Objectives of Estate Planning
- Concept of estate planning
- Applicability of Estate planning
-When estate owner is still Alive
-After estate owner death
MEANING OF ESTATE
The literary meaning of estate is the net worth of a person at any point in time a live o dead.
In legal meaning it refers to a property, the term property has no Universal agreed definition.
In the case of HENDERSON VS SECRETATRY OF ESTATE OF SOCIAL SECURITY (1998) The term property was defined as
àthe legal estate or IN LEAGAL MEANING
all equitable interest in land
From the legal point of view the word property has two meaning Normally
First meaning is an Object of Ownership. AND the Second meaning is the right of Ownership
–Property as a right; Refers to the Right of ownership over the property for example lease. Therefore, property is not a term of art but it takes its meaning from its context and collection in the Par amatory Acts.
-its concept that refers to the rights obligations and the restrictions that gains the relationship of a person and things of value
MEANING OF ESTATE PLANING.
Is the process of arranging for disposing of an estate either by investment through business planning or power of attorney in case of estate owner is unable to care for one self or through a will for the beautiful of the family members or other in case of estate owner dies
SUBJECT MATTER OF ESTATE PLANING
What are things to be included in Estate planning. The Answer is simple All estate which makes your one Estate
Estates includes
- Personal and real properties
- Securities
- Bank accounts
- Stocks and bonds
- Insurance proceeds
- Retirement Account
Due payments like tax refunds and outstanding loans owned either by person or wholly by the estate owner.
-After identify the assets it is important then to assert their values
-The value of assets after deadline debts is regard to the fair market value of such assets
–IMPORTANCE OF ESTATE PLANING
-Helps the estate owners to know and where passive minimum tax liable through tax planning
àTAX PLANNING is defined as an art of arranging transactions with the knowledge of tax principles to actual tax effective and lawful rooting of business activities internationally. ref section 92. Of income tax act
NATURE OF ESTATE PLANING
As we have seen early estate planning is all about what the estate owner wishes to do with his/her property while incapable due to old Age or descendent of his or her estate offer death to prove he/she wishes.
WAYS OR THE DIVISIONS OF ESTATE PLANING
1)Planning before estate owner due
2)Estate Planning after estate owner dies
1; ESTATE PLANING BEFORE ESTATE OWNERS DEATH
Estate planning before the owner of estate death; this refer to the planning proses that the estate owner may consumes fir to underestimate while he is still a live with the intention of preparing his self or herself against in capacitation in life.
-to do this the estate owners should prepare plan to the owner’s contingences of life in case they happen
– This can be done by considering the three questions stated below this
a) how and by whom assets will be managed for your benefits during your life time if your become an able to manage then your self
b) How and when your personal care will be managed and how health care decision will be made during your life time if you become un able to care for yourself
c)When and under what circumstance it may make sense to distribute your assets during lifetime?
-In responding to the above questions, you may plan to the estate before the numbers of things to be taken into considerations
Such as
- investments of estates
- how will the estates be advantages to the estates owners when he or she is incapable physical or mental?
- what’s points in life time will be appropriate to distribute the estate before death
-Considering the above powers of making decisions three aspects are normally.
- Investments of the assets of estates owner as the owner of the estates planning
- Estates planning for ……………………………..
- Distribution of estates planning where the estates owners is still alive
- INVESTMENTS OF THE ASSETS
An investment of the estate’s owners’ assets can be looked in to three
1)trust
2)business planning
3) Social security or insurance system
1.TRUST AS ESTATE PLANING
Trust is a complex legal concept which cannot tribulated in relation ship
-such relationship is coming the settler trusties and the beneficiaries
-trust can either be personal or public trustee
-however, in some cases a combination of private and public trustee from called hybrid trustee
-under Islamic laws a person can make such a kind of trustee as a mean of estate planning and its advantages
IMPORTANCE ON FAMILIY LEVEL
1)It helps to prove for management of the offers of the wo are mental or physical and capable or who are spend theft or who are may be young or old
–this can be done by the estate owners who he or she wants to protects by the trustees
a) it helps to protects the law of succession operating to most of the decease property absolutely in his adult children who could then despite the proper trust that can be made either interview through special instruments or after the death of the deceased what over the way they may be adopted the trust can be used to protect equal to all deceased
b) it helps to prevents and generates family properties for many generations. Trust can be used to presence and to generate family property for more than three generations this ism possible because trust helps to avoid divisions of assets into smaller shares
BUSINES LEVEL
1)It can be used to formulate a person schemes like NSSF, PSSF and others schemes for retired employees.
