THE Borneo Post with the expert help of Rockwills Trustee Bhd, the leading specialist in estate planning having pioneered wills and trust 27 years ago, is publishing a regular Q & A column on estate planning. It will feature questions which readers have in mind but don’t know who to ask.
Question 1: I recently bought a house with a 30-year loan with the bank. If I write a will to give the house to my wife, what would happen if the loan is not fully paid when I passed away?
Answer: Congratulations on your property purchase and we are glad to know that you understand the importance of writing a will and got it done. When a person passes away with a will, the appointed executor will have to first apply for a grant of probate using the will, then pay off all the debts of the estate before distributing the balance to the beneficiaries according to your will.
Therefore, the housing loan must be fully settled before your wife can inherit the property.
Most people thought that distribution instructions that were written in a will would surely take effect accordingly. Many do not know that debts of the estate and all income tax matters must be settled first before distributions to beneficiaries can take place.
Because they are unaware, some individual executors made distributions to beneficiaries before settlement of liabilities and as a result exposed themselves to to be sued by the creditors of the estate for bypassing them.
Estate planning is not just about getting a will written. Writing a will is only part of the planning, but debt cancellation planning is also an essential step to ensure that the wishes in the will can become true.
There are many alternatives to debt cancellation that can be considered in your estate planning. We suggest you speak to the person who prepared the will for you regarding this, otherwise you may seek help from a professional Estate Planner who will be able to give you great advice on debt cancellation planning.
Question 2: I am considering writing my Will with a professional. How do I know whether my will is done properly?
Answer: Writing a will may sound as simply as listing down your assets and naming the beneficiaries. Will writing is more than meets the eye, hence estate planners are not being called will writers. A professional estate planner will ensure that your will meets all the legal requirements as below:
1.The will must be made in writing
2.The testator must sign the will in the presence of two witnesses
3.The two witnesses must sign in the presence of the testator
4.The testator must be at least 18 years old (21 years old for Sabahans)
5.The testator must be of sound mind at the time of signing the will
However, the real value of an estate planner’s service is their advice. While listening to your wishes, an Estate Planner will start to consider many aspects that you may have missed out such as the below:
1.Debts cancellation planning
2.Estate preservation planning
3.Estate administration continuity planning and many more.
This is especially if you have minor children where the appointment of a suitable guardian as well planning for funding and instructions for their future living, medical and education expenses should be taken care of before anything untoward happens to you.
Will writing services is not an off-the-shelf product. It requires careful personalisation due to everyone have their unique concerns and circumstances. Hence, the advice of an estate planner relies heavily on the amount of information you can give.
Therefore, you should expect to disclose sensitive personal information such as your health conditions, family relationships, assets, and your debts for the Estate Planner to do a good job. If your estate planner did not give any recommendations at all, then perhaps you should consider getting a second opinion.
This Q&A Column in published as a joint public service and educational initiative with Rockwills Trustee Bhd. Please email your questions related to Estate Planning to [email protected] or Rockwills’ training and business development assistant general manager Sam Chan ([email protected]).