WILLS, INTESTACY, TRUSTS, AND THERE IMPORTANCE
Any business organization offering services or products to its customer faces various legal issues and concerns. For example; for any business to start its operations of serving the customers, it must be legally registered with the appropriate registration body within that country. A company must be registered with the company’s registration board which checks the credibility and level of business standards being followed by that company.
Apart from registration, business organizations must follow appropriate business ethics and standards. For instance, in a sole proprietorship which is owned by one person may come to an end when the owner dies. This may bring the succession process to be in a jeopardy situation especially if there was no will written. According to various studies done in the US, a number of family owned businesses as well as sole proprietorship businesses come to an end due to succession issues (Clifford, 2009).
To avoid issues which usually arise in many businesses after death of the owners, will writing has been embraced by various business entities. Many people and organizations are usually caught unaware by the issues concerning inheritance. This is because only few individuals and businesses are willing to write a will. No one tries to contemplate his or her own death. However, while considering the benefits which might be accrued from legal will, individuals as well as business entities; should form a culture and norms of writing wills. A will is a legally recognized document which is written by a person describing the manner in which he or she desires his or her property to be distributed after his or her death. One’s personal decisions on how own property should be used is legally respected and recognized by law. As a case a will is given the first priority during wealth distribution after ones death unless otherwise.
Intestate situation arises when a person dies without making any legally recognized document such as a will or description on how his or her property should be distributed. Usually in such cases, various conflicts arise and they usually end being settled in courts. In a business environment which involves various entities such as suppliers, customers, debtors and creditors among others, wealth distribution may be cumbersome. For example; creditors may demand part of the assets as a mean of compensation for the goods or services they offered to the business while one was in existence. Shareholders or family owners may resist the move to compensate the creditor who claim or allege to be owned by the deceased person. The same case may apply to debtors who may impede the move of paying back what they owed the deceased during his or her existence. Conflicts and disagreements usually prevail in intestate situation since the level of trust is significantly low.
Types of wills
There are various types of will which are applicable and suitable for different situations. These types are:
Handwritten or Holographic Will
This is a type of will created by an individual in a form of a formal and legally recognized handwritten document written by a person describing the manner in which his or her property should be distributed. Usually these types of will are simple, short and easy to understand since the person’s intent are included in the document. For the document to be legally recognized; one should be have been of sound mind while writing the will. Wills written by insane or mad individuals, cannot be presented in court to act as an evidence, of how the property should be distributed.
This is a form of a will where a person expresses his or her own desire verbally on how his or her own property should be distributed. Wills expressed through verbal means are rarely legally considered to be abiding as compared to the handwritten will. Various challenges face oral wills due to the following reasons. An oral will require a third party or a witnesses present during its declaration. Unless the words spoken are captured by a third party, the will becomes null and void in its applicability. Also, an oral will can easily be manipulated by witnesses to create some levels of biasness for malicious intentions. In most cases, oral will are followed and adhered to, due to fear of being haunted by the dead.
Joint wills are also known as mutual will and are formed or created by two or more people. In most cases mutual or joint will are formed by a couple which desires its property to be distributed in a particular manner. In most cases, property is jointly owned by married individuals and can prove cumbersome to divide the property between the two. To simplify the process of property distribution, the couple can write a joint will which encompass the whole property they own. However, this must be an agreement between the wife and the husband and must be freely entered without pressure from either of the party.
This is a form of a will which has a condition attached to it. For such wills to be legally recognized, the condition must be fully fulfilled. However, the condition must be within the law and acceptable to the society. For example; a will may stipulate that, property to be shared among the shareholders only after the creditors are paid. This is a condition and has to be fulfilled before the property is shared among the shareholders.
These are types of wills which have certain specifications or standards required by the governing law, in order for that will to be abiding. Such wills are in the form of writings, and a person is required to fill and give the required information essential to accomplish the elements of such a will.
Testamentary Trust Will
This is a type of will bequeathing ones responsibility, of sharing or distributing wealth or property among the living parties. The person bequeathed the responsibility is referred to as a trustee. This is because one trusts his or her own property to this person.
A person may desire to change some details in the will which had already been written. These changes may only affect part of the whole will. Instead of re-writing the whole will to incorporate such small changes, a codicil is written. This acts as an addition information to the overall will. For example; a property which was initially included in the will may be sold or terminated through fire hence requiring restructuring of the will. However, for a codicil to be legally effective it must be signed and highly correlating to the whole will.
