A Beginner’s Guide to Estate Planning and Wills
Estate planning is one of the most important steps you can take to protect your loved ones and ensure that your assets are handled according to your wishes. Whether you’re preparing for retirement, have recently started a family, or simply want to make sure your affairs are in order, estate planning and drafting a will are critical legal steps.
In this guide, we’ll walk you through the basics of estate planning and why having a will is essential for ensuring your legacy.
What Is Estate Planning?
Estate planning involves organizing your personal and financial affairs to manage your assets in the event of death or incapacitation. It covers the distribution of your property, money, and possessions according to your wishes. Additionally, it can include health care directives and appointing guardians for minor children.
Proper estate planning ensures that your loved ones won’t have to navigate complex legal issues during an already challenging time. It helps prevent conflicts and ensures that your property and assets are divided according to your wishes, avoiding the lengthy process of intestate succession, where the court decides the distribution of your estate.
The Importance of a Will
A will is a key component of estate planning. It’s a legal document that outlines how your property, assets, and even debts will be handled after your death. Without a will, the law decides who inherits your estate, which may not align with your wishes.
Having a will allows you to:
- Name beneficiaries: Designate who will receive your assets, whether it’s family members, friends, or charitable organizations.
- Appoint guardians: If you have minor children, you can name a guardian to ensure their care.
- Manage debts: Specify how outstanding debts will be paid from your estate.
- Avoid disputes: A clearly drafted will can prevent family disputes over your assets.
In Sri Lanka, wills are governed by the Wills Ordinance, and it’s advisable to work with a legal professional to ensure your will is valid and comprehensive.
Steps in Estate Planning
- Assess Your Assets Start by listing all your assets, including property, savings, investments, and valuable personal possessions. This helps you understand what needs to be distributed in your will and how to handle taxes or debts.
- Identify Your Beneficiaries Decide who you want to leave your assets to. These can be family members, friends, or even charitable organizations. Consider how you’d like to divide your estate, and if certain people will inherit specific assets.
- Appoint an Executor An executor is the person responsible for carrying out the terms of your will. This could be a trusted family member, friend, or a legal professional. Ensure that the person you choose is trustworthy and capable of managing your estate.
- Prepare a Will Draft a will that clearly outlines your wishes. While DIY will kits are available, working with a lawyer ensures that your will complies with legal requirements and reduces the risk of challenges to your will after your passing.
- Review and Update Regularly Life circumstances change—marriages, divorces, births, or financial changes may affect how you want your estate distributed. Regularly review your will and estate plan to ensure it reflects your current wishes.
Why You Should Start Estate Planning Now
Many people believe estate planning is something to be done later in life. However, it’s crucial to start as soon as possible, especially if you have dependents or significant assets. A solid estate plan ensures that your family is taken care of if something unexpected happens.
Even if you are young and healthy, having a will gives peace of mind that your wishes will be respected, and it prevents legal complications for your loved ones. Moreover, estate planning isn’t only about death; it also includes directives for what should happen if you become incapacitated due to illness or injury.