People do not like to think about death. What they fail to realize is that when they’re gone, they can’t tell their loved ones their wishes. If they don’t state how they would like their estate to be distributed, the law will do it for them.
What happens without succession planning?
When a person dies without distributing their estate through a valid will, they are to said to have died ‘intestate’. If a person died intestate, the law divides up their estate based on the people they leave behind. For example, under the Administration of Estates Act, if a person dies leaving a wife and two children, the wife would inherit half of his estate and the other half would be shared equally between the two children.
Now, this wouldn’t really be an issue if the only thing left behind were money. But it gets more complex if there’s properties, cars, jewelry etc. Using our example, the wife would be entitled to a half share in each of those things and the children would have a quarter share each. Think about it. Three people have shares in one car, one house, one gold ring – might not exactly bring the family together.
Apart from material matters, succession planning is important for other things. For example, if you have young children, who would be their guardian if you weren’t there? What about their financial needs? Succession planning addresses all these important issues.
No one wants to think about their death but it is worthwhile to plan for those we leave behind.
Disclaimer: While written by attorneys, none of our articles propose to give legal advice. If you have a legal issue, you should seek advice from a qualified attorney with respect to your unique circumstances. A particular outcome can never be guaranteed – each case turns on its own facts.
Found this article interesting? You can read more on this topic here. If you have children, you may also be interested in learning about testamentary guardianship.