Demystifying wills and trusts: A guide to secure wealth transfer

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Subscribe to enjoy similar stories. Estate planning is essential for ensuring the well-being of loved ones and safeguarding wealth for future generations. While many perceive it as a task for the wealthy, having a robust estate plan is crucial for anyone who wishes to secure their family’s future.

Wills and private family trusts are two primary tools in estate planning that enable one to lay out a structured roadmap for family members and other loved ones, detailing the mode and manner of distributing assets. A key distinction between the two is that while a will comes into effect only on the demise of the person, with no recourse to seek clarity, a private family trust can be set up during the lifetime of the person, ensuring that members of the family are familiarised with and accustomed to the process. Let’s delve deeper into certain key features of wills and trusts.

A will is a legal document that specifies how a person’s assets will be distributed after their death. It lets them appoint an executor who acts as interim administrator who collects their assets, pays their debts, and distributes their property to the beneficiaries. A person can also designate a guardian in their will for minor children, or for other things such as last rites.

Without a will, the estate of a person is governed by the intestate succession laws, which may lead to conflicts and assets going to unintended family members. A will addresses such challenges and allows one to bequeath their assets to anyone that they desire, such as a friend or a charitable organisation. A private family trust is a legal arrangement in which assets are held by a trustee for the benefit of designated beneficiaries.