Trust can be used to create a fund where by where by the board of trustee manages they may be paid by the employer and employee out of the contract of employment.
The rated employee can receive a percentage of his salary or lamp that used to porches an Annity
2)it can be used to formulate collective investment scheme such as unit trustee. A trust can be used as open-ended collective investment in which the value of the assets, held by trustee to the order of the managing trustee
3)it can be used to formulate a collective trust for holds of bonds or debentures stocks in this case a trustee has the benefits of borrower promise to reply the loan collective produced by a group o.
-when closing the estates owner as to the whether there is the need to form the trust or not the lawyer must make sure that the effect of taxation on trust has been carefully ascertained and the estate accordingly
3)business as the planning
The estate owner may wish to use his or her estate to generate more or preserve his or her estate for his or her own benefits of his or her beloved ones through business
-the best way to adhere this is to the estate owner should choose and form the best business entity
-as far as the business law is conversed a person can issue through business in the selling ways
A) proprietorship (sole trader)
b) Partnership
c)Company
A; PROPRIETORSHIP (SOLE PARTINER)
The law governing properties or sole trade is the registration as the registral
-this is simplest from the business organic it is business belonging to one person only thus is the sole trade
– a sole trader is responsible in matters relating to his business and he can sue or be sued in his own name
-to decide whether this form of business is suitable to the estate owner the following and it must be taken to the considerations
ADVANTAGES
1)to solve traders to receive all profits alone. This is because the sole trader does not share his business with any person
2)it is easy to establish business in relatives for a legal compliance and formulates on its registrations.
3)it is the most flexible business organization compared to other forms of business-like companies and partnership. For example, the sole trader can be easy shift from one business to another.
4)the sole trader is free to make any decision concerning the business. This is because there is no external influence or control of the business other than market pressure
5)The tax payable is relatively low compared to other forms of business
DIS-ADVANTAGES
- Its difficult to deal with the risk that are relating to the business ‘
This is because only a sole trader is responsible for the business here it is different sometimes to get assistance from other people.
- Moreover, the ability of raise capital is limited to personal funds hence increase the risk of business
- Lack of continues of the business in most case once a sole trader dies
To business. This is because the sole trader is the only person who knows the nature of the business
B; PARTINERSHIP the law governing is the law of contract Act
-The partnerships formed by special document called partnership deed and articles of partnership in section 190 of LCA
C; COMPANY. The estate owner may choose the form of the company which
Members of share holders by doing so the estate owner can use the opportunity through the company to pressure or generate more wealthy for his or her family
-however, when the estate owner chooses any form of the business income with issue of taxes should be carefully.
3. S0CIAL SECURITY.
Example of social securities
-NSSF
-PSPF
-PPF
-LAPF
-NHIF
-PSPF
Social security act so auto counted in a state planning to members through contributions made to the schemes especially such members who are unable to help themselves due to old age.
-therefore, social security’s schemes act as automatic estate planning to members through contribution made to the schemes especially such members who are un able to helps themselves due to old age or illness or to the family members after death
-Also social securities is used as a main of nomination whereby its members to be able……………………..
5) INSUARANCE SYSTEM
The insurance system in Tanzania is regulated by the Tanzanian insurance
regulation authority (TIRA)
-TIRA is established under the section 5 of the insurance act. 5(1) and also section 5(2) of insurance Act
-By virtue of TIRA has a statutory power of regulate and monitoring the insurance business in Tanzanian
S.03 again define the life insurance, this means the business of easy the obligation of insurances classified under section 36 of transaction of a long-term borrower
Why is life assurance is an estate planning?
àthis is because human life is very, very precious and it can not be measured with a sum of money.
-Taking life assurances is like to compensate some members to the insured person. To appreciate that life is assurance is the one of means of estate planning
àlet us look at process of issued by different insurance companies. National Insurance Cooperation.
