We all desire to leave a legacy and while legacies are usually intangible, we must ensure that we have a succession plan for our tangible assets as well. The key aspect of succession planning is creating a will. Celebrities like Prince and Aretha Franklin shocked the world after their passing when it was revealed that they did not have an official will. Aretha Franklin’s family remain in the news as they continue to feud over her assets.
There are many reasons why people may not see the need for creating a will. Below are 5 myths about wills that will be dispelled in an effort to encourage you to create a will.
Myth #1: I don’t need a will because I’m not rich.
You do not need to be rich to create a will. You can use a will to express how you wish for your children to be raised, how to distribute your jewelry, property, company shares or even bag or shoe collection.
A will is used to secure your assets after you die and also assigns an executor for your estate who is responsible for distributing your property to your beneficiaries. Wills are important because they allow your assets to be distributed to the people or organizations you want them to be distributed to. Wills also state the guardian of your children, thus making a will of key importance if you are a parent to ensure that your child/children are taken care of by the person that you believe is best.
Myth #2: I don’t need a will because my family will adhere to my wishes.
If you do not have a will, your family will not be responsible for dividing your assets, the state will. The laws of The Bahamas will control the distribution of your property. An administrator will be appointed under The Probate and Administration of Estates Act to handle the administration of your assets. The Inheritance Act will also apply if you do not have a will. Examples of how your estate would be distributed to your heirs under the Act are:
- your spouse will receive all of your assets upon your death if you have no children, or
- if you do have children, your children will receive half of your assets to be divided equally amongst them and your spouse will receive the other half, or
- if your spouse has passed and you have children, your assets will be divided equally between your children.
The state will not adhere to your wishes if you do not have a will. Thus, it is better for you to create a will than to die intestate (without a will) and allow the state to control what happens to your assets.
Myth #3: I cannot draft my own will.
While it is recommended that you engage an attorney to assist with the drafting of your will, you can draft your will on your own once you satisfy the basic requirements under The Wills Act 2002. Once you are 18 years or older and of a sound and disposing mind, you can create a will. In drafting the will, you should determine who you would like to distribute your assets for you (the executor).
The formalities that must be complied with when drafting your will are:
- It must be in writing.
- You, as the creator of the will (known as the testator or testatrix) must sign the will.
- Two or more witnesses must be present when you sign the will.
- The witnesses must also sign the will.
NOTE: The beneficiaries of your will (example, spouse or children) must not act as a witness, as this will render the gift left to the beneficiary in the will void.
Important items to include in your will are:
- Your full name and address.
- Your executor’s full name and address. (Note, the executor is responsible for making sure that any debts and creditors that the deceased had are paid off, and that any remaining assets are distributed according to their wishes.)
- The beneficiaries’ full names and addresses.
The basic information you will need before you begin to consider drafting your will can be found in the readings assigned for the Wife HER! Focus of the Month for February.
Myth #4: I can will an asset that I own jointly with another person.
While a will is used to distribute your assets, assets owned as a joint tenancy with another person are a bit more complex. These include bank accounts or property. The rule of survivorship will apply in this case. This means that the surviving owner of the asset will receive that asset when the co-owner passes away.
As it relates to property, there are two main types of co-ownership, joint tenancy and tenancy in common. You should ensure that you state in writing what type of co-ownership applies.
Joint tenancy allows each person to own the entire property. In order to deal with transactions relating to property with this form of ownership, all of the owners must act as a single owner. If a property is owned through this type of ownership, it cannot be left in a will for a person who is not one of the joint tenants, as the surviving joint tenant will automatically inherit the property.
Tenants in common allows each person to own a separate share of the property and not necessarily have to be equal shares. In relation to transactions such as the sale of the property, all of the tenants must agree. If you own a property as tenants in common, you can leave your share of the property in your will.
It is best to have a signed written agreement between both co-owners stating which type of co-ownership applies to the asset in order to make it clear to both parties what will happen when one co-owner passes away
Myth #5: My debts will be erased once I die.
Unfortunately, when you die your debts do not die with you. Before any gifts can be distributed to the beneficiaries of your will, debts must first be paid. Creditors are given priority after the expenses of the funeral and administration of estate are paid. Gifts that are made under a will without regard for debts and liabilities will be void.
To avoid your executor having to handle your debts when you die, it is best practice to take out life insurance, as this will assist in alleviating the financial burden on the ones you love when you pass away. If you want to begin saving money, you can track your spending by downloading Wife HER!’s Expense Tracker Printable.
Creating a will is more important than most people think. In order to ensure that your property is distributed in the way you desire and to ensure that your children are assigned the guardians that you believe are best, you should create a will.
Disclaimer: This article is not meant to serve as legal advice and should not be relied upon as such.