The COVID-19 pandemic has sparked increased interest in estate planning among Bahamians, a long-serving trust professional says.
Dianne Bingham, Leno Trust’s managing director, said she is receiving a record number of inquiries from persons “wanting to have a plan in place” for the transfer of assets to children, spouses and others they wish to legally protect.
Explaining that the COVID-19 pandemic is forcing persons to focus on their vulnerability and mortality, she said: “Though always a factual reality, COVID 19 has pushed the reality of our vulnerability and mortality to the forefront once again.
“People of all ages and income levels are inquiring about structured planning and taking action to legally protect loved ones should something happen to them as a result of COVID-19. We have experienced episodes of rampant diseases, hurricanes, natural disasters and each one forces persons to stop and reflect on their vulnerability and mortality.
“This current pandemic, which has again highlighted the need to always be prepared, has manifested into inquiries by Bahamians from all levels of society reaching out to discuss succession planning. We are hearing a sense of relief in learning that there are solutions including trusts and other asset holding structures available to successfully address this concern.”
The increased interest in estate planning as a result of COVID-19 is not limited to The Bahamas. Concern with preparing for the future has driven activity to websites, with one US-based estate planning platform reporting a better than 120 percent jump in inquiries in just a few weeks.
The virus, which still has no known preventative vaccine, has already taken more than 200,000 lives worldwide since it was first reported in Wuhan, China, in late September. There have been some 3m confirmed cases world.
Mrs Bingham, meanwhile, warned against Bahamians rushing into poor choices in the haste to protect their hard-earned assets for future generations.
“While I am pleased that millennials, who normally give little or no thought to asset planning, are now taking it seriously, I encourage them to take time to understand the trust concept and the important difference between naming a friend you believe will do the right thing after you are gone versus the benefits of appointing a corporate trustee,” she said.
“The corporate trustee, in addition to having professional experience, provides guarantee of continuity and regulation, being held to a higher standard. There is a reason why those who have substantial assets to protect do so through a corporate trustee.
“Sadly, many with fewer assets turn to a friend or relative with no training or experience managing assets, who may not survive for the required period,” Mrs Bingham explained. “Strange things happen to people when they suddenly get their hands on money they did not earn themselves. Many who have the best intentions initially end up not protecting the ones they were charged with looking after.”
Oversight for the individual is his or her own integrity, she explained, while oversight for the corporate trustee is through internal and external regulation. Layers of internal control create checks and balances for the corporate trustee, who must also fulfill reporting and transparency requirements.
“Bahamians, by and large, are far more aware these days of the value of a trust, which avoids the lengthy process of probation, allowing transfer of assets to loved ones the way the creator of the trust intended,” said Mrs Bingham.
“There is still a way to go in educating the public about the difference between naming a friend or relative and appointing a corporate trustee. You can think of it this way. When you need your vehicle repaired or dental work, you turn to the trained professional. Why would you do any less when it comes to something as important as your family or loved ones’ financial future?”
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