What is the definition of a will and why we need it? One word – wealth distribution tool a crucial part of comprehensive financial plan after one has crossed over to the other realm. Believe it or not, we all have indirectly written a will. The difference between writing our own personal will and letting the law (Distribution Act) writes for us is that we might not like the “template” as dictated by law. This crushes the perception that only the rich and wealthy needs to have a will. Come on, even if you are not in that category, surely everyone has some tangible liquid or illiquid assets, yes?
When it comes to law, even pertaining to estate planning, the law will protect minor, or children. Below is a summary of wealth distribution according to Distribution Act 1959. Issue refers to children.
If you have children, it pays to have a will simply because you can appoint a guardian for your children upon your demise, lest the court will decide. You don’t want that to happen, yes? Of course, if there is a surviving spouse, he or she would be the legal guardian of the minor children but this is in case both parents passed away in an unfortunate event leaving only children behind.
The other questions which many people asked is – can one write a will on their own without any help from any adviser, professional estate planner or lawyer? Yes, you can. After all, it is a matter of writing it – so simple, doesn’t even need stamping. But if one is not trained or have exposure in the areas of estate planning law, you could have written something that is not legally binding or invalid from legal standpoint. This would potentially create complications during the execution of the will.
Appointment of executor – this is perhaps as important as the will itself because the absence of the executor will render the scenario becomes as though there is no will written in the first place. Instead of Grant of Probate, a Letter of Administration with Will Annexed is now used as a substitute. Why absence of the executor in the first place? This could be due to his voluntary resignation. Imagine if your executor is your brother who stays overseas, it probably is difficult for him to travel back and stay for weeks to execute your will – including hunting for your assets, paying debts, paying taxes, etc. Executor is not compensated unless stated otherwise. So, the reality is to either appoint one of your beneficiary as executor (cost effective way), appoint a Trust corporation as executor (still cost effective) or appoint a lawyer (likely to be ad hoc) – which is the most expensive path to go.
Practical case is that you probably don’t want to put your last words aka “terms of endearment” in your will because that will cost money (Wills service provider price the wills according to the number of clauses which is proportional to the number of assets and beneficiaries to a certain extent, plus how complicated is the distribution instructions). There is a joke I heard about putting the funeral instructions whether to “bury” or to “burn” but bear in mind, normally wills are only executed AFTER funeral rites. Imagine if the deceased has been “burnt” then after that his wishes in his will is actually to be “buried”. So better to convey such wishes verbally to children instead of in a will.
Conditions of a valid will – watch the second part of the video. Pay special attention to marriage/divorce cases. Isn’t it strange that the law says divorce does not invalidates a will, but marriage does?
Other Important Things – Estate “witchhunting”, residual clause in a will, will updating and some infos on Grant of Probate resealing for assets located overseas.
Witnesses – one of the most overlooked aspects in practical. Testator (owner of the will) must choose 2 witnesses (cannot be beneficiaries or their spouses, else they lose their share of the assets but the will itself will NOT be invalidated) whom he personally knows and is aware of their whereabouts. NO strangers or someone which you doubt can be contacted 20-30 years down the road. There are consequences if you fail to take this seriously. Watch the video near the end to get what I mean.