Potential Questions to Ask When Preparing a Will

Estate planning is one of the most critical aspects of wealth management. Preparing a comprehensive and legally sound will require a nuanced understanding of a client’s personal, financial, and family circumstances. The process is not simply about distributing assets—it involves anticipating potential conflicts, optimising tax efficiency, protecting beneficiaries, and ensuring that the client’s intentions are fully respected.

For Family Offices, guiding clients through these decisions requires careful questioning and thorough documentation. The following questions provide a framework to ensure clarity, prevent disputes, and optimise the long-term management and distribution of wealth.

1. Asset Distribution Among Children and Descendants

One of the first considerations in drafting a will is how the client wishes to distribute their assets among their children and other descendants.

• Equal or Unequal Allocation: Do you intend for your children to inherit equally, or should distribution reflect specific needs, contributions to a family business, or lifestyle considerations?
• Specific Bequests: Are there certain properties, heirlooms, or other significant assets that you want to allocate to particular children or family members?
• Provisions for Grandchildren: Do you wish to allocate assets to grandchildren, perhaps through a trust or structured fund for education, entrepreneurial ventures, or future marital expenses?
• Special Considerations: Are any beneficiaries financially vulnerable or dependent, requiring additional safeguards?
• Contingency Planning: In the event a beneficiary predeceases you, should their share pass to their descendants, be redistributed among surviving heirs, or handled in another manner?

2. Lifetime Gifts and Prior Transfers

Understanding past and planned lifetime gifts is essential to avoid perceived inequities and ensure compliance with tax regulations.

• Previous Gifts: Have you already given substantial gifts to any family members? Should these be accounted for in the final distribution of your estate?
• Future Lifetime Gifts: Are there plans to make additional gifts while still alive, and should these be considered when calculating inheritances?
• Gift Documentation: Are all prior gifts properly documented to prevent disputes or confusion during estate administration?

3. Minimising Potential Will Contestation

Disputes over wills are unfortunately common. Proactively addressing potential areas of contention can reduce the risk of litigation.

• Likelihood of Challenges: Do you foresee any potential objections from heirs or other parties?
• Conflict Mitigation: Would you like to employ strategies such as pre-nuptial agreements, family settlements, or written communications to clarify intentions?
• Inheritance Act Clause: Would you consider including a clause conditioning inheritance on beneficiaries agreeing not to contest the estate’s distribution?
• Alternate Dispute Resolution: Are you open to specifying mediation or arbitration to resolve conflicts among heirs?

4. Trusts and Asset Management

Trusts provide flexibility, protection, and tax efficiency, making them an essential consideration for many estates.

• Trust Formation: Do you wish to place all or part of your estate into a trust for structured management, protection of vulnerable beneficiaries, or tax optimisation?
• Type of Trust: Should it be a discretionary trust, fixed-interest trust, or another structure?
• Trustees: Who will serve as trustees, and what powers should they have over management and distributions?
• Duration and Succession: Should trusts continue across generations, and how will successor trustees be appointed?

5. Liquidity and Asset Composition

Assets come in many forms, each with different implications for distribution and taxation.

• Liquid vs Illiquid Assets: How should liquid assets (cash, investments) versus illiquid assets (real estate, private businesses) be allocated?
• Tax Implications: Are there tax liabilities associated with certain assets, and should strategies be implemented to minimise these?
• Business Interests: If the estate includes a family business, how should ownership and control be transferred? Should shares be sold, retained, or placed under a trust?
• Asset Valuation: How should non-liquid or difficult-to-value assets be appraised to ensure equitable distribution?

6. Tax Considerations

A key component of estate planning is minimising the tax burden on both the estate and beneficiaries.

• Domestic and International Tax Exposure: Are there cross-border implications for beneficiaries, especially if they are US citizens or residents in other jurisdictions?
• Residence Transfers: Are you aware that transferring your primary residence may be tax-efficient in some countries but could create future capital gains or inheritance tax obligations for the recipient?
• Minimising Estate Taxes: Would you like to explore strategies such as insurance, charitable giving, or trusts to reduce estate or inheritance taxes?
• High-Value Assets: How can we structure the transfer of high-value assets to minimise tax erosion while maintaining control and flexibility?

7. Protecting the Estate and Beneficiaries

Ensuring assets are safeguarded for their intended purpose is critical.

• Conditional Transfers: Have you considered placing conditions on inheritance to protect against claims from ex-spouses, life partners, or creditors?
• Spendthrift Protection: Should measures be included to prevent reckless spending or ensure long-term security for beneficiaries?
• Insurance: Are there life insurance policies, buy-sell agreements, or other instruments to provide liquidity for taxes or debts?
• Digital Assets: How should digital accounts, cryptocurrencies, and intellectual property be managed and transferred?

8. Executors and Professional Advisors

Choosing the right executor and support team ensures the estate is administered effectively.

• Executor Selection: Who should serve as executor? Should it be a family member, trusted friend, or professional fiduciary?
• Powers and Responsibilities: Are there specific instructions for estate administration, including debt settlement, tax filing, and timely distribution?
• Advisory Team: Should financial planners, tax advisors, or lawyers be formally involved during estate execution?
• Continuity Planning: How will succession be handled if an executor is unable or unwilling to serve?

9. Healthcare and Personal Directives

Healthcare directives complement estate planning by addressing incapacitation.

• Health Care Power of Attorney: Who should make medical decisions if you cannot?
• Living Will: Do you wish to document your end-of-life care preferences?
• Integration: Should these directives align with the estate plan for consistency and clarity?

10. Communication and Transparency

Clear communication prevents confusion and builds trust among family members.

• Family Awareness: How much detail should heirs be informed of now to minimise future disputes?
• Documentation: Where should key documents—copies of the will, asset lists, insurance policies—be securely stored?
• Updates and Reviews: How frequently should the estate plan be reviewed to reflect changes in laws, finances, or family circumstances?

Conclusion

Answering these questions thoroughly allows a Family Office to construct a robust and tailored estate plan that balances fairness, tax efficiency, and asset protection. A well-prepared will serves as both a legal instrument and a strategic roadmap, ensuring that assets are managed, preserved, and distributed according to the client’s intentions. By addressing these considerations proactively, families can minimise disputes, maximise legacy value, and safeguard the long-term financial well-being of current and future generations.

Effective estate planning is more than a technical exercise—it is a strategic process that requires thoughtful reflection, meticulous documentation, and careful communication. By guiding clients through these questions, a Family Office not only protects wealth but also strengthens family relationships, enhances trust, and ensures a lasting legacy.

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Dan Dobry

Vice President PWFO