Latest Thinking on Wills and Trusts - Why Estate Planning is Essential


Thursday, March 02, 2017 11:35 AM/ FBN Trustees

Summary of Analysis
Estate Planning is more important now than ever. Without proper planning, you could loose a large share of what you have spent your whole lifetime accumulating. We have prepared this brochure to guide you in setting up a proper Estate Plan.

However, if you already have a plan in place, this guide will show you why it may be necessary to talk to a professional about modifying that plan.

This guide begins with an overview of basic Estate Planning principles. Please note that this material is general in nature and should not be substituted for professional financial, tax and legal advice. You will need individual attention that will reflect your current personal and financial goals and the current law of the state where you reside.

Estate Planning Basics

Addressing The Fundamental Issue

Not many people want to talk about death. Whilst not a pleasant experience, the loss of a loved one can be very traumatic both for family members and friends. To compound issues, in-fighting amongst family members and legal problems or delays, could add to the grief.

Furthermore, the State will then have the right to decide when and how the properties you left behind are distributed, no matter what you or your survivors might have wanted.

Because Estate Planning is about making sure your assets are distributed as you wish both now and after you are gone, you need to consider three very important questions before you begin your Estate Planning.


Who takes charge of your assets?
For married couples, the traditions and laws of your state, which are designed to protect a surviving spouse, are important before you take this decision. Once you have addressed this issue, ask yourself the following additional questions:

• Should your children share equally in your assets?

• Do you wish to include grandchildren or others as beneficiaries?

• Would you like to share your wealth with charity?

• Who are the potential signatories to your bank or stock broking accounts?

For unmarried individuals, you may have a partner, other relatives, close friends or a favourite charity in mind and would want them to benefit from your Estate. One thing is sure: if you die before signing valid Estate Planning documents, your unwritten wishes will not be respected. Instead, state law will divide up your wealth in a best-fit manner,” potentially benefiting parents, siblings — or even distant relations whom you have never even met.

So whether you are married or unmarried, in many instances, a handwritten Will is not legally binding. Interestingly also, a list directing special keepsakes to designated beneficiaries will be ignored unless it is referenced or incorporated in a proper Estate Planning document.

Which assets are you bequeathing?

When transferring certain types of assets, you may need to answer some questions:

• If you own a business, should the stock pass only to those family members who are active in the business? Should you compensate the others with assets of comparable value?

• If you own rental properties, should all beneficiaries receive them? Do they all have the ability to manage property? What are each beneficiary’s cash flow needs and highest marginal income tax bracket?

When and how should you transfer wealth?

Three factors will naturally determine when and how your beneficiaries should receive your asset. These are:

• The age and maturity of the beneficiaries.

• The size of your estate versus your need for cash flow during your lifetime.

• The tax implications.

Basic Estate Planning Documents 
Today, the three basic Estate Planning documents are the Will, the Revocable Trust (also called a “Living Trust” because its provisions are effective while you are alive) and the durable powers of attorney. Neither the Will nor the Living Trust document — in and of itself — are tax efficient although both can be drafted to accomplish this goal. A closer look at these vehicles would help throw more light.

Wills remain the traditional way of giving property to loved ones. A man who dies testate (with a Will) is however better than a man who dies intestate (without a Will). By drafting a Will, an individual ensures that his or her belongings go to the desired beneficiaries upon his/ her death.

When an individual dies without a Will, it would be necessary to compile a list of the dead person’s assets in addition to identifying beneficiaries to the assets. Unfortunately, until this process is complete, assets cannot be distributed, even to the already identified beneficiaries.

Living Trusts
Also referred to as a Revocable or Inter Vivos Trust), a Living Trust provides instructions for the management of your assets during your life time and at death. How does a Living Trust work? You transfer assets into a Trust for your own benefit during your lifetime, selecting a professional Trustee to do the management, retaining the same control you had before you established the Trust. Note that you retain the right to revoke the Trust.

This means you can appoint and remove Trustees. If you name a professional Trustee to manage Trust assets, you can request the Trustee to consult you before dealing with the assets. A living Trust offers additional benefits. First, unlike probate assets Trust assets are not in the public domain, thereby creating the needed privacy. Besides keeping your affairs private, Trust makes it difficult for anyone to challenge the disposition of your estate.

