with Raziah Ahmed
while completing an annuity application, I asked the couple:
Whom do you wish to name as your beneficiary?
Simultaneously, the husband named the son, and the wife named
Five hundred years ago, the Law did not recognise the right
of a female to inherit, and, except in the case of some Arab
and Eastern cultures, attributed to women the same rights
as that of children and imbeciles.
Today, if you die without a Will, the State decides how to
divide your property, and such laws seek to protect women
and children in particular. However the opportunities to grant
bequests, or to leave legacies and gifts are pre-empted.
The persons who get inheritance according to State law, may
not honour desires of the deceased to give a part of the estate
to a Charity or to a poor relative. Such bequests are extremely
important, and oft-times serve to revere the memory of the
The document called a Will is a device for transferring estates
from one owner to others, upon the death of the owner. If
property is titled in such a way that another person on the
deed will become the rightful owner of the property, the Will
cannot alter that situation. This means that the Deed supersedes
any delegations in a Will.
A named beneficiary designation also supersedes a Will. This
means that in an insurance contract, for example, in which
there is a named beneficiary, a delegation in a Will for the
proceeds of the insurance will not be honoured, if the named
beneficiary is alive.
Debts, obligations and liabilities, can affect the disbursement
of property and funds, despite what appears to be titles of
ownership, or beneficiary rights.
A person can be named in a Will to inherit cash in a bank
account, or even a house in the village, for example, but
can be legally prevented from acquiring any such cash, or
property. Severe disappointments and family disputes can result
from such misunderstanding.
There are several reasons why this may happen. The most obvious
is that the property itself may have been assigned to a lending
institution, as collateral against a loan. Such an assignment
will prevent the heir named in the Will, or the named beneficiary
on the Insurance from getting the property.
In other instances, the deceased may owe creditors, and the
property may have to be sold off to satisfy those obligations.
In cases where the amount owed is less than the amount of
the proceeds, the balance will be paid over to named beneficiaries
To illustrate: assume an Insurance policy is assigned as collateral
for a mortgage loan, and the loan balance is $50,000, when
the insured dies; assume the amount of insurance is $300,000
and an adult child is a named beneficiary on the policy. The
assignment will override the named beneficiary up to the amount
of indebtedness, that is, $50,000, and the balance will be
paid to the adult child.
In practice, the entire sum of $300,000 will be paid over
to the lending institution. That institution will then honour
the claim of the named beneficiary, after it satisfies its
The assumptions, which we make about ownership and the way
the use of property changes over time horizons, require documentation,
to aid memory and re-planning to meet new needs.
As a group, females are living longer than males, and new
avenues must be found to maintain living standards or else:
the more things change the more they remain the same!
Next week we will examine some novel ways to transfer property
for an aging widowed population.
n Raziah Ahmed is a registered financial consultant