Many times, individuals pass away without leaving guidelines for the handling of their property. This often results in disputes where relatives and unfamiliar offspring and spouses fight for the property left behind. Succession Planning is the legal process one should engage in, in order to avoid this burden on your family after you are gone.
What are the ways in which one can carry out succession planning?
There exist several ways in which one can carry out Succession Planning.
A will is a document detailing a person’s wishes on how he/she desires his/her property to be handled and distributed after death.
A nomination is a direction by an asset-owner (nominator) to a party who is holding an asset(s) on his/her behalf. The nominator directs the holder of assets to convey the asset to a beneficiary handpicked by the nominator upon the latter’s death.
Where a joint owner of property passes on, his/her interest passes to the surviving joint owner(s) by virtue of this principle of survivorship.
Giftscan be disposed to beneficiaries in two ways:
- Gifts handed out during the lifetime of the deceased; and
- Gifts handed out in contemplation of death. For instance, when one is gravely ill and foresees his/her own death, they can donate gifts that will only become effective after they pass away. Only movable properties can be devolved by gifts in contemplation of death.
- Financial savings schemes
One can cater for his/her beneficiaries by providing their ‘next of kin’ details in his/her pension scheme account. Similarly, via insurance packages such as life insurance, dependants can benefit from your proper planning.
You can secure your property via a trustee threefold: via an absolute trusteeship where all dispositions and instructions are in the trust and wholly omitted by the will; an intra-will trusteeship where the will provides for the trust while the entire set of instructions are contained in the trust document; and a hybrid trusteeship where the trust holds the property with instructions, but final instructions are made in the will.
Why are wills important?
Wills are important in succession planning for a myriad of reasons, among them the:
Reducing succession disputes
Wills bring about certainty in the distribution of property and this reduces occasions of disputes.
Provision for any and all intended beneficiaries
One can bequeath property to their immediate beneficiaries and any third parties of their choice.
- What happens in the absence of a will?
This is known as Intestacy. In the event that one dies intestate, their estate is administered in accordance with the intestacy provisions of the Law of Succession Act.
- Key Highlights of the Law on Intestacy
- Personal Representatives/Administrators
In the absence of a will, the Court appoints a Personal Representative to administer the estate. This may prove undesirable, as you may want a specific person that you have come to trust to be the administrator of your property. Persons who may be appointed Administrators include the surviving spouses, father and mother of the deceased, brothers and sisters of the deceased among other persons.
- Surviving spouses
A surviving wife is entitled to the estate of the deceased husband, household goods & personal effects for their lifetime but this determines incase the wife remarries.
A surviving husband is entitled to household goods & personal effects as well, provided that he proves that he was being financially maintained by his wife. Tellingly, the Act is silent on the status of property if the husband remarries.
- Delays in obtaining Grant of Letters of Administration
An application is made to Court for appointment of an administrator and issuance of the Grant of Letters of Administration.Application for the grant sometimes takes long since third parties object to the issuance of the grant or to some certain persons being appointed as Personal Representatives.
- Loss of Control and Incapability to Donate to Third Parties
The deceased loses control of determining the persons that will benefit from their estate. For instance, you may want to vary the proportion of the bequest or to specify bequests and the beneficiary. One may also want to bequeath their estate to institutions and causes. The absence of a will (or a gift in advance) will make this impossible.
How can one make a valid will?
The Law of Succession Act contains several requirements that must be abided by for a will to be valid. These include requirements on the people to dispose to, the provisions to be included and other procedural requirements such as signing and witnessing.
We are on hand to advise you on the specific requirements of making a valid will in order that you may cater for your loved ones as you desire.
M&K Advocates Advisory Statement
Succession planning is extremely crucial for your beneficiary to enjoy a peaceful transition after your demise. We at Muma & Kanjama Advocates are ready to advise on these requirements in order to secure the futures of those you care for.
- Charles Kanjama firstname.lastname@example.org;