Second, a Living Trust can serve as a vehicle for managing your financial assets if you become mentally incapacitated or disabled. A properly drawn Living Trust offers greater protection and control than a durable power of attorney, especially if the terms of the Trust specifically address how your affairs should be managed during any period of incapacity.

Durable Powers Of Attorney
Most comprehensive Estate Plans will include powers of attorney for property and health care. Powers of attorney allow you to appoint an “agent” to make decisions for you in the event of incapacity (so called “durable” powers of attorney).

In the case of property powers of attorney, your agent may be authorized to deal with all of your financial matters and to transact business on your behalf such as withdrawing and depositing funds from bank accounts, investment accounts, mutual funds, accessing safe deposit boxes, selling real estate, filing tax returns and dealing with employment benefits, insurance companies and asserting claims.

Health care powers of attorney grant your designated agent the power to make all health care decisions on your behalf, and in some states, decisions regarding the withdrawal of life sustaining treatment. The “standard form” powers of attorney are used frequently because they are readily accepted by many third parties (banks, insurance companies, title companies, doctors, hospitals, etc.).

Getting The Right Professionals

Who should draft your estate plan?

You will require the services of a professional Estate Planner. We recommend that you do not try to do it yourself. Seek competent legal advice when creating your Estate Plan, though you may want to discuss different strategies with family and friends.

Who should be your executors and trustees?

This is a critical aspect of Estate Planning. Trustees and Executors are institutions and individuals that will do the work necessary to carry out your Estate Plan after your death. They interact with your beneficiaries and make administrative and business decisions, standing in your place to implement your plan.

The Trustee will be responsible for gathering your assets, investing them conservatively while your estate is being administered, reporting their value to the government and paying taxes. He or she will also pay your creditors, report to your beneficiaries and distribute your assets.

Because choosing your Trustee is extremely important, you want to be sure that they have the time, the skills and the energy for the job. We also recommend you use a professional Trustee company because of the many advantages it has over an individual Trustee. If you are contemplating choosing an individual as your Executor or Trustee, we advise that you think twice before making the final decision.

For example, choosing an individual who owns part of your business, a second spouse or children from a prior marriage may result in conflicting interest. A co-owner’s personal goals regarding the business may differ from those of your family, and the desires of a step parent and step children may conflict.

Please ensure that the duties of the Executor and Trustees are enumerated and highlighted in your Will and Trust documents.

Specific responsibilities usually include:

• Asset management, including selling assets to pay expenses and taxes.

• Distributing income and assets to your beneficiaries.

• Making complex tax decisions.

• Paying any debts and expenses.

• Collecting assets payable to the estate or Trust, including, in some situations, life insurance or retirement benefits.

When you decide on the Trustee to use, be sure that the Trustee is willing to serve, allowing for a reasonable fee for the services that will be rendered. The job is not easy, and not everyone will want or accept the responsibility. You will need to designate an alternative in case your first choice is unable or unwilling to perform.

Who should be the guardian for your children?
If you have minor or disabled children, perhaps the most important element of your Estate Plan does not involve your wealth. Rather, it involves the person or institution that will act as your children’s guardian. Of course, the physical and emotional well-being of your children is your priority, but there also are financial issues:

• Will the guardian be capable of managing your children’s assets?

• Should the guardian receive compensation?

• Will the guardian’s home accommodate your children?

• What standard of living is appropriate for your children, given their assets and prior life experience?

If you prefer, you can name separate guardians for your child and his or her assets. Taking the time to name a guardian or guardians now — and provide adequate guidelines in your Estate Planning documents — helps ensure your children will be cared for as you wish if you die while they are still minors.

Estate Settlement
We believe you should also be aware of the basic procedures involved in settling up your Estate after your death. Here is a quick review of some of them. Your professional advisor should provide you with more details.

Transferring Property After Death
With a well-drafted Estate Plan, assets such as stock, real estate and business interests will be transferred by your Executor and Trustee according to the terms of your Will and Living Trust.

Employee Stock Options
The terms of the options plan will dictate to whom the options may be transferred and when they may be exercised. The entire value of the option may be lost if the rules are ignored or misunderstood.

Interests In Family Limited Partnerships
The partnership agreement, articles of incorporation or by-laws may limit to whom these interests may be transferred, generally requiring that the transferee agree to its terms in order to become a voting partner or shareholder.

