Wills, do you have one. Have you ever had to act as the Executor or Trustee of an Estate?
A will is the written instructions by an individual as to how their worldly possessions will be disbursed upon their death, to their creditors, family, friends and charities etc. Unfortunately there can often be another hand in the pot which could be the Tax Department looking for its share of the Estate for Estate Duty.
We’ll look at the importance of the Will and some issues about tax planning to mitigate Estate/Death Duties, this will be spread over a couple of blogs as the issues are involved.
The Will
This is best done by your lawyer as it must follow a prescribed format to minimise any legal challenge by aggrieved beneficiaries who may feel they never got enough.
The Will is for you to predetermine how you dispense your estate.
Did you know that if you die without a will (intestate) the State via the Public Curator/Public Trustee looks after the disposition of your Estate. They are not always quick.
1. Simple Will
This is for those that have an estate that falls below the threshold liable for estate duty (if applicable in your country).
Your lawyer can quickly put this in place for you with minimum fuss & cost. Remember, your will sets the ground rules, don’t let the public curator set the rules for you. Get your will done.
2. More Complex Wills
A more complex will in my context is really about dealing with an estate that exceeds the threshold for estate duties and therefore needs careful planning to help minimise the estate duty or tax.
Did you know that your Will creates a Trust. Bet you never really thought you’d have much need for a trust? Well this is really interesting as to how you can legally orchestrate whatever you like with your estate before you die and minimise estate duties.
The secret, pre-planning. You see things that get done at short notice to save tax are often considered, contrived. But if they were done years before they are not considered contrived, but prudent.
OK, in my next Blog I want to explore the merits of what things you may put into your Will, and how this creates the pathways for the Trust setup to protect and control your assets before death and after death.
3. An Interesting Story (before bed)
A friends father died & left a lifetime interest in the house (via the will) to the stepmother, after which it would go my friend. Upon her death the house was to go to my friend. After the father’s death, the stepmother drafted her will to effectively give the proceeds of the house sale to her direct family and not my friend.
In both cases the same lawyer prepared the wills.
Question, was he a party to a fraud?
This is before the courts now!!