a. Whole life profit
b. Whole life with limited payment with profit
c. The endorsement with or with out profit
d. Education with profit or without profit
e. the anticipated endorsement assurance police
f. Term assurance
g. super life…………
other products
a) Fixed term endorsement
b) fairy income product
c) Fairy protection
d) Education ……………………
Personal Products
a) life insurance
b) Funeral cover
c) trade insurance cover
d) critically illness cover
f) Group products
g) group life
h) credit life assurance
ADVANTAGES OF HAVING LIFE INSURANCE
-It helps estate owners who have not accumulated enough assets for his family to protects insurance against the contingencies of life through different assurances products
-Life assurances can usefully in paying estates taxes. Other estates settlements and estates taxes
– life assurance helps to recover the business from the loses of key from un employees
-Insurance can help to create the sake instants for the family securities
Estate planning for medical disabilities
Medical disable refers to the situation that the estate owner is either physical or mental incapable
-Medical disabilities in relation to estate planning can be explained in to two ways
1) ESTATE OWNER this estate owner is physically incapable but he or she mental capacity but his or her mental capacity is till sound and effective
2) where the physical disabilities lead to the mental incapacitation of the estate owner
Estates Owner where the estates Owner still have the Mental Capacity
–in the situation where the estate owner is physical incapacitate by disease but is mental capacity is still good perfect
-he can make a power of attorney for someone to work for him
-power of attorney is an instrument which gives another person power to work for you
-power of attorney is a legal instrument which grants power and authority
Responsibility of an attorney
Here we mean that one person is appointed as an attorney he/she is placed in apposition of a trustee where by where by the estate owner is settle while the attorney is benefits on behalf of estate while is settle.
At the time the power of attorney becomes effectives the attorney will have been responsible
1.to do things which the state owner was actually do as his duties
2. the attorney is not allowed to deal with his or her duties to another person unless authorized by estate owner
3. he/she keeps up to date information concerning the offers of the estate owners.
This includes keep proper research And
AFFIRMATIVE
The estate owner can appoint joint attorney and save the attorney to act together
-the joints attorney must always act and work together
-the advantages of appointing joint attorney will helps to avoid fraud
The power of attorney can include
–-taking care of the bank’s accounts
-savings
-and all, other
The reason to make power of attorney is manage the offers of estates owner
àwhere the donor is disabled or temporary for a long time
àwhere the donor is outside the country for a while and where the donor is un able to make decision for one self-due to mutual illness or old age.
TYPES OF POWER OF ATTORNEY
1) General Power of attorney
2) Specific power of Attorney
GENERAL POWER OF ATTORNEY
-The general power of attorney in in scope and duration and permits the attorney to act as legal representatives of estate owner in all matters about the estate.
-this general power of attorney means its scope is less limited but the general power is to work on behalf of him
-total different form the specific power of attorney
APPLICATION FOR A POWER OF ATTORNEY
(SECTION 96)
WE, AUGUSTINO LYATONGA MREMA of P. O. Box 14611 Dar es Salaamand……………………………………………………. of P. O. Box 14611 Dar es Salaam,being respectively the Donor and Donere of a Power of Attorney dated 7th day of January 2022, DO HEREBY apply that such Power of Attorney be filed in accordance with the provisions of Section 96 of the Land Registration Act [CAP. 334 R.E. 2019]
Dated at Moshi 7th day January 2022
ASIGNED and DELIVERED by the said
AUGUSTINO LYATONGA MREMA who is known
to me personally/identified to me by……………………… __________________
the latter being known to me personally in my DONOR
presence this 7th day of January 2022
BEFORE ME:
Name:……………………………..……………………
Signature:……………………..…………….…………
Postal Address:………………………………….…..…
Designation: Advocate, Notary Public and Commissioner for Oaths
SIGNED and DELIVERED by the said JOHB
AUGUSTINO MREMA who is known to me
personally/identified to me by………………………………….. ______________
the latter being known to me personally in my DONEE
presence this 7th day of January 2022
BEFORE ME:
Name:……………………………………….…………
Signature:………………………………….…………
Postal Address:…………………………………..…
Designation: Advocate, Notary Public and Commissioner for Oaths
SPECIFIC POWER OF ATTORNEY
This is also known as the special power of attorney. this is the power which the user is limited in some aspects
-this power is for the specific purpose and not general purposes it has the limit or the scope of this power
-if the donor wants to make the specific power of attorney he/ she must make sure that the power of attorney is drawn up very care fully so the Attorney General could be clearly understanding you on what you applied for
DRAFTING THE POWER OF ATTORNEY
| SPEFIC POWER OF ATTORNEY |
TO ALL IT MAY CONCERN
BY THIS POWER OF ATTORNEY
GIVEN THIS 27th DAY OF JULY, 2020
I …………………………………………….. an adult, male of sound mind,of P. O. Box 161 Moshi–Tanzania. Do HEREBY appoint ………………………………………………. of P. O. Box 161 Moshi–Tanzania, to be my true and lawful Attorney for me and in my name, AND THEREAFTER to do and execute all or any of the following acts, deeds and things, with respect to the two accounts which I opened at CRDB Bank as a guardian of ……………………………………………………………………………….) and ……………………………………………………………………………………………….. that is to say:
- That the said Attorney shall have the access to deposit or withdraw money freely without any restriction or requirement of my signature.
