The link between Estate Planning and unclaimed financial assets in Kenya

The link between Estate Planning and unclaimed financial assets in Kenya

Do you have an estate plan?

There are many ways to plan your estate so that the things you have worked for go to the rightful beneficiaries.  According to UFAA, it has reclaimed Kshs 31.8 B from holders and paid out claims amounting to Kshs. 2.03B to 29, 076 claims.

The most common tools of estate planning in Kenya are;

1. Wills
2. Family trust
3. Power of Attorney
4. Nominating beneficiaries

In Kenya, these assets are transferred to an unclaimed financial assets authority if left unclaimed for some time.

What is Estate Planning in Kenya?

Estate planning involves making decisions about how your assets will be distributed after your death or in case of incapacitation. It ensures that your family, loved ones, or chosen beneficiaries receive the benefits of your estate according to your wishes.

Why Estate Planning is Important in Kenya

In Kenya, assets that remain unclaimed for a certain period are transferred to the UFAA. To prevent this, it’s essential to have a well-documented estate plan in place. The most common estate planning tools include:

• Wills: A legal document stating how your assets will be distributed.
• Family Trusts: A structure that holds and manages your assets for the benefit of your loved ones.
• Power of Attorney: A legal authority allowing someone to act on your behalf in financial or legal matters.
• Nominating Beneficiaries: Assigning specific individuals to receive the benefits of your life insurance, pension, or other accounts.

How Lack of Estate Planning Leads to Unclaimed Assets

1. Lack of Documentation

Without formal documentation of your assets—such as through a will or trust—your heirs may be unaware of your assets, leading them to go unclaimed.

Tip: Always consult a lawyer with expertise in estate planning to ensure your assets are properly documented.

2. Failure to Update Beneficiaries

Major life changes like marriage, divorce, or the birth of a child can affect your estate plan. If you don’t update your beneficiaries after these events, unclaimed financial assets may arise, especially if the named beneficiary is no longer alive or relevant.

3. Uncommunicated Financial Information

If your family or executor doesn’t know about certain assets, such as a forgotten bank account or investment, these may remain unclaimed.

How to Avoid Unclaimed Financial Assets: Practical Estate Planning Steps

1. Create a Complete Estate Plan
   Include all financial accounts, investments, insurance policies, and personal property in your estate plan. Ensure you have a current will and trust to clearly outline asset distribution.
2. Update Beneficiaries Regularly
   Keep your estate plan up to date with life changes, such as marriages, divorces, and births. Outdated information can lead to complications in asset distribution.
3. Document All Assets
   Maintain detailed records of all your assets, including account numbers and contact details for relevant institutions. Ensure your executor and beneficiaries know where to access this information.
4. Appoint a Competent Executor
   Choose an executor who understands your financial situation and can efficiently manage the transfer of your assets.
5. Consolidate Accounts
   Simplifying your estate by consolidating multiple accounts or investments into fewer accounts can reduce the risk of them being forgotten.

Why You Should Start Planning Your Estate Today

Without proper estate planning, your family could face legal hurdles, delays, and unnecessary expenses when trying to claim your assets. In Kenya, unclaimed assets are managed by the UFAA until rightful owners come forward. By ensuring your estate is organized and up to date, you prevent your assets from falling into the hands of the state.

What’s Next? Start Your Estate Planning Today

Unclaimed assets can be avoided with comprehensive estate planning. Make sure all your assets are documented, beneficiaries are updated, and your estate plan is current. This ensures a smooth transition for your heirs and prevents your assets from going unclaimed.

If you’re ready to start planning your estate, contact us at info@swkadvocates.com for professional legal advice and assistance.