Who should create a will?
A will can be created by any person as long as he or she meets the legally required standard. As a result, any will formed outside the governing law cannot be implement and such will are considered null and void. In general, there are necessary standards obligatory for a will to become effective. They include;
A person making a will must have attained the permissible age, which is presumed to be eighteen years. Any will written by a minor cannot be considered to be abiding since minors are always under the care of the parents or guardians. The person making a will must be of sound mind or upright mental status. Such a person should be clearly informed of what a will entails, the range of property he or she owns, the cohesion bond existing between the person and the family members and information concerning the beneficiaries. In addition, a drunken person is classified in the same group as a person of unsound mind. The mental status of a drunken person is highly questionable. However, such wills can become fully effective if they are approved after full recovery of their markers.
How to create a will for existing family members
Due to fear associated with death, various people are afraid to write or frame a will. However, the consequences of having written no will can be highly detrimental. In addition, sharing wealth among existing family members is a challenging task. This is because; the will may seem to be biased towards some family members while discriminating others.
The first step in creating a will for family members is through understanding who and to what extent are they linked to an individual. For example; a spouse and children should be given first priority while framing or creating a will. In most cases, property is distributed among the offspring if they are of mature age and able to care for the inherited property. One should consider inherence of his or her property by the spouse basing on the level of trust. In case, the spouse inherits and becomes irresponsible, the law intercedes instantly all for the benefits of the offspring left behind (Clifford, 2008).
A trustee can be embraced in situations where chances of conflict and irresponsibility may arise after a person dies. This is where a person appoints an individual considered of sober and sound mind to temporally hold and be liable for the property (Williams, 1848). This can be done in cases where the spouse is considered being irresponsible or where the child has not reached the age of majority presumed to be eighteen years. However, when the child acquires a mature age, he or she can acquire full control of the property.
Consequences of having no will
In the absence of a will, various repercussions and conflicts may arise. These conflicts are usually settled in courts where the governing law is used to determine how the property should be distributed. In most cases, family conflicts arise when a one dies without making any will. Such conflicts are solved in courts and may have negative and undesired effects to the cohesiveness of the family members. According to various studies done in developing countries, a number of deaths occurring annually are caused by unresolved conflicts which arise from inheritance issues. Such deaths can be avoided if the deceased had made a legally recognized will (Hull, 2005).
Dying without making a will, may make wealth be distributed to a member who may not be in capacity to manage or even utilize it aptly. In addition, the distribution mode may not conform to the deceased desires or wishes. As a result, this may leave individuals who would be beneficiaries from ones wealth from accessing or gaining from it. For example, a step son who might be much enough to handle appropriately property left by the deceased may be denied a chance. Much of the property may be inherited by another irresponsible offspring leading to its destruction (Kirby, 2004).
Most countries have rules or ways of dealing with cases of Intestacy. For example, in England, property of a legally married person who dies with no children and without making a will can be distributed in the following manner. Personal items which include houses, motor vehicles and other household goods with exclusion of those meant for business are inherited by the spouse. According to the worthiness of the estate, the spouse can inherit half of it while the remainder is inherited by the deceased parents. In case of any surviving parents, deceased brothers or sisters of the deceased obtain the portion. However, the inheriting brother or sister must be from the same father and mother with the deceased (Collins, 2003).
If none of these blood related persons is in existence, the law requires the property to be inherited by any other close relative. However, if they had a child, the property is automatically inherited by the child after all parents are no longer in existence.
Wills are legally recognized documents which enables ones property to be distributed according to his or her desires or wishes. In cases where a person dies without making a will usually referred to as intestate situation, various issues may arise. For example; conflict among the beneficiaries on who should inherit what. In addition, a certain property may be inherited by a person incapable of utilizing it to full capacity.
Though writing of a will accrues various benefits, very little people do so. The most commonly types of will embraced by individuals are oral and handwritten wills. However, a number of wills exist and can be embraced for effective wealth distribution.
Though, a range of will types exist, there are limits on who should write a will. A will usually acts as a contract and can be fully implemented only if the person making them has the required capacity. For example; the person should be of sound mind having attained the age of majority which is eighteen years old. Will drafted or created by minor, insane and drunken people are considered null and void since they have no capacity to write a will.
In cases where no will was written by the deceased person, the governing law automatically controls and regulates property distribution among the beneficiaries.