Oran Hall | Consequences of not making a will

There are several estate planning tools – trusts, joint ownership, living gifts, and wills – but a will is perhaps the most common and effective means of passing on one’s assets to named beneficiaries.

It takes effect after the death of the testator and allows the testator to maintain control, even after death, while providing for the welfare of the beneficiaries.

It is possible that some people may not need a will because of how they employ other estate planning tools to distribute their assets and provide for their beneficiaries. In any case, any person who has attained the age of 18 should make a will to cover any assets not addressed by any of the other estate planning tools, or risk intestacy in regard to those assets.

A will is a document through which the testator sets out in a way consistent with the law the people, causes or organisations to receive specific assets after his or her demise. One critical clause of the will names the executor or executors, who assume the role of the personal representative or representatives of the testator, thus being empowered to carry out his or her wishes.

For a will to be valid, it must be:

• Made by a person who owns the assets – personal, business, real property;

• Made by a person who is at least 18 and is of sound mind, memory and understanding;

• Signed by the testator in the presence of two witnesses, who must themselves sign in that capacity, although not necessarily at the same time;

• Dated;

• Written without undue influence, fear or threat, misrepresentation, or mental or physical coercion; and

• Written – had-written, type-written or computer-generated.

But, for a valid will to be enforceable, it has to be proven by the court, resulting in it granting letters of probate, which give the executor or executors full authority to administer the estate of the deceased person according to the will.

There are consequences for not making a valid will or for not making a will, both of which count as intestacy. In the case of intestacy, it is the law which prescribes how assets are distributed, in terms of who gets what and what portion.

Intestacy law prioritises spouses, children, parents and other close relatives in that order. This means that the owner of the assets loses control over their distribution, so they may go to beneficiaries that the deceased did not intend for them to go to.

The opposite is also possible: assets may not go to people the deceased would have given them to. Especially in the case of people with special needs and minor children, they could conceivably find themselves in situations in which their needs are not adequately provided for.

With regard to minor children as well, although the courts generally try to appoint as guardians people they consider to be the most suitable for the children, there is no guarantee that they will name the guardians the deceased would have chosen.

In the very tricky situation of blended families in which the spouses have children other than with the current spouse, how to distribute assets can be troublesome and contentious. Other than that, the break-up of unions can complicate matters.

Whereas the testator determines who assumes the role of his or her personal representative, it is the court which ultimately appoints the administrator to manage the assets of the estate in the case of intestacy. This includes gathering the assets, paying off debts and taxes, and handling court procedures – filing the necessary petitions and documents with the court and ensuring that all actions are taken in accordance with the law – and distributing the remaining assets to beneficiaries, according to the law.

Usually, it takes longer to settle an estate that has to go through administration than through probate. Where there are dependent children and beneficiaries with special needs as well as debts to be settled, and where money is needed to carry on the normal life of the immediate family of the deceased, an extended time to settle the estate can be a great inconvenience and a source of suffering.

‘Dead lef’ so often causes disputes, even in cases in which there is a will. Therefore, it is not hard to see that the absence of a will can lead to family disputes, especially in cases in which distributions are not seen to be in line with need or perceived entitlement.

There is great value in making a will. It ensures that assets are distributed in accordance with the wishes of the testator, it reduces the potential for disputes and costly legal battles, and it provides clear instructions to provide for the well-being of the vulnerable, thereby protecting them. Not making a valid will or not making a will can be a costly inconvenience.

Oran A. Hall, author of Understanding Investments and principal author of The Handbook of Personal Financial Planning, offers personal financial planning advice and counsel.finviser.jm@gmail.com