Kobe Bryant and Estate Planning
The news of Kobe Bryant’s tragic death in a horrific helicopter crash in
January along with his 13-year old daughter and seven other people, sent shock
waves across the world; his celebrity transcended basketball. With his passing,
Kobe Bryant left behind his wife Vanessa and three young children; one of them,
a little baby girl of just nine months.
Sadly, it takes a shock like this to bring to the fore the pressing need,
to prepare carefully for the welfare of our families after our lifetime. Kobe
Bryant’s estate plan has not yet been revealed, but I would like to think that
his family will be well taken care of, and without controversy or acrimony.
One would assume that someone so accomplished, with
considerable wealth, and who most likely had access to a team of financial,
legal and tax advisors, would have formalized his wishes for his personal
fortune and his business empire. The laws
of intestacy if he died intestate; that is, without a will, leave the courts to
determine the distribution of his estate. Under Californian Law, which experts
say will be applicable to his estate, assets will be distributed to the
decedents spouse and children.
Sometimes it takes a shock like this to remind us of the pressing need to
prepare carefully for the welfare of our families long after death. Estate plans are not just for the rich and famous, but
their celebrity does highlight powerful estate planning lessons that can apply
to each one of us.
Do you have an estate plan? The
vast majority of Nigerians do not. There is a reluctance to discuss this
certainty, with a fear of death causing many to procrastinate over an essential
part of a financial plan. Here are some estate-planning mistakes to avoid:
Not having an estate plan.
are several estate planning tools so it is inexcusable to do nothing. You have
loved ones, people you care about. Why would you put them through so much
stress in addition to the grief of losing you; it leaves them in a shroud of
uncertainty and confusion. Without specific
instructions from the deceased, an estate may be subject to long drawn-out
court battles as family members fight over the spoils. With our native law and
customs and an extensive extended family, estate planning is more important
will is the simplest estate-planning tool. It is simply a letter of instruction,
appointing someone to be in charge of your estate and specifying how you want
your estate to be distributed or divided.
2. Don’t die intestate
If you die intestate, that
is, without a will, the expensive probate process kicks in; your estate will be distributed
according to the laws of intestacy. This
process can be fraught with long drawn-out delays. This could be devastating to your spouse and children
with bills to pay.
There is a
fear of dwelling on our mortality that makes people postpone this important
task. If you are young and single, and have no dependents, it might seem absurd
to even consider the prospect of dying. The truth is that many young singles
are building extraordinary businesses that do need a succession and an estate
plan. Anyone with significant assets,
and a family to protect; children or a spouse, should at least have a will even
as early as in their 30s.
4. Not planning for minors and young
important to select a guardian for your minor children otherwise the courts will also decide who will
raise them; this may not be the person that you would have preferred.
you want your children to inherit money early? Young adults may get unfettered
access and control of their inheritance from the “tender” age of 18. Most 18-year
olds are not equipped to make the right financial decisions particularly for
large sums of money. In addition, inheriting too early has its challenges and
makes it difficult for some children to be independent, motivated or driven to
A trust is
an outstanding estate-planning tool; managed by a reputable trustee company, it
enables the seamless transfer of wealth to loved ones, controlling the
long-term distribution of your assets. With all wishes clearly spelt out,
beneficiaries inherit directly and expenses are minimised. An important
advantage is that designations of your assets are private. By relying primarily
on a will, bequests are public as wills are filed with the courts as a public
5. Leaving untidy records
your bank statements, brokerage statements, insurance policies, title
documents, etc? You can imagine a family in grief having to go through the
stress of trying to find a will or other evidence of estate planning. A will is
only useful if someone knows where it is. If it cannot be found, the courts
might assume that there is no will and then the long probate process will begin.
Keep your documents organised and secure; many families have lost property and
other assets as their loved one never disclosed it and there was no
documentation to prove ownership.
6. Failure to update an estate plan
evolves, estate planning documents and beneficiaries should be updated as your
financial and personal situation changes. Failing to periodically update
an estate plan or make changes to beneficiaries after a marriage, birth,
divorce, remarriage, death or other life changes can cause problems; this could
include disinheriting heirs. Buying and selling property or a business require
an update of your plan.
young man forgot to change the designation on his insurance policies; he had
put his father as sole beneficiary. His wife and three children inherited
nothing. Beneficiary designations on retirement accounts or insurance policies
should be reviewed to be sure they are actually in accordance with your wishes.
7. Not putting your wishes in writing
wish to make some special bequests to “trusted” servants, friends or members of
the extended family that might not otherwise be considered. It is important to
put all bequests in writing if you want them to happen. Alleged promises that
only come to the fore after your demise can lead to a lawsuit being filed
against an estate and unnecessary acrimony.
8. Not planning for estate taxes
planning will force your heirs to have to sell valuable property or precious
items because they just don’t have the available liquidity to pay those statutory
taxes. With careful estate planning during your life time, acquiring assets in
the most appropriate vehicles, taxes can be minimised whilst ensuring that legal
obligations are met.
to be clear about keepsakes and heirlooms
often fail to be specific about personal property in their estate planning,
which can lead to fights over precious family heirlooms, artwork, jewellery, a
grand piano and other items of sentimental value, from a tablecloth to a rug or
tea set! Who should get
what? Don’t assume that your lovely children will just share all your personal
effects equally without a squabble. Be as specific as you can, particularly for
10. Not leaving instructions
for your funeral
What sort of funeral would
you like? If you wish to be buried like royalty, do set aside funds
specifically designated for that purpose so that you can have the “befitting funeral”
that you deserve. Your descendants have enough to deal with emotionally and
financially without having to go into debt over outrageous funeral expenses.
Intestacy often leads to ugly
public rancour. Do the right thing. Tidy up your affairs. Death is a certainty
for one hundred percent of us. Don't leave your life’s work to chance. Plan instead
to leave a lasting legacy and not a family feud.