Safe Deposit Boxes
If a safe deposit box itself is owned solely by the deceased, only individuals having responsibilities for estate administration will have access to its contents. However, if a safe deposit box is held in the name of both the deceased and one or more survivors, the survivors will also have access to the contents.

Current Accounts
For any of your survivors to have access to any of your current accounts, he or she must be a co-owner of the account. To ensure that your survivors can gain access to essential current accounts, make an up-to-date and complete list of all current accounts, and review the list of owners for each account with your bankers. Note: If a survivor has only signing authority on an account, but is not a co-owner, he or she will not be able to write cheques or withdraw funds after your death.

Employee Benefits
The deceased may have insurance, outstanding salaries, unused vacation pay and pension funds to which the surviving spouse or beneficiaries are entitled. The employer will have the specifics. If you have not listed them as one of your beneficiaries, they will not be entitled to any of those benefits.

The Probate Process

The probate process can take time, depending on the assets involved.

Although the requirements vary, the probate process generally includes:

• Notification of interested parties. Most states require disclosure of the estate’s approximate value as well as the names and addresses of interested parties. These include all beneficiaries named in the Will, natural heirs and creditors.

• Appointment of an Executor. If you have not named an Executor, the court will appoint one to oversee the estate’s liquidation and distribution.

• Accumulation of assets. Essentially, all probate assets you owned or controlled at the time of your death need to be accounted for.

• Payment of claims. The type and length of notice required to establish a deadline for creditors to file their claims varies. If a creditor does not file its claim on time, the claim generally is barred.

• Filing of tax returns. This may include final and outstanding income, gift and estate tax returns with the IRS and state revenue officials.

• Distribution of residuary estate. After the estate has paid debts and taxes, the Executor can distribute the remaining assets to the beneficiaries and close the Estate.

In some situations, Executors may elect to go through the probate process because the creditor claims limitation period is often shorter with a Living Trust.

How much is your estate worth?
To get an idea of whether you even need to worry about estate tax, you need to understand what your estate is worth.

The first step is to list all of your assets and liabilities. Use the Chart below to track your assets, and include cash, stocks and bonds, notes and mortgages, annuities, retirement benefits, your personal residence, other real estate, partnership interests, life insurance, automobiles, artwork, jewellery and collectibles. If you are married, prepare a similar chart for your spouse’s assets.

Be careful to review how assets are titled. If you have substantial debt, such as residential mortgages or credit card obligations, reduce your Estate by the amount of that debt. If you own an insurance policy at the time of your death, the proceeds on that policy usually will be includable in your Estate.

If your Estate is large enough, a significant share of those proceeds may go to the government as taxes, not to your chosen beneficiaries. You may want to talk with your Estate Planning attorney about how to avoid this result through lifetime transfers of one or more policies.

Cost Implications

How Much Do They Cost

Initially, it does appear a living trust would cost more than a will. Generally, the following factors will determine the cost of setting up a Will or Trust:

• The amount of time and skills required for this assignment

• The nature and type of assets

• Total value of your assets

• How fast you want your Will or Trust done

• Your location – state where you reside

• Legal fees

• Consent fees etc.

• Executor’s fees

• Trustee’s fees


The more common costs are:

• Probate cost – minimum of 10% (minimum) of the value of the Estate (all things being equal)

• Other ancillary cost - nominal

• Professional fees – Lawyers (5-10%), Estate Valuers (5% - 10%)

• Resealing cost


The costs will traditionally include:

• Standard cost of transferring real property - Estimated at 15%

Implementing and Updating Your Plan
Estate Planning is an ongoing process. You must not only develop and implement a plan that reflects your current financial and family situation; you must also constantly review your current plan with your advisors to ensure it fits any changes in your circumstances.

And, of course, you will need to consult your advisors regularly to take into account changes in state and federal laws.

Where do you go from here?
Remember, Estate Planning is not all about making your Estate tax efficient; it is about ensuring your family is provided for, your business can continue and your charitable goals are achieved. So even if the estate tax is permanently repealed, you will want to have an up-to-date plan in place.

To this end, use the Estate Planning Worksheet below to identify areas where you need more information or assistance. Or jot down a few notes about things you want to look at more closely and discuss with a professional. It may be easy for you to put off developing a detailed Estate Plan — or updating it in light of changes in tax law or your situation.

