As I write, I find that most people are more motivated to write their wills if they belong to any one of the following groups:
1. The Married, as they felt committed to their spouse and new family.
2. The Elderlies, as they don’t feel as immortal as before.
3. The Wealthy, as they have lots of assets and have good financial education.
It is still common to have a misconception that will writing is for the old and the rich, especially if you are in your 20s and just starting your career. Yeap, I myself had been there before and I even thought that will writing is for people that are ‘about to die’.
But of course, come to think about it, that thought is really old-fashioned.
Estate planning, which includes writing a will, is now a necessity even among all who are young and ‘immortal’ regardless of marital and financial status.
Thus, in this article, I’ll list down 3 major considerations for writing a will even if you think that you don’t have much assets today. They are as follows:
1. Do You Have a Bank Account?
Well, if you have at least 1 bank account, that’s an asset and you could consider writing yourself a will.
Of course, I believe it is normal for some in their 20s to have some liquid assets. They include cash, FDs and a portfolio comprising unit trust, stocks, cryptos and ETF investments made by robo-advisors.
The issue is not on ‘How much do you have?’
Rather, the problem lies in ‘Who would administer and inherit all of these if you suddenly pass on?’.
The absence of a will document shall create ambiguity.
Who knows what to do with these assets after you are gone?
Hence, a will document offers clarity and smoother administration of all of your assets as you can clearly appoint an executor to administer your assets and also nominate your beneficiaries, be it your parents, siblings, girlfriend or boyfriend, and even your charitable organizations, if you wish to.
Otherwise, the entire process to unlock, manage, and distribute your assets can be troublesome and time-consuming. This is because your family members (like your parents) will need to apply for the Letter of Administration (LOA) to unlock and manage your assets. This route shall take significantly more time to process as compared to you passing on with a valid will document.
2. Do You Have a Car?
Yes, if you buy yourself a car, you have a property.
But unlike cash, a car is not fungible. You can’t ‘karate-chop’ the car into 2, 3, or more pieces and have them distributed to your family members. To be practical here, I would say that you can specify as to who you would like to bequeath the car to in your will document. It can be either just one owner or multiple owners of your car. This is so that if your car is to be sold in the future, the car proceeds would be distributed to these ‘owners’ respectively and thus, eliminating doubt and ambiguity as all is stated clearly in your will document.
3. Do You Have a Property?
Some of you may buy a piece of property, be it for residence or for investment.
If that is your case, you should write a will to specify how you like your house to be managed upon your passing. You may have to consider if it is realistic for the house ownership to be bequeathed to your family members, especially if today, they continue to reside far away from the location of your property.
For instance, if you buy yourself a house in the Klang Valley, would it be realistic for you to bequeath the property to your parents who reside in Penang? So this can be either practical to some or not practical at all to some other people.
Here, if you think that this is practical, then, you could write a will to name your beneficiaries to your property.
Also if you think that this is not practical, then, you can write a will to state your wishes to sell off the property upon your passing and transfer the sale proceeds to your nominated beneficiaries.
4. But What If My Father Bought The Property Under My Name?
Then technically speaking, both you and your father should write a will each.
But here, let’s just place the focus on you.
So, if your father bought a property and obtained a mortgage under your name, it is likely that you are a joint-owner of the property. You might have a tendency to assume that your stake of this property could be transferred automatically to your father upon your passing or vice versa.
If you fail to write a will, 50% of your stake in this property will be distributed to your mother if you pass on as a single. Obviously, the problem is not big, if your parents have great relationships with one another. But, this situation could be a lot more complicated if your parents are divorced or if you don’t want her to be inheriting a stake in the property.
Of course, if you pass on after marriage, then, your stake in the property will be splitted to your mother, your spouse, and your kids in addition to your father. In this case, the administration of the property is made complicated due to having more joint-owners.
So, how do we address this problem?
Well simple, you can write a will and specify that your father would inherit your stake in the property if you pass on in the future. This would make your father a sole owner of the property, which makes the management of the property a lot more simpler.
All in all, I would say that it is not true that will writing or estate planning is only for the old and the rich. Estate planning has become an integral part of having a good financial plan and thus, is now a necessity for all.
Ideally speaking, it is wiser to have a professional estate planner to assist you in this area so that your assets could be managed and distributed more efficiently. You can start by filling up your details below to book yourself a short 30-minute consultation session to find out the latest practices to best protect your assets.