A good one helps you preserve and build your estate during your life and pass it on as you desire when you die. It may also save taxes and reduce expenses.

Young or old, single, married or separated, financially wealthy or not – planning is important. Effective estate planning is a continuing process that takes time and conversation – about your goals, priorities and qualities of life. It supports your financial and retirement planning.

What is estate planning?

Estate planning is a process of making decisions during your lifetime about the use, maintenance, and disposal of your assets (real estate, investments, bank accounts, cash, life insurance and business interests) and all the various forms of ownership and title that those assets may take. It involves people – your family, other individuals and in some cases charitable organisations of your choice.

As you plan your estate, you will consider:

a) How your assets will be managed for your benefit if you are unable to do so;

b) When certain assets will be transferred to others, either during your lifetime, at your death, or sometime after your death, and

c) To whom those assets will pass.

Estate planning also addresses your welfare and needs, planning for your own personal and health care if you are no longer able to care for yourself.

Like many people, you may first think that estate planning is simply the writing of a will. But it encompasses much more. A will is just one part of the planning process, but other documents (such as a properly drafted trust instrument) are needed to fully address your estate planning needs. In fact, estate planning is a dynamic process that will necessarily need adjustments every so often to reflect changes in circumstances.

What does estate planning involve?

In starting to consider your estate plan, you should ask yourself the following questions:

What are my assets and what is their approximate value? Whom do I want to receive those assets – and when? Who should manage those assets if I cannot, either during my lifetime or after my death? Who should have responsibility for the care of my minor children if I become incapacitated or die? If I cannot take care of myself, who should make decisions on my behalf concerning my care and welfare?

Why should I plan my estate?

Planning gives you peace of mind; your desires are recorded and your property will be disposed of as you want. A well-designed estate plan can save you and your heirs money, provide for children of previous marriages, nominate a guardian for minor children and establish a trust to preserve your assets for minor children until they reach the distribution age you set in a trust.

By taking the time and effort necessary to plan your estate, you will be able to provide for your immediate family; give your property to beneficiaries quickly; plan for your own incapacity (both mental and physical) and nursing in old age; minimise expenses for transferring property to your beneficiaries upon death; avoid disruption of your estate upon death; provide for people who need help and guidance; make sure your business continues smoothly and possibly reduce taxes on your estate.

How do I create my estate plan and what should my plan include?

Creating an estate plan starts with a careful analysis of what you own (or may inherit) and how you own your assets (real estate, securities, business interests, life insurance, retirement plan benefits and other property), and whether you should use a will, a trust, or both. With a properly tailored estate plan, you will be sure of the welfare of your family and the education of your children. You will know that your property will pass to your intended beneficiaries.

Dr Andrew Chetcuti Ganado is legal advisor at BOV’s Trustee Services Unit.

Bank of Valletta plc is licensed to provide trustee services by the Malta Financial Services Authority