But if you do, much of your estate could go to pay taxes — and this could be very hard on your family. So please call us with any questions you have about the strategies represented here or to discuss how they can help you minimize your estate tax liability.

We would welcome the opportunity to discuss your situation and show how we can work with you and your professional advisors to help develop and implement an Estate Plan that preserves what it may have taken you a lifetime to build.

Four More Reasons To Update Your Estate Plan

• Family changes. Marriages, divorces, births, adoptions and deaths all can lead to the need for Estate Plan modifications.

• Changes in income and net worth. What may have been an appropriate Estate Plan when your income and net worth were much lower may no longer be effective today. Conversely, forced retirement or an unexpected disability may shrink both income and net worth.

• Geographic moves. Different states have different probate laws and Trust codes. Anytime you move from one state to another, you should review your Estate Plan.

• New health-related conditions. A child may develop special needs due to physical or mental limitations, or a surviving spouse’s ability to earn a living may change because of a disability. Such circumstances often require an Estate Plan update.

Estate Planning


Estate Planning is a process that involves people — your family, other individuals and, in many cases, charitable organisations of your choice. It also involves your assets (your property) and the various forms of ownership and title that those assets may take. And it addresses your future needs when you are unable to do it yourself. 

Many people mistakenly think that Estate Planning only involves the writing of a Will. Estate Planning is a much broader subject that involves financial, tax, medical and business planning. A will is just a part of the planning process; you will need other documents as well to fully address your Estate Planning needs.

We will use this material to summarise the Estate Planning process as well as illustrate how you can use it to meet your goals and objectives. Note though that Estate Planning is a dynamic process. This is because people, assets and laws change, and it may be necessary to adjust your Estate Plan to reflect these changes.

What Estate Planning will Help you Achieve
There are many issues to consider in creating an Estate Plan. Firstly, you need to ask yourself the following questions:

·         What are my assets and what is their approximate value?
·         Whom do I want to receive those assets — and when?
·         Who should manage those assets if I cannot — either during my lifetime or after my death?
·         Who should be responsible for taking care of my children (particularly if they are minors) if I become unable to care for them myself?
·         Who should make decisions on my behalf concerning my care and welfare if I become unable to care for myself?
·         What do I want done with my remains after I die and where would I want them buried, scattered or otherwise laid to rest?

Once you are able to answer these questions, then you are on your way to planning your Estate. 

Mistakes in Estate Planning
A lot of people believe that Estate Planning is only for the rich and famous. We do not believe that is the case. Below are some of the mistakes that comes with Estate Planning

Not planning at all – Of the common mistakes that we have found out, the most prevalent is not having a plan at all. The typical reasons for this range from fear of death to misconceived notion that it’s expensive to complicated family situations. Without an Estate Plan in place, you will be leaving your loved ones in the dark as to your financial state. In addition, your beneficiaries may end up spending all of your wealth trying to figure out what to do with your assets when you become unable to manage your assets or even when you die. We, therefore, advise that to avoid this mistake, you begin to plan early, while you are still able to do things yourself. Besides, you must ensure that you review and update your Estate Plan frequently to ensure that it works exactly the way you want it to.

Procrastinating – Most people who know what to do hardly ever do them. The consequences of an unplanned exit as a result of unexpected death or permanent disability, which can occur at any time, are enormous, just as leaving things undone until they become too late also has dire consequences. Therefore, the result of neglecting to set up simple Estate Plans can be devastating to you and your loved ones.

Believing the myth that Estate Planning is only for the wealthy – This is a fallacy. Stop assuming that Estate Planning is only for the wealthy. Anyone who has asset(s) and is concerned about how the asset(s) will end up when he is no longer alive needs an Estate Plan. If you do a proper analysis of your financial status, you will be surprised that your Estate is larger than you had thought.

Forgetting about little details – When it comes to basic Estate Planning, it is important that you follow and have little details recorded. We advise that you do not overlook making a plan for your personal effects such as jewellery, art works, and other collectibles or assume that your loved ones will be able to agree amongst themselves how these should be shared. We have had instances where siblings had to go to probate over their parent’s property, with the government in some instances taking over such property. Do not let this happen to you and your loved ones.

