Once your start working, you start earning. The first thing that you should consider doing, if you have not done so already, is making a will. Granted, the law of intestacy (dying without a will) allows for your family members to divide your assets according to a set formula. So can you get by without making a will?
We would say that making a will is compulsory, if not obligatory. Your spouse and kids will thank you for it. Just look at some of the legal battles that have taken place in this space. Hong Kong’s richest woman, Nina Wang, left her family a huge fortune — and a ton of legal battles. Likewise, India’s richest man, Dhirubhai Ambani, also left his sons, Mukesh and Anil, a large fortune — and a host of brotherly arguments.
If you think making a will is not necessary
If you pass away without making a will, the Distribution Act 1958 allocates a certain share of your estate for each category of the following: your parents, your spouse, and your children. That means division of your assets can potentially go on auto-pilot without you making a will.
It’s pretty simple if your estate comprises only of money. Each of your beneficiaries gets their percentage according to the Distribution Act 1958.
But what about land and houses, and other properties? Can you imagine having your house being divided among your children, your spouse, and your parents (if they are still around)?
If your beneficiaries can reach an agreement among themselves, they can inform the court that they wish to, either:
a. Give all their share to a certain party;
b. Follow the Distribution Act 1958; or
c. Follow a certain agreement among the beneficiaries.
But if they cannot reach any agreement, then it will be trouble!
One example we like to give is, if the deceased person has 5 children and a wife. He passes away leaving 3 houses. Without a will, each of the houses should be transferred to the 5 children and the wife. It will be difficult for any one of them to deal with the property on their own, as it is collectively owned.
By the time it goes to the second generation, imagine that each of the 5 children’s children will then become part owners of each of the houses.
It can get quite messy.
Far better it is, to arrange for house A to go to certain children, house B to go to certain children, and house C to go to the wife (or certain children). This solves the problem of difficulty in dealing with the property.
So that’s why making a will is important
It becomes even more important when you’re rich, because there’s going to be a lot of wealth involved.
A will probably won’t cost too much and will provide you with peace of mind.
But if you get remarried, or divorced, you’ll probably need to make a new will.
We cover family law in our legal practice and would be happy to help you.