- That the said Attorney shall receive bank statements, notices, similar documents or other information regarding the accounts.
- That the said Attorney shall request and agree to any additional services which she believes appropriate relating to the accounts.
- That generally, the said Attorney shall do other lawful work in connection with the Accounts if any and to say on my behalf anything that I may say in relation the accounts.
SIGNED and DELIVERED at Moshi
by the said …………………………………… who
is known to me personally/ Identified _________________________
to me by_____________________________ DONER
this 27th day of July 2020.
BEFORE ME:
Name:____________________________________
SIGNATURE:_____________________________
ADRESS:_________________________________
DATE:____________________________________
QUALIFICATIONS: COMMISSIONER FOR OATHS
ACKNOWLEDGEMENT
…………………………………………. doth hereby acknowledge and accept to be Attorney of the said……………………………………………………. under the terms and conditions contained in this POWER OF ATTORNEY and I promise to perform and discharge my duties as the lawfully appointed Attorney faithfully and honestly.
SIGNED and DELIVERED at Moshi
by the said ……………………………… who
is known to me personally/ Identified _________________________
to me by_____________________________ DONEE
this 27th day of July 2020.
BEFORE ME:
NAME:____________________________________
SIGNATURE:_____________________________
ADRESS:_________________________________
DATE:____________________________________
QUALIFICATIONS: COMMISSIONER FOR OATHS
TERMINATION OF POWER OF ATTORNEY / THE RVOCATION
&
LASTING POWER OF ATTORNEY
-THE TERMINATION OF POWER OF ATTORNEY CAN BE REMOVED WHERE THE ESTATE OWNER CAN MANAGE HIM SELF OR HER SELF
Thus, all about termination of power of attorney at which time and at what time can be relocated,
IN CASE THE ESTATE OWNER LOOSE MENTAL CAPACITY THE ALTERNATIVE WAY IS TO MAKE THE LPA to make power of attorney which is commonly in TANZANIA mainland
MANEGMENT OF THE PEOPLE WITH MENTAL DISORDER
A person with mental disorder must be admitted to a mental health care following part two of the Act
Section 3
THERE ARE THREE WAYS THAT A PERSON WITH MENTAL DISOREDER CAN BE ADMITTED TO MENTAL HEALHTY CARE
àvoluntary admission
àtemporary admission
àinvoluntary admission
1.voluntary admission
Any person who has mental disability and has attached the apparent age of eighteen years can be admitted to a mental health care facility section 4(1)
–A person who has not attached the apparent age of eighteen years whose parents or guardians is under their decision maker submitting him for mental disorder treatment may be accepted if the parents, the officer in charge for mental healthy care facility
-Where a person who is received in mental healthy care facility as a voluntary patient become incapable of expressing him or her self-willing or unwilling to continue receiving treatment shall not be kept as voluntary patients for longer period than 30 days
Section 5(1) (a) or should discharged before the expiration of thirty days except he becomes capable of expressing himself or he has been made subject of an application relation to involuntary admission.
-if one person received as a voluntary in mental health care must be assed by the offer in charge of mental health care family that like no longer dangerous of himself in the community and his capable of taking care of himself , may leave the mental care
Refer section 4(3)
2. Temporary Admission
Where a person who suffer from mental disability is likely to benefits from temporary treatment in a mental health care facility but is incapable of expressing himself willing or unwilling to receive shall be in a mental healthy care facility as a temporary patient for treatment and care
3. Involuntary admission
Involuntary admission is made where person mental disorder is dangerous to himself the community taking care of himself
ADMINSTATIVE OF ESTATE OF THE PESRON WITH MENTAL DISORDER
Incase a person become mental ill the law allows any person who is mental ill to apply to the court to manage and admit the offer of such person section 7 of MHA.
-Courts which have jurisdictions to deal with persons to administer the estate after the person with mental disorder at the resident magistrate court and both have the current jurisdiction in matters relating to mental disorder person.
APPLICZTION FOR ORDER OF MANEGEMENT AND ADMINSTRATION OF ESTATE
Application for an order for management of estate and administration of estate of a reason with mental deserved may be made by a apparent, a child who has attached the age relative or any interested person whose are or such person is s.9(1)
-the application must be accepted by an affidavit setting out the grounds upon successfully application for an order he maintained for the disorder persons, estate the court will appoint the manager of estate of such person àsection 24(5)
POWER AND DUTIES OF THE MANEGER
A manager appointed shall examine proses for management of estate as may be expressly confirmed upon the either specially or govern by on order of direction of court section
25(1)
-The manager shall have the following powers
1)execute all such conveyance and all other instruments relating to the estates of the mentality described person as the court may direct
2) exercise all power invested in him ass in the character of trustee or guardian of the person for the benefits in regards to whom he was appointed to be a manager.