Failing to fund your trust – People who have decided to create a Trust often make the mistake of not funding their Trust after spending valuable time and money creating one. If you do not want your assets to go through probate then you must not stop at just creating a foundational Estate Plan, you must go ahead and fund it or else your properties may go through the court. We advocate that you take the time to transfer your assets into the Trust, updating the beneficiaries of your life insurance and retirement accounts. If you neglect to do this, then your plan is only worth the paper it is written on.

Failing to provide information regarding assets and documents – Having all your documents in order is useless if no one knows their location. Someone you trust needs to know where your assets and important documents are kept. Your Trustee will need the location of all your bank accounts, information about insurance policies and so forth. Make sure you record all relevant information, ensuring that people you trust have access to their location.

Choosing the wrong Trustee – Estate Planning involves the performance of numerous fiduciary obligations hence your choice of a Trustee for your Estate Plan is critical as these fiduciary obligations need to be professionally and accurately performed. Choosing the right Trustee for your Estate Plan is as important as creating the plan. If your Trustee is not capable of doing a good job, your plan may not work as you expected. Therefore, ensure that your Trustee is fair, knowledgeable and does not display a conflict of interest.

Making your Estate Plan too complicated – Some people make their Estate Plans
complicated such that it will take more than a dozen lawyers, accountants and even a judge to fix, not to mention the amount of money that would have been sunk into it. A complex Estate Plan will not only frustrate your loved ones but will also hinder your Trustee from making proper judgements without having to seek expensive professional advice. The goal is to make your Estate Plan as simple as possible, enabling your Trustee to perform a very good job 

Tools of Estate Planning 


A Trust is an arrangement between two persons whereby one person agrees to hold property for the benefit of other person(s), which may include the person with which the arrangement was entered into. The creator of the Trust is called the “Settlor” or “Grantor”, the person agreeing to hold the property for the benefit of another is called the “Trustee” and the person for whose benefit the property is being held is called the “Beneficiary”. 

Types Of Trust
Trusts can broadly be classified as: Living Trust; and Testamentary Trust.

What Is A Living Trust?
A Living Trust, which can either be revocable or irrevocable, is a Trust created during one’s lifetime and which is expected to take effect during that lifetime of the Settlor.

Unlike a Will, which comes into play only after you die, you can start benefiting from the Living Trust while you are still alive, hence, a Living Trust covers three aspects of a Settlor’s life: when the Settlor is alive and well, when the Settlor becomes incapacitated and when the Settlor dies.

It basically ensures that your assets are managed and distributed according to your wishes and directives, without court supervision and involvement. This can save your beneficiaries time and money and also ensure that your assets and their values are not matters for public record.

The basic goal of a Living Trust is to avoid probate. In a Living Trust, assets must be re-registered, retitled or otherwise validly transferred to the Trustee. This is particularly necessary to prevent the probate process on the Settlor’s demise. 

What Is A Testamentary Trust?
A Testamentary Trust is created as part of a Will and becomes active after the Settlor’s death. With a Testamentary Trust, properties must go through probate before they become subject to the Trust. A Testamentary Trust can be created for a minor or young adult child where assets become distributable upon the death of the parents. Often, people who create Testamentary Trusts do so to protect minor children or children with disabilities who will inherit the proceeds of the Trust.

In practical terms, Testamentary Trusts are essentially driven more by the needs of the beneficiaries (particularly infant beneficiaries) than any other considerations. Due to the potential problems of going through probate, we generally advise that a Living Trust be created rather than a Testamentary Trust.

Revocable and Irrevocable Trust
A Revocable Trust is one that allows the Settlor to keep the right to manage his property, whether he is the Trustee or not, since he has a right to change the terms of the Trust, the Trustee, and the property in the Trust at any time. Hence, a Revocable Trust is deemed to be flexible because it can be amended, changed or even terminated during a Settlor’s lifetime.

An Irrevocable Trust, on the other hand, cannot be amended, changed or terminated during the Settlor’s lifetime except by a court order or the joint consent of the Settlor and all the beneficiaries.

A Will or Testament is a legal declaration by which a person, the Testator, names one or more persons to manage his or her Estate and provides for the distribution of his or her property at death Wills remain the traditional way of gifting property to loved ones.

