December 10, 2004

Article at Wall Street Journal

Set for Life: Finding the Will

SUNITA ABRAHAM IS 39, single and has no children. But she has written a will, just in case. "Basically to make things easier for my family," she says.

A professor at a major university in Asia, Ms. Abraham had heard "horror stories" of people trying to sort out the affairs of a relative who had passed away with no will, or with an unclear will. Should Ms. Abraham die, her brother, who she's listed as executor of her will, should have no difficulty dealing with estate taxes and other bureaucratic work, and her favorite charities will get part of her assets. Ms. Abraham's wishes are explained clearly in her will, which she drafted with the help of a lawyer.

For many elderly people in Asia, particularly those of Chinese descent, thinking about death -- much less writing a will -- is taboo. "They believe to think about death is to bring it," says Ang Kim Lan, associate director at Goodwins Law Corp. in Singapore. But for those in Ms. Abraham's generation, says Ms. Ang, writing a will is increasingly seen as a sensible move.

For good reason. Done properly, a will puts you -- not the government, courts or lawyers -- in control of how your assets will be dispersed after you die. There is, however, a right way and a wrong way to approach writing a will -- and no shortage of horror stories.

Juliana Ng, director of taxes for international private wealth services at Ernst & Young in Singapore, has seen it all. In one case, she says, a father wanted his seven properties split equally among four sons. "But how can you do that unless you turn them into cash first?" asks Ms. Ng. If the properties are sold, she notes, the family mightn't get the best value for them because of market timing. Alternatively, all four sons could be made co-owners of each property, but what if some wish to sell and others don't? Ms. Ng suggested her client amend the will to make it clear which son should receive which property.

In another case, anger flared between a husband and wife as they reviewed their wills. The husband, it emerged, was trying to ensure his third son would receive nothing. "I have to draw the scenarios so they (know how) to exclude certain people," says Ms. Ng, who adds that the desire to leave out specific relatives isn't uncommon. "I had one case where a wife said to her husband, 'I don't want your mother to receive anything at all.'"

Will-writing can trigger a range of emotions, from anger and bitterness to sadness. Joanna Tang, general manager of Rockwills Hong Kong Ltd., a will-writing service, has had clients break into tears as they consider what life might be like for a child should they perish. "This process is very emotional," she says. "They don't want to think about their death."

Despite the short-term emotional turmoil, writing a will can in the long run set your mind at ease. "Everyone, no matter how young or where you are in life, should get a will," says Ms. Ang, who recently had a client in her early twenties request help with a will.

If you die intestate -- meaning without having written a will -- the government will decide how your assets are allocated. Each country has its own formula for determining this, but there's a good chance it won't coincide with your wishes. If you die intestate, a court appoints the administrator of your estate, which takes more time and money than if you appoint your own executor. It could also leave you fully exposed to inheritance taxes.

To avoid such problems, says Roy Varghese, senior vice president of ipac Financial Planning Singapore, it is best to have a licensed lawyer help draft your will. Technically a lawyer isn't required -- cheap and easy online will-writing services abound -- but for the sake of saving a little money you could write an invalid will. "For what you'd spend on dinner and a hotel, you can ensure your affairs are in order," notes Mr. Varghese.

Ms. Abraham says she spent about $185 to draft her will with a lawyer after a financial adviser looked over the do-it-yourself will she had written a few years earlier. "My will is a simple one," she says. "Only a little bit of the language changed, but those clauses might be important."

"A lawyer can ask the right questions," says Mr. Varghese, "and can present opportunities for clarification. It's terribly important to deal with someone who can use their professional judgment."

In the case of a couple, for example, a lawyer might add a clause that stipulates what happens if they die simultaneously. Complicated wills can, however, add up in cost when drafted by a lawyer. While Ms. Ang charges about $185 for a basic will, she has billed clients more than $600 when intensive research was required -- and she knows of other lawyers charging $3,000 or more. For those who want to avoid the lawyer fees, there are alternatives.

Rockwills, a financial planning group that operates in Malaysia, Singapore and Hong Kong, has written more than 48,000 wills since its founding in 1995. Although customers don't deal directly with a lawyer -- a company representative helps them with the paperwork -- there is a lawyer in the processing center who, the company says, checks the validity of each clause and suggests amendments if necessary.

For a basic will, the company's Hong Kong division charges about $100, plus an additional $45 for the first year of a custody service in which the will is kept in a safe place. (After the first year, the custody service is optional.)


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Set for Life, Personal Journal's personal finance column, explores the more emotional aspects of wealth creation, from dealing with money conflicts within relationships and saving for your children's education, to collecting.