10 Dec TO PREPARE OR NOT TO PREPARE… SHOULD YOU BOTHER TO MAKE A WILL?
In looking for an interesting way to start this article, I began by searching online for famous quotes about procrastination. Sometimes the fear of what will happen if you do not get your affairs in order can be a persuasive argument for actually sitting down to write a will.
I found a few good ones which in my view are not necessarily about scare tactics but more about exercising good judgment and responsibility to protect your assets and your family. Some of these included:
“You may delay, but time will not, and lost time is never found again” — Benjamin Franklin
“Procrastinate now, don’t put it off” ― Ellen DeGeneres
“Procrastination is the bad habit of putting off until the day after tomorrow what should have been done the day before yesterday.” ― Napoleon Hill
Taking the time to prepare a will to formally deal with the disposal of your assets can bring some measure of reflection on one’s mortality, which is natural. Apart from that, there are also some good legal and practical reasons for writing a will and avoiding the chaos that could follow if your intentions after death are unclear.
A good place to start
There is no need to wait until you own a sizeable estate before making plans as to how to dispose of it. It is good practice that as soon as you own something of value even it has not yet fully matured, to start thinking of what should be done with it when you are no longer around.
There are some family situations which might require a more urgent need to have a will in place. For example, a single person with no family, a single parent with minor children or elderly dependents, or a person with serious medical or mental health issues. In other circumstances, a business owned and run by a single person who has a number of employees should probably make arrangements for the continuity of the business.
What assets should be included in a will?
The short answer is that you can make provisions in your will to leave anything you consider to be valuable and wish to pass along to a beneficiary. Assets can include real estate (property), money in a bank or other financial institution, shares or stocks, proceeds from an insurance policy, a cemetery plot, valuable artwork, jewellery, vehicles or a business. Sometimes assets such as a house or a bank account are owned jointly with another person. Under laws of survivorship this type of asset will pass automatically to the remaining party or parties on the death of the first. For this reason, it is important to carefully select the person with whom you jointly hold any asset.
It is worth making a distinction here between a will and a Power of Attorney, though I do not intend to deal with the latter in any detail in this Article. A Power of Attorney is a legal document by which a person gives certain designated or defined powers to a third party to act on his or her behalf. It can involve the authority to buy and sell property, transfer shares, rent, deal with the bank, sign cheques, commence proceedings, vote at an annual general meeting of a company, make medical and end of life decisions for another person. The important distinction is that any power contained in a Power of Attorney ends on the death of the person who gave the authority. A will deals with the intentions of a deceased person’s assets and liabilities after death. The powers and duties given to an executor by way of a will relate specifically to the administration and distribution of the estate in accordance with the wishes set out in that will.
What must be included in the formal document?
Firstly, a will has to be in a written form and clearly legible. It should contain certain basic information about the testator (person who has made the will) including their name, address and job position. It should clearly identify the name and address of all the executors who will be responsible for carrying out the testator’s wishes. By law, it is possible to appoint up to four (4) executors, though practically speaking it makes sense to have at least two (2). In the event that one person is unable to perform the duties, then the remaining person can continue. If none of the executors are able to perform the duties or do not wish to do so, then it is possible to have an administrator appointed to do that. Probate law sets out a method for determining this and advice should be sought from a Probate Attorney.
Deciding on the most appropriate person to be an executor is an important decision as it requires trust in that person’s ability to act properly on behalf of the beneficiaries and the estate at all times. It is also important to ask someone if he is willing to carry out the duties of executor. An executor can in some circumstances have to use his/her own money to pay for certain expenses related to the estate or its maintenance until assets can be distributed. These are to be refunded to the executor from the estate once the grant of probate (the legal document which authorized the executor to carry out the wishes in the will) has been obtained. Even so, it is worth considering the benefit of making provisions for the payment of any expenses which may arise, for example funeral expenses, legal expenses, maintenance fees related to a property in the estate. The executor will also be responsible for settling any liabilities (including taxes owed by the deceased person) arising out of the estate.
A will should also include a residuary clause, which is basically a statement in which provisions are made for any assets that are not specifically dealt with in the will. An example of this may be where a person inherits assets either after finalizing a will or after death.
The execution of the will has to be witnessed by two persons who are neither beneficiary or executor. An executor can be a beneficiary of the estate but is unable to sign as a witness to the execution of the will. When the executor has to prepare and file the application documents to obtain a grant of probate so that he/she can administer the assets, an important inclusion is an affidavit by a witness to the signing of the will. Often times years later, it is difficult or impossible to locate witnesses who witnessed the execution, as they may have died or moved away. Keeping the contact information for these persons with the originally signed will is a good idea. Alternatively, getting the witnesses to sign an affidavit confirming execution at the time of the execution may be useful.
Under the probate laws in Trinidad & Tobago it is not mandatory for a will to be registered, but it can be voluntarily lodged at the Probate Registry for safekeeping.
Some practical take-aways
Notwithstanding some of the legal and formal requirements of preparing a will and ensuring its validity, hopefully the importance and relevance of preparing a will is not lost. To delay or actively decide not to write one, can place unnecessary pressure on those left behind, creating doubt and conflict. Instead a will should be seen as a dynamically changing document which reflects the different stages and growth of one’s life. It is good practice to start as soon as is possible, adding and amending as time progresses.
Outside of some of the main formalities noted above, you should avoid any situation which creates doubt or uncertainty about your estate, any assets to be distributed, your ownership of these assets, and who are the beneficiaries, whether a person, company or otherwise. One pitfall to avoid is creating a vague or uncertain condition attached to any asset. This can create an environment of conflict for a beneficiary especially if the condition is onerous and hinders the latter’s ability to treat with the asset freely.
Once the will has been prepared, it is always a good idea to create a separate list of all the assets with the will, including, for example copies of deeds, insurance policies, share certificates, names/branches/account information for bank accounts financial institutions, updated contact information for witnesses, executors, beneficiaries. Any information which will be needed by the executors to manage the distribution of the assets after probate and maintenance of the estate in the interim. There is little or no reason to procrastinate now.