A man who dies testate (with a Will) is better than one who dies intestate (without a Will). When a man dies without a Will there often arise problems and complications. This is because all the Estate will be administered by the State.

Although the court system attempts to distribute the deceased’s assets in a manner that is deemed fair to your beneficiaries, there is no guarantee that fairness would be achieved.

When an individual dies intestate, it would be necessary to compile a list of the deceased’s assets in addition to identifying beneficiaries to the assets. Unfortunately, until this administration process is complete, which could take months or even years, assets cannot be distributed, even to beneficiaries who have already been identified.

By drafting a Will, an individual ensures that his or her belongings will go to the desired beneficiaries upon his/her death. 

Other reasons why you should have a Will are:
·         Should you die without a Will, there are certain rules which dictate how your money, property or possessions would be distributed. This procedure may not be how you would have wanted your estate to be managed.

·         Unmarried partners and partners who are not statutorily registered cannot inherit from each other unless there is a Will. Hence, the death of one partner may create serious financial mishap for the living one.

·         If you are blessed with children, you will need to make a Will wherein you provide for their anticipated future needs.

·         Since you will appoint an Executor/Trustee of your choice, your Estate will not be subject to the whims and caprices of the Public Administrator/Trustee and the attendant bureaucracy which follows intestacy.

·         It may not be impossible to reduce the amount of tax payable on the inheritance because your Executor would be given a firsthand opportunity in the probate form to evaluate your estate, which will be the basis for inheritance tax. A man who dies intestate would not have this privilege because only the valuer appointed by the State would carry out such evaluation and your estate may be overvalued for tax purposes.

·         Besides, there is a likelihood that you will be allowed to rest after a "life of hard work" if you make a Will and distribute your assets according to your wishes. If you die intestate (without a Will), be assured that you have opened your Estate to full blown serial-litigation and planted a legacy of discord for your loved ones. 

Essential Characteristics of A Will
·         Legal Declaration: The documents purporting to be a Will must be in legal form, i.e. in conformity with the law, and must be executed by a person legally competent to make it.

·         Disposition of Property: The declaration should relate to the disposition of property of the person making the Will.

·         Death of the Testator: The declaration as regards the disposal of the property must be intended to take effect after the Testator’s death.

·         Revocability: The essence of every Will is that it is revocable during the lifetime of the Testator.

·         Execution: An unsigned Will is a worthless paper and its contents are not enforceable. Consequently, it is important for a Will to be duly signed by the Testator in the presence of at least two (2) witnesses; and by the witnesses in the presence of the Testator. 

The Probate Process
Even if you are not yet a celebrity or a warlord in the eyes of the public, you can still learn from the many mistakes that they make. While many of us will welcome the public life, we may not be prepared for the public scrutiny that a Will demands. Invariably, this is one of the problems that Wills create.

In time past, Will still remains the most popular mode of transferring assets to loved ones after their deaths. Upon the reading of the Will, the Executors of the Estate will commence the process to obtain the grant. In reality, Probate is often a long, bureaucracy-laden drawn-out process that seems to serve the needs of everyone but you and your loved ones

What is Probate?
Probate usually refers to the legal process whereby the deceased's assets are collected together and, following various legal and fiscal steps and processes, eventually distributed to the beneficiaries of the estate

How Probate Works

Many believe that passing on their entire possession is a simple process. The belief is that they can simply just write out their wishes (in the form of a Will) and expect somehow that those wishes will be effectively carried out without any hassle. Unfortunately this is not so. Wills require probate; and the process of its grant is not so simple. Probate is a technical, often times complicated and bureaucratic process that get everyone confused and drained out.

Roughly speaking, the probate process begins with the application to read the Will upon the demise of the Testator. As simple as this appears, the battle for the soul of the Estate may sometimes be activated at this point wherein several Wills alleged to be of the deceased will surface from only God knows and parties will have to be embroiled in protracted lawsuit to determine the authentic one.

Yet, crossing this hurdle is just the beginning of what may later appear as an endless process that will eventually culminate in the grant of probate.