3)submit to the court report as regard to the expenditures of the estate of mentally described person
-However, the manager shall not without express permission of the court mortgages charge, transfer any immovable property for the term exceeding six years s.25(2)
-Even conveyance or any other instruments made in pursuant to an order of the court shall be valid and it have effects since it wear made the person of an sound mind with respect to those estates the order is made under section sections 25(4) of MHA
-Where there is the need for the court direct in the administration of the estate of the mental desire person the court may on application made by a way of petition make an order as circumstance may regime
DISTRIBUTION OF ESTATE OWNER WHEN THE ESTATE OWNER IS ALIVE.
There two circumstance under which the estates owner may distribute he/ her estates when he or she is alive namely gift in contemplation of death and gift inter vivo
1.distribution of gift in contemplation to death
Gift in contemplation to death is usually expressed in Latin maxim donation mortis causa. the estate owner can distribute his/ her property when he stills alive. If he or she is forced with the imminent danger of death
2. Distribution of Gift by an inter vivo.
The estates owner can distribute his/her estates inter vivo. The distributions of estates inter vivo enable the estates owner to depart from the general principle of inheritance. In the case of estates owner distributes his/her estates inter vivo to another person, as a general rule one he/she dies the distributions of estates will not form part of the deceased estates. However, this does not apply automatically for the gift inter vivo to be valid to the person to whom the estates were made or was distributed must prove that the property was legally passed from the estates owners to the done
In administrative General, Zanzibar administration of estates Tope karn Ramji alia Rashid Karson Ramji v Kulsam Fadhili Musa
(1969) HCD 80 the parties of the deceased demand a piece of property family belonged to deceased of the deceased children. Mohamed Hussein claimed the property by a way of deed of gift, made to him by the deceased in 1960.
-the dead of gift was all witnessed but the deceased die before registering it is regard by the laws of Zanzibar. Mohamed sister argued that the gift was invalid for non-registration, and therefore the property was party of the deceased in 1960. The deed of gift was duly witnessed but the deceased died before registration it as required by Zanzibar law. sister of Mohamed argued that the gift was invalid for non-registering party and there for the gift was a property part of the deceased
There for the court held that
“according to Shia laws the requirement for a valid gift by the donor (b) or acceptance of gift by the donor and (c) a delay of possession to the donor.
IN Herbert Rugizibwa s/o Ruherau Vs Mushumbusi s/o Mawesi.
The appellant demands the return of a piece of land given by his father around 1906 to an ancestor of the infant defendants. The appellant alleged the gift was not an outright gift but only of limited interest in the land in the land and therefore reasonable.
It was held that
“it is clear that a presumption is that a gift of land in circumstance that of this case must be treated as a gift for a limited interest any unless there Is an evidence of compliance with the three formalities necessary to establish an outright. These formalities are (a) the giving of houses by a donor to a done (b) the sharing because by someone who witnessed the giving therefore and CCI the sharing of the boundaries of the land by the donor to done
FROM the case stated above the gift inter vivo to be valid and not included in the estate’s owners’ estates after death the following must be proved
1) there must be declaration of the gift by the donor to done
2)there must be acceptance of Gift by the done
3)there must be delay procession to the donor
4)there must be witness to prove the transfer of gift from the donor to done
ESTATE PLANING AFTER THE ESTATE OWNERS DEATH
Estate planning after the estate owner’s death answers the question stated above, how and to whom your assets will be distributed after death. When we talk of estate planning after the death of the estate owner we are actual referring to succession.
Succession as an estate planning
Succession deals with the ……………deceased estates to heirs. We have seen that it is inevitable contention that any human being shall die example no one can escape death and hence estates planning is inevitable for the succession to meet the needs of the estates owners the estates owners must be in the first place plan his/her self-estates before death to whom the share of estates before death to when the shares of estates decides when we talk of estates planning’s in relation to inheritance we actual referring to the testate succession vise-vie the intestate succession.
-Testate succession own when a person dies living a valid will behind estate planning in relation to succession is all about the way the estate owner wishes his or her property to deicide to when he or she wishes after death.
In other words, succession in relation to estate planning Refers to the denture of freedom of testate. As we have seen that the idea of estate planning is a relatively new concept in Tanzania that applies to denture of freedom of testate. Most people in Tanzania do not make a will. This is caused by a number of reasons including of the following
1. un aware of its importance
2. costs
3. lack of property
4. reluctance to reveal private facts