The cornerstone of any estate plan is a person’s Will. It is also the touchstone for all other wealth planning activities. Unfortunately, many people do not exercise their right to execute a Will. So, why should a person execute a Will?
For starters, how does a Will relate to an estate?
- An estate comprises all the property owned solely by the deceased at the date of death
- In turn, that deceased person has the option to exercise control over the management of that estate by having executed a Will while living
- That said, the field of “estate planning” broadly addresses all your financial and legal planning both during your life and obviously after you die
At it’s core then, what does a Will do?
- Two main purposes:
- Who will receive the property of the deceased person — the beneficiary/ies
- Who will collect, manage and distribute that property — the executor
- Lays out the ‘rules’ of how and when this is to occur
Is there anything beyond this ‘administrative’ function?
- These core purposes may be seen as a shield that protects the desired distribution
- It can also be a sword that exploits legal rules and accesses tax planning opportunities to provide advantages to the beneficiaries that would otherwise not arise
Is it all then simply about ‘dollars and cents’?
- On the face of it, it truly is primarily a property distribution document
- Beyond that though, it is an important means of providing closure to those left behind, even if there are no surprises in its content
What if there is no Will?
- Where there are few assets and uncomplicated relationships, it may be that the lack of a Will has little or no bearing on the management of the estate
- On the other hand, it could result in unintended beneficiaries, undesired proportions, and ultimately unnecessary family anguish that could have been easily avoided