This grant is the authority the Executors of the Estate have to deal with the assets of the Estate in accordance with the Will. Until this point, the Executors can hardly deal with the assets of the Estate legitimately. Unless you have a fairly simple Estate, your executor may be forced to hire other professionals to compliment his services 

Should you avoid probate?
Trusts cost less to administer and have substantial benefits that can never be achieved by a Will. There are certain reasons why you may wish to avoid probate:

·         If you desire privacy, Trust documents are generally not filed with the court
·         If you own property in more than one state which will require an expensive “ancillary” administration in the other jurisdiction;
·         To provide for uninterrupted management of your assets;
·         To avoid certain probate expenses and undue administrative delays; and
·         To provide a certain sense of relief, knowing that everything has been taken care of prior to your death.

The Place of Professionals

Individual vs. Corporate

You will require the services of a professional Estate Planner. We recommend that you do not try to do it yourself. Seek competent legal advice when creating your Estate Plan, though you may want to discuss different strategies with family and friends.

Who Should Be Your Executors and Trustees?
This is a critical aspect of Estate Planning. Trustees and Executors are institutions and individuals that will do the work necessary to carry out your Estate Plan after your death. They interact with your beneficiaries and make administrative and business decisions, standing in your place to implement your plan.

The Trustee will be responsible for gathering your assets, investing them conservatively while your estate is being administered, reporting their value to the government and paying taxes.

He or she will also pay your creditors, report to your beneficiaries and distribute your assets. Because choosing your Trustee is extremely important, you want to be sure that they have the time, the skills and the energy for the job. We also recommend you use a professional Trustee company because of the many advantages it has over an individual Trustee.

Please ensure that the duties of the Executor and Trustees are enumerated and highlighted in your Will and Trust documents.

A professional will help:
·         To prepare a legally binding and detailed document.
·         To ask questions that may bother you about your Will or other options for leaving your property.
·         To seek advice on tax planning in the case of very large amount of assets, which may be subject to estate tax.
·         Rather than simply naming people to inherit your property, you may want to make more complex but effective plans – for example, leaving your house in Trust. To ask questions as to the rights of surviving owners or your ownership share where you are in a partnership business with other people.
·         In the event that you need to make arrangements for long-term care of a beneficiary, for example, setting up a Trust for an incapacitated or disadvantaged child/dependent.
·         To avoid your Will being contested on grounds of fraud, or a claim that you were unduly influenced, or of unsound mind at the time of execution of the Will.

Effective Planning

Structure vs. Cost

Estate Administration or the Probate process have many associated fees before your assets can be fully distributed to your heirs. Administrative costs vary widely from state to state, but usually are estimated at 5-15% of an Estate’s gross value.

Fees can include Executor’s fees, legal fees, filing fees, appraisal fees, publication fees, bond fees and unexpected legal costs for services such as Will contests/disputes and real estate transactions.

In addition, depending on the structure, there will be an excise or Estate tax on the transfer of property from the Testator to either the Trust or Beneficiaries. Estate Taxes are applied at the State levels. Proper Estate Planning can help mitigate Estate Taxes and Estate Settlement Costs.

Fact Sheet – Nomination

Nomination is a written direction to the Trustee that sets out the dependants and /or legal representative that you want to receive your benefit when you are no more.

It is a clear sign that you know the importance of planning for the future beyond savings. One other key value of this fund is that it enables you to plan for the future beyond your lifetime at little or no cost to your Estate.

Nominated fund can be adapted for money market fund with Estate Planning flavor, while the nominated fund invests majorly in money market instruments like treasury bills, commercial papers and bankers’ acceptance.

The goal of the fund is principally to preserve and grow your fund for your benefit in your lifetime and the benefits of your nominees on your demise in a manner relatively devoid of disputations and also reduces your tax exposure.

Similar to your Will, Nomination gives you the right to modify or change your nominees at anytime provided you execute the instruction according to the law. Unlike a Trust however, it gives you control over your fund in your lifetime as the title of the fund still resides in you.

You remain the owner of the fund and have powers to give instruction on the terms of the investment – should your investment be rolled over every 30 days or 90 days?

If your Nomination is valid and in effect at the date of your death, the Trustee will pay your benefit to those (beneficiaries) you have nominated and in the proportions set out in your Nomination. You can make a Nomination at any time.

Changing a Nomination can be done at any time by completing a new Nomination expressing the changed or new intentions of the Nominator and giving this to the trustee.

The written notice needs to be signed and dated in the presence of two witnesses who are at least age 18, neither of whom should be a Nominee.

