Wednesday, February 1

Ask and We WILL Answer

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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 am planning to write my will, and the person I have in mind to be appointed as the executor is not a very healthy person. I wonder what could happen if she passed away while handling my assets?

Answer: The first piece of advice is not to appoint this person as your executor knowing that he/she may not survive to complete the administration of your estate or may fall ill and require an extended time to recover. This will simply mean your beneficiaries will not receive their inheritance anytime soon.

If the executor you appointed dies midway of administration of your estate, what happens? Two things will happen. First, there will be delay and it may be a very long one. Why so? The answer lies in the second thing that will happen.

The delay will be caused by the uncertainty about who will continue with the administration. If your executor died with a will of his/her own and appointed an executor, your executor’s executor will take over the role as your executor.

Do you know who he/she is? Likely not. Do you trust him/her? Likely not, since you do not know who the executor of your executor’s estate is. Does this pose a danger to your estate and beneficiaries? It most certainly will not be simple because you do not know who is going to act.

You may trust your executor but not the executor’s executor. Just like your executor, your executor’s executor will be in charge of all your assets, and he can manipulate and easily mismanage your assets.

If your executor died without a will, the beneficiaries named in your will must unanimously agree who is to take over to be the administrator of the estate.

All your beneficiaries who do not want the role of an administrator must give up their right to be appointed. If your beneficiaries cannot come to an agreement who should be the administrator, there is a deadlock.

The courts will not be able to resolve the deadlock. It is up to the beneficiaries to come to an agreement on this. It may be a very long time before they can agree, or they may even not come to such an agreement.

Family feuds are known to last for generations. In the meantime, your assets and will instructions are in limbo, simply because your executor died midway administering your estate.

In addition, the administrator is required to obtain administration bond from 2 persons to guarantee your gross estate value.

It will be mighty difficult in this day and age to find 2 willing persons agreeing to provide such a guarantee. This is required to protect the interest of your beneficiaries in case the administrator abscond with your assets.

You must remember, he/she is in charge of handling all your assets and there is ample opportunity and temptation for him/her to do so.

Instead of appointing individuals who may become dishonest, who may have a short life or fall to long term illness or who simply does not know what to do, it is worthwhile to consider appointing a trust company.

 

Question 2: I have always been an afficionado of fine wines and cognacs. They are all good vintage and have high collectible value. Is it recommended for me to use a will to give my collection to my children or is there other better ways to do it?

Answer: Anyone can include their personal belongings in their will. We have clients who include their rare paintings, stamp collections, and even antique teapots into their wills.

They would usually give it to their children, but some would instruct their executor to sell it, knowing that their beneficiary would not share the same appreciation as the Testator.

As the value of each collectible may not be easily determined, it is better to state as a gift in your will, each item to the beneficiary of your choice, to avoid dispute among your heirs.

Do consult your local estate planner on itemising your collections into your will. An experienced Estate Planner would be able to help you especially if any of your collection does not have a unique serial number or identification.

A clear and precise identification of your collection could save your family and the executor from long legal disputes in the future.