Safeguard your wealth to the next generation

More young people are making wills.  Law experts say the number of young adults aged between 20-30 that are making wills globally has increased by 63 per cent than before.

Oxfam wealth indicators show that about 2,000 billionaires to date have the same wealth as 60 per cent of the rest of the world. Only a few of those have managed to inherit wealth, which shows that some people know about preserving or concentrating wealth in their hands.

According to the National Social Security Fund (NSSF) perspective, wealth transfer is a way to empower members to make the wealth, preserve it and sustainably be able to pass it on to the next generation. 

The monthly dialogue focused on ‘Intergenerational Wealth Transfer Techniques’ was held in September to share notes on the need to safeguard wealth legally. Among the panelists that graced the day included Moses Segawa, Partner S&L Advocate, Charles Kasibayo, Administrative General and hosted by Agnes Tibayeita Isharaza, Corporation Secretary and head of legal NSSF.

“For a family to exist and preserve wealth for so long, they must have the next generation or numerical advantage,” Segawa says.
The second element is intellectual capital of the family or the quality of those members that you have in a family. Some families have mastered the know-how or skill. Part of what makes a family wealthy is being good at something and making sure that the skill continues across the generations.  
“It does not have to be monetary. Some families like the renowned Blick family have three generations of sports national champions that has ensured continuity of a phenomenon.” 

Therefore a family ought to define what wealth is to them and instil the determination to acquire the wealth. Charles Kasibayo reflects on wealth transfer techniques as a big component of inheritance. Giving a historical phenomenon, Proverbs 13:12 says: “A wise man shall leave an inheritance to his children’s children.”

In our traditions, each system had norms and customs that defined the transfer of property from one generation to another. It is only Buganda that had a succession law in 1912 which went on up to 1966. Here in Buganda, some of the customs preferred are the Will.

When is the right time? 
There’s no single answer to this, but one should start this process as soon as possible. If it is a legacy business, you must have a succession plan.
“Once you have the next generation, you have to begin training them in the ways of who you are, what is most important, what skill set is unique to the family or differentiating factor,” Kasibayo says.

Eligibility of a will 
One of the tools for estate planning is a Will. A Will is a legal document by which a person expresses their testamentary intentions or wishes about how estate affairs should be managed upon their death. 

For a Will to be considered legal, Segawa, a lawyer, explains, “It must be in writing; the testator must have testamentary capacity (above 18 years) and be of sound mind. In addition, it has to have two witnesses, must be signed by the testator or the testator has to put their thumb print or have someone sign it on their behalf in the presence of two witnesses.” 

For the unprivileged Will, Segawa explains, the testator has to sign a Will in front of two witnesses and they too have to sign in the presence of a testator. It is recommended to have lawyers because of complications that may arise during the process.

Charles Kasibayo from the office of the administrator General advises that a will allows a person to exercise that testamentary discretion. “You can also give property to persons who are not ordinary beneficiaries like people not related to you.” he says.
A Privileged Will is the concern for the armed forces applied while one is at the battlefield, openly speaking out or altering a Will exempted by law. 

As a prerequisite, a will ought to name its executors. Executors implement the will of the deceased and are exempted from the processes of the Administrator-General in accordance to Section 5 of the Succession Act. They have an automatic right to go to court and probate. However, when the Will does not name the executor, the Administrator-General must sit down with the family and choose an executor by issuing them a certificate of no objection.

Other techniques
For married couples, joint ownership of marital property is a tool they can employ because it enables you to avoid the process of transferring the land or applying for letters when a partner passes on. 
“In Joint ownership, you own the title together; the one party is entitled to receive the residual or the other’s share once they pass one automatically,” Segawa says, adding “this is a perfect tool to use if you understand each other.” 

However, this is different under Tenants in common, the survival ship principle does not apply. Property is either apportioned equally or defined by shares. The portion referring to the deceased would then be applied to estate planning and be handled according to the succession law.  

Another way wealth can be transferred is by gifting during one’s lifetime to complete the process. Sign the transfer as opposed to waiting for your death to give it out. The lawyer advises that one makes sure these properties don’t go into estate planning and this relieves the beneficiaries from going through probate.

In addition to that, there is gifting in contemplation of death. You are only allowed to do this in respect of movable property like a car but not land. Under this circumstance, the property gifted away will only be used by the respective party after the testator’s death. 
Nominations like pensions funds and life insurance policies are another tool. 

“You can structure a portion of your wealth by buying life policies for your children or beneficiaries as nominees. In doing that, one has alienated their property from the testator and it will go straight to the nominee after their death,” Kasibayo says. 
Estate planning is not a one-off process. You must constantly review your plan in line with the family situation. 

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