Times like these are a stark reminder that extraordinary events – which not only have a direct bearing on our daily lives but also keep resonating in the future – can happen without warning. We are reminded that thinking ahead for the unforeseeable future is important.

Patrick Spiteri

With this in mind, estate and succession planning, which often take a back seat in normal circumstances, gain great significance.

Planning how one’s estate is to be managed during one’s lifetime and beyond is no easy task. Envisaging what the future may hold is always very difficult, let alone planning for it. Who would have thought of planning for the scenario we are currently living in, up until a few weeks ago?

Like any plan, the first thing to determine is the final objective. What do you want the plan to achieve? With regards to estate and succession planning, while different people may have different objectives with their estates, typically this always involves an element which revolves around providing for one’s personal well-being and that of their family, especially during difficult times.

Planning ahead for the well-being of our families is challenging as one considers the various unexpected circumstances which may arise, such as broken marriages, serious illnesses or even sudden deaths, and the consequences these may have on our families and finances.

Matters can get even more complicated when one also factors in the size and nature of the estate, the number of family members and the relationship between them, and also any other particular wish one may have as to how one’s estate is to be managed and passed on to future generations.

Such complexities require flexible solutions which can keep up with ever-changing circumstances. The extraordinary times we are currently experiencing are proof of this and enforce the importance of estate and succession planning.

Trusts provide such a flexible solution, as the trustee, being the owner of the trust assets holds these for the benefit of beneficiaries and may be given the discretion to decide which beneficiaries are to benefit and in what manner, thereby enabling the trust to take into account the needs of the different beneficiaries and the changing circumstances in which they may find themselves in. The ability to have assets designated for particular family members, at appropriate times, in accordance with one’s wishes, is unique to such a trust arrangement. Such a structure would fit in nicely with one’s objective to benefit family members in case of dire needs.

By way of example, while a will is efficient to pass on assets to heirs, it is a one-time transaction which does not consider the needs of the heirs at that point in time. The obvious scenario in which a will is not as effective would be a young individual receiving his parents’ estate (or part thereof) all at once, with the risk that the young individual may not be mature enough to manage this estate and safeguard it for future needs. Trusts can resolve such inefficiencies. The same applies to certain life insurance products.

In a different context, trusts are also an efficient tool to cater for one’s own well-being. There may come a time when one is no longer capable to manage one’s own affairs, be it due to illness or old age. In such cases a trust may be set-up to see to your needs during your lifetime and thereafter to hold the assets for the benefit of future generations.

The unexpected is a looming factor which needs to be kept in mind. Estate and succession planning must be effective during the good times but more importantly during the bad days. In this respect, trusts have a unique ability to mould themselves in response to relevant circumstances.

EWS Trustees, as professional fiduciaries, have extensive knowledge and expertise to be able to help with such planning and individual circumstances.

This article was issued by Patrick Spiteri, director at EWS Trustees. For more information visit ewstrustees.com or e-mail contactus@ewstrustees.com.