Life can be unpredictable, and we never know what may happen or how things may change. One can go from being the richest man in Babylon to living in abject poverty. Sometimes, it could be the case of moving from grass to grace.
Given life’s unpredictability, we also need to be prepared for the unexpected, even when the unexpected is not in our favour.
Mark lost his father at 15 when he was still a minor.
It was a painful loss, but he took solace in the fact that he and his siblings would not suffer because everything his father owned had been willed to his mum. She had just recently retired from work, so she had time to manage the affairs of the family.
Unfortunately, tragedy struck again. His mother unexpectedly fell critically ill with cancer and needed urgent medical care. After spending a lot of money hoping that the situation could be managed, she eventually passed away.
Unlike when his father died, this time there was no financial backing to cushion the effect of the loss. Why? Because the default arrangement on his father’s will was for the surviving spouse to inherit everything if there was no will. Since the only surviving spouse — Mark’s mom — had also passed without writing another will, everything was automatically lost.
Family members took over everything, leaving Mark, who is now 21, and his younger siblings were left destitute. As a result, they were all forced to drop out of school since there was no money.
Not the best of endings, but it is what it is. The reason I brought this story up is so we can learn from the mistakes that were made and avoid a repeat of this traumatizing experience.
But what could have been done differently?
Mark and his siblings could have applied for a Letter of Administration. It is simply an official court document that proves you have the authority to deal with someone’s estate. If Mark had it, he would have been able to act as the administrator of his father’s estate, allowing him to close bank accounts, sell the properties and distribute assets.
Secondly, the mother should have written a Will at the earliest time possible. If she did, we would have expressly made Mark and his siblings the exclusive beneficiaries of the family estate and saved them a lot of distress.
Finally, the father could have set up a Trust nominating his children as beneficiaries. That way, even if the mother did not write a will, the father’s will would have covered his children.
It doesn’t have to be you.
Sadly, this exact scenario happens every day, but it doesn’t have to be you.
Planning helps you prepare for the “what if’s” that happen when you’re not expecting them. By setting up a Trust and writing a will, you can rest assured that the future is secure.
You work too hard for your life’s work to go to waste. With an estate plan, you can avoid probate, minimize taxes, and protect your family’s financial future.
How to Get Started with Estate Planning
The truth is, creating an estate plan might seem overwhelming, especially if you are doing it for the first time. But it is easier if you approach it systematically.
Try these four simple steps:
1. List out your assets. This should include houses, savings, investments, life insurance policies — just anything else of value you have to your name. It would be best if you were thorough here to ensure you leave nothing out. Take your time.
2. Determine who your assets will be transferred to when you pass away. Setting up a Will or Trust will help you achieve spell out who gets what in detail.
3. Choose an executor for your estate. You trust this person to carry out your wishes when you pass. That way, you are sure your assets are distributed exactly how you want them.
4. Discuss your options with an estate planning expert to help you create a comprehensive plan that meets your unique needs and goals.
Unexpected events are part of life and are unavoidable, but we can do our best to prepare for them by having a comprehensive Estate Plan. With a proper Will and Trust in place, you keep going with life, knowing fully well that the future is covered.
Ready to start planning? You can send a mail to trustees@afrinvest.com to request a consultation with one of our experts.
