you have an overseas portfolio? If you have overseas assets, check how foreign laws and laws of your habitual residence (the country that you treat as your permanent home) will affect whether your loved ones can take over your assets and the taxes they may need to pay. Ask about inheritance laws and taxes of the respective countries. Factoring in the different tax and legal implications helps you avoid burdening your loved ones financially. Sometimes, it might be worthwhile having different Wills to expedite the process and reduce the costs (estate fees and/or estate/inheritance tax).
How will your funds reach your beneficiaries? Think about how you want to transfer your funds. A Will is the most common way if you are doing it upon death. Alternatively, some people transfer the funds in the form of gifts or trust before death. Setting up a trust is a much more complex process and structure, and worthy as a separate blog entry, stay tuned.
Make your list
Now that you have spent some time considering your beneficiaries and what you would like to give them, it is time for you to make a list of everything you own and put a name next to each asset on the list. This list should be periodically refreshed if you intend to distribute specific assets to individuals. This will minimize conflicts if any assets are left out with no beneficiaries or remember to include a residuary estate clause in your Will.
Providing for your beneficiaries in a Will and updating your Will regularly is the very first step, and it’s an important one. But more importantly, you should register your updated Will and store it in a safe place. liteWill lets you register your Will and store an electronic copy of your Will. Otherwise, all the good work that you have done becomes irrelevant if your person of confidence is not able to find your Will in a timely manner. ‘A Will that is not registered is like a Will that does not exist’.
This portion of the website is for information only. The statements and opinions are the expression of their author, not of liteWill, and have not been evaluated for accuracy, completeness or changes in the law. Information contained in this article is not a substitute for tax or legal advice.
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