Now that you have decided to write your Will, here are a few things to consider at the point of writing a Will?
- Who to choose as your Executor
- Who should you appoint as guardians (if you have minor children)
- How should you divide your assets
- When should your beneficiary receive your assets
- Practical considerations
We will look into each point in further detail.
1. Who to choose as your Executor
Most people will choose their spouse or adult children as their executor and this is quite common. A spouse or an adult child who is quite knowledgeable is a good choice. It is recommended to have a backup executor in case your first executor is unable to act as your executor. An adult child can be a backup executor to your spouse.
If you and your spouse are fairly advanced in age, then selecting your children as executor will be a better option. It is be quite strenuous for a aged person to travel about going to the various banks, government departments etc and in such s situation, selecting a younger person is a better idea.
Make sure your executor is not based overseas since he or she would have to travel back to Malaysia to sort out your estate. It would be costly and impractical for your executor to do so. This could cause delays to your beneficiary who needs to use the money.
Your beneficiary can be your executor as well. However, in some families, some members don’t get along well with one another. If you feel there might be potential for conflict, then it will be wise to choose someone who is neutral to be executor so that there will be less friction when it comes to distributing your assets.
An executor must be trustworthy as they will handle your financial affairs. Some have been know to abscond with the testator’s money. If you don’t have confidence in anyone, then you can select a trust corporation to be your executor. The trust corporation will charge a small percentage of the total value of your estate as an administration fee. It is better to pay a small fee than to have someone run off with a significant portion of your money.
2. How to choose your Guardian
If you have children below age 18, you must nominate a least one, preferable two persons as guardians for your minor children. The reason to appoint guardians is in the event both you and your spouse dies together, there is someone who will bring up your children.
Guardians are usually close relatives or friends who love your children. They should have the time and energy to look after your children. Preferable, do not select a grandparent as guardian since it is likely they may pass on first. Whoever you select, get their agreement first before you name them in your Will since it is a heavy responsibility.
An older child above the age of 21 year old can be guardian to the younger siblings.
3. How should you divide your assets
There is no right or wrong way to divide your assets. It is up to you. However, by law, your spouse should receive a portion of your asset. To a certain extent, you also have to give some assets to your sons and unmarried daughter.
However, should you choose not to give any assets to your spouse and children, then you need to state a good reason in your Will. For instance, if your spouse is well off or you have provided for them through other means i.e. property are already in their name, then you can opt not go give them anything. You will still need to state the reason why you choose not to leave them anything.
Without a good strong reason, this set of beneficiaries can easily contest your Will.
So how do your divide your assets?
You can itemize and give each asset to an individual or to to be shared between several person. This is one way to divide your assets. For example, you give your house to your spouse, a car to your son and a piece of land to be shared between your son and your spouse.
On the other hand, you can lump everything together and divide everything equally or according to a percentage between your beneficiaries. An example will be to give 50% of your assets your spouse and the other 50% to your 2 children.
Having alternative beneficiaries is important in the event the beneficiary you named dies earlier. For example, you want to give everything to your spouse. However, if your spouse dies before you, then you want your children to inherit your assets.
These are common and practical ways to divide assets. You can make it as simple or as complicated as you like.
4. When should your beneficiary receive your assets
Although you have decided to give your assets to your beneficiary, you can determine when they are to receive the assets. For instance, you want your children to receive a significant portion of your assets, however you are concern that they are too young at age 21 to receive all that that money. You feel they are not ready to handle such a large amount of money at that age and may squander it away.
In such situations, you can state in your Will, when they are to receive their inheritance. You can choose to delay it to a later age, for example at age 25 or any age you specify. You can also state for them to receive a part of their share at a younger age and the balance once they reach a later age.
5. Practical considerations
Dividing up a property to too many people may cause problems. Although you may want to be fair, having too many person means it will be almost impossible for them to sell or rent out the property. Even though the other beneficiaries agree to sell the property, a single person who oppose the sale can choose not to sign the papers. This means the others have no choice but to keep the property.
If you own a business, you’ll need to think about who will inherit your business and to make sure your business continues to operate smoothly. Some types of business like professional services which requires specialize knowledge, will be impossible to pass on to beneficiaries. For such businesses, the solution is a prearrange the sale determined beforehand. Businesses that do not require specialized knowledge can easily be passed on to others.
Since it is impossible to cover the different types of business and family situation, and is a whole topic by itself, it would be best to contact us to discuss this further.
We can help you to think through your concerns and situation. You may require other tools to accomplish what you have in mind and to distribute your estate according to your wishes without any hindrance.
Feel free to contact us to find out how we can assist to write your Will