The benefit of nomination like its Trust counterpart is that it does not go through probate thereby saving you the hassles of probate and payment of probate duty.

Who can I nominate as a beneficiary?

Any one or more of the following (dependants and/or legal representative) can be Nominated

·      Your spouse
·         Your child (or your spouse’s child) of any age, including an adopted child, foster child, ward or child
·         Any person who was in an interdependency relationship with you at the date of your death, ·         Any other persons (irrespective  of age) who in the opinion of the Trustee, are or were in any way financially dependent on you at the date of your death

If you nominate your legal personal representative on your Nomination, your benefit will go to him directly and will not form part of the Estate. In other words, such benefits will go to him in his personal capacity and to as your legal representative.

Where you however name its office (i.e my Executor or Administrator) as your nominee, it will form part of your Estate and be distributed in accordance with your Will (if you have one), or in accordance with the laws that govern people who die without a Will.

Your legal representative can be any of the following:
·         The Executor of a Will
·         The Administrator of the Estate of a deceased person
·         A person who holds an enduring Power of Attorney

Who should you nominate?

The most appropriate beneficiaries to nominate in your Nomination will depend on your personal circumstances, as there may be taxation implications arising. It is recommended that you seek professional advice before making a Nomination.

How many beneficiaries can I Nominate?

You can nominate as many beneficiaries as you wish. If there is insufficient space on the Nomination form, simply attach a separate sheet of paper with the names of the additional beneficiaries and their benefit percentages.

If you are nominating more than one beneficiary, please ensure that the total of all Nominations adds up to 100%.

If you want the whole amount of your benefit to form part of your Estate, you must nominate your Trustee to receive 100% of your benefit.

How you can ensure that your Nomination is valid?

There are certain conditions that must be met to ensure that your Nomination is valid. These are:
·         The Nomination must be in favour of one or more of your dependants and/or your legal personal representative
·         The allocation of your benefit among the beneficiaries nominated must be clearly set out
·         100% of your benefit must be allocated. The entire Nomination will be invalid if the allocation does not equal exactly 100%
·         The Nomination must be signed and dated by you in the presence of two witnesses both of whom are over the age of 18 years and not nominated to receive the benefit.
·         The Nomination must contain a declaration signed and dated by each witness stating that the notice was signed and dated by you in their presence.

If your Nomination fails to meet any one of the above conditions, it will be invalid. If any of the information provided I your Nomination is unclear, the Trustee will contact you to confirm the details. An unclear Nomination may be invalid.

Can I amend my Nomination?

You can amend your Nomination at any time. To amend your Nomination you must complete a new Nomination for and provide it to the Trustee. Please note: your valid Nomination may remain in effect even if your personal circumstances change.

It is therefore important that you amend your Nomination if there is a significant change in your personal circumstances such as marriage, divorce, the death of a nominated dependant or the birth of a child to ensure that your Nomination continues to reflect your wishes.

Can I revoke my Nomination?

You can revoke your Nomination at any time by withdrawing and destroying the nomination form including copies thereto. A later nomination with respect to the same fund will automatically invalidate the earlier one.

What if I do not have a Nomination in effect at the date of my death?

If you do not have a Nomination in effect at the date of your death the Trustee must pay your benefit to the personal representative of your Estate who will subsequently distribute it according to your Will.

If any or based on his discretion where you die intestate. This will also subject the fund to probate and payment of Estate duty.

Key Features

1.       It is a directive made by a person (the Nominator) to an Organisation or an Individual that upon his death, his funds in the Organisation should be paid to an Individual (the Nominee or Beneficiary).
2.      Nominations can however only be made in respect of funds (cash/savings) of the Nominator and not in respect of other properties or investments in other institutions.
3.      Where Nomination is made, the funds are paid to the nominee of the deceased. Like Wills, Nomination only takes effect upon the death of the Nominator (ambulatory)
4.      Nomination can only be revoked in the lifetime of the Nominator.
5.      One of the advantages of Nomination over a Will is that it does not call for the detailed formality of a Will but it should be in writing.
6.      It is also not subject to probate and Estate duty alike.
7.      The obvious disadvantage is that it does not dispose of other properties aside funds.

For more information, please send an email to or call 0708 0653100

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