Estate planning in Ghana is governed by a blend of statutory law, customary law, and, in some cases, religious principles. Key legislation includes the Wills Act, 1971 (Act 360), the Intestate Succession Law, 1985 (PNDCL 111), and the Administration of Estates Act, 1961 (Act 63).
Many, in Ghana and elsewhere, appear to underestimate the importance of estate planning during their lifetime. However, it is a critical step to ensure your affairs are in order before the inevitable occurs. Whether you are wealthy or have limited assets, an estate plan can provide peace of mind and safeguard your family’s future.
Here are five compelling reasons why you should consider creating an estate plan while you can:
1. Protect the Future of Your Loved Ones
It is not uncommon for family members to clash or engage in lengthy legal battles over the distribution of a deceased relative’s assets. To avoid such conflicts, estate planning is essential.
An estate plan allows you to allocate your assets to your chosen beneficiaries, ensuring that your spouse, children, family members, and dependents are adequately provided for. With the help of a lawyer or estate planning professional, you can prepare a will, establish trusts, and designate beneficiaries. You can also appoint trusted individuals as guardians for your minor children, if applicable.
In Ghanaian culture, one of the most significant benefits of estate planning is its potential to minimize family disputes. A well-drafted estate plan clearly outlines your wishes, reducing the likelihood of misunderstandings or conflicts among beneficiaries.
2. Reduce Stress or Bypass Probate Process
Where a person dies having executed a will, the individuals appointed as executors must apply for probate to manage the deceased’s assets. Where a person dies intestate (without a will), the court shall grant letters of administration upon an application by qualified parties, to authorize the distribution of assets. Both processes can be lengthy, complex, and costly.
Estate planning can alleviate these challenges, saving your loved ones time, stress, and money. One effective strategy is to establish trusts during your lifetime. Trusts enable you to effectively transfer assets to beneficiaries while bypassing the probate process, simplifying asset distribution and reducing the potential for disputes.
Additionally, an estate plan ensures that your beneficiary designations are up-to-date, allowing assets such as life insurance policies, retirement plans, and annuities to pass directly to beneficiaries without probate.
3. Minimize Tax Burdens
One of the most significant advantages of estate planning is the potential to reduce tax liabilities for your beneficiaries. Without proper planning, beneficiaries may face substantial estate duties or taxes.
An effective estate plan can include strategies such as gifting assets during your lifetime, which can help lower the overall tax burden on your estate. By taking proactive steps, you can ensure that more of your assets are preserved for the usage and enjoyment by your loved ones.
4. Ensure Business Continuity
For business owners, a well-structured estate plan with a succession strategy is crucial to ensure the seamless operation of the business after your passing. Without a plan, the future of your business may be uncertain, risking its survival.
A succession plan involves identifying and training a successor, outlining how ownership will be transferred, and establishing management structures to maintain efficiency. This ensures that your business continues to thrive and provides for your family, employees and other dependants.
5. Potentially Prepare for Future Incapacity
An estate plan is not just about what happens after your death—it also addresses situations where you may become incapacitated and unable to make decisions.
Through tools like a durable power of attorney, you can designate someone to manage your financial and legal affairs if you are unable to do so. You can also appoint someone to make medical decisions on your behalf, ensuring that your treatment preferences are respected and honered.
Conclusion
Estate planning is a vital step to secure your family’s future and protect your legacy. By addressing key areas such as safeguarding the interest of loved ones, simplifying the probate process, reducing taxes, ensuring business continuity, and preparing for incapacity, you can create a comprehensive plan tailored to your needs.
At August Law, our estate planning team appreciates the importance of the estate planning process and is dedicated to guiding you every step of the way. We are here to help you create a customized estate plan that ensures your wishes are legally documented, tax liabilities are minimized, and disputes among beneficiaries and loved ones are prevented or reduced to a minimum.
Consult us today to take the first step toward securing your family’s future.
