Land. What a prestigious asset to own. In many cultures, it is regarded as a measure of one’s success, and a lucrative investment venture for real estate moguls.
However, owing to its high value, there is an ugly side to this glimmering property.
Land is often the cause of wrangles, never-ending court cases and sometimes even loss of life.
While perusing through daily news, you are likely to find bizarre cases of children killing their parents, parents taking their children’s lives, or siblings turning on each other, just because of land disputes.
In a story published by Newszetu in May this year, authorities in Kisii county raised alarm over the number of land-related murders, with figures released indicating at least seven people are killed monthly.
Over the past 17 months preceding May, 126 people had been killed, and these are just statistics from one county.
While these figures may not be an exact representation of the country as a whole, they paint a grim picture of the situation.
Probably higher is the number of cases pending in law courts involving land disputes.
The question then arises: What is the root cause of these disputes and what is the remedy?
And, are written wills the only viable means of preventing succession disputes, or are there more proactive and engaging measures that can be adopted to safeguard one’s property, prevent strife between family members and ensure all parties are satisfied with the inheritance left behind even in the absence of parents?
The matter of wills
This is one of the most discussed topics when it comes to inheritance, especially concerning land and real estate.
While writing wills were not common in earlier times, the tradition is slowly changing. In contrast, let us look at two different scenarios.
Take 70-year-old Rachel Mwangi. She owns a five-acre piece of land that she inherited from her late husband.
By the time of his passing, he had not written any document indicating how he wished his property, which includes rental business establishments, would be subdivided amongst their seven children.
Even today, Rachel is yet to write a will and admits she is hesitant to do it.
Lawyer Brenda Majune in a Newsplex article published by Newszetu in May last year, says that wills are gaining popularity in Kenya as people are thinking more progressively.
She notes that she once met a 29-year-old man who was looking to draft a will. She found this commendable since it was an indication that young property owners are cognisant of the need to have proper measures in place for continuity, even as they work to build their wealth and families.
Rachel however notes that the reason she is yet to draft her own succession plan is that there are wrangles in the family, already, about how subdivisions are to be made.
She, therefore, feels that writing a will might escalate the tension and disagreements between her inheritors could escalate.
She, therefore, does not dismiss the idea of drafting a will but wants to know what else can be done to smoothen the process.
Rachel’s case is not unique, as many Kenyans find themselves in similar or closely related scenarios.
While a will may be legally binding and might eventually be followed as a matter of law, it does not mean it cannot be challenged in court by disgruntled parties.
Such cases can take long for a determination to be reached, and in the process, huge legal costs are incurred.
The property left behind therefore ends up benefiting other parties, rather than the intended inheritors.
So, what then?
While one cannot underestimate or negate the need to have a will, Gloriah Lucky, an Advocate of the High Court and a legal expert in land-related litigation, says there are alternative means to safeguard your interests, provided for in Kenyan law.
One such option is registering a Trust under the Trustees (Perpetual Succession) Act Cap 164 of the Laws of Kenya.
This is essentially an agreement or legal relationship reached between three parties: A settlor (creator of the trust), a trustee (a protector of the trust), and a beneficiary.
These parties can either be individuals or legal entities. Under a Trust arrangement, the settlor transfers legal ownership of assets to the trustee, to hold for the benefit of the beneficiaries.
Trusts are created through a written document, either a settlement document or a declaration of trust which sets out the duties and powers of a trustee.
A trust, like a will, can be challenged in court. The advantage, however, is that the trust is considered to be what the deceased intended to continue after their demise and thus it will be very difficult to challenge this unless there are issues relating to the fraudulent acquisition of the property.
Another option is registering your assets as a company in which you or your beneficiaries then become shareholders or both.
This is especially practical if you have commercial property.
However, it is important to note that the company formation and structuring should be done by a competent person who understands the interest of the client in the event he or she is deceased, vis-à-vis the company’s assets and liabilities.
This is because due to the perpetual nature of the company, the other shareholders will be required to pay off any liabilities attached to the company assets.
The advantage of a company is that you can transfer your shares to beneficiaries who in the event of your passing, will go on to acquire those assets as shareholders without going through the long succession process in court.
This can be formulated in advance during the structuring of the company, thus sealing any loopholes or making it hard to present a case in court.
Gloriah notes that these two options ensure ‘automatic succession’ by the beneficiaries and/or administrators of the deceased estate in the event one passes on without a will.
On the question of succession disputes if one dies intestate (without a will), and whether disputes can be resolved without costly court procedures, the advocate says options are limited.
Other than annexed court mediation and other forms of mediation processes such as the chief’s office that are available for parties in a succession dispute, you cannot avoid the court process.
Once the deceased dies intestate, it is presumed that the only way one can transfer the assets is through a court order.
Is that all?
The succession plan must specify ways to prepare heirs to be good stewards of wealth and enable them to understand their evolving roles and responsibilities. The ideal candidates will need to develop their financial literacy and business acumen, as well as leadership and decision-making skills.
The way to achieve this is by actively involving your heirs in your dealings so that they can build financial literacy from a young age by managing their own expenses, as well as participating in the financial aspects of the family undertakings as a whole.
Understanding key financial concepts and practices provide a foundation to gain valuable work experience and develop business acumen.
When heirs understand the finance function and the inner workings of a business, they can think strategically to identify risks and opportunities.
This can especially be critical if you have developed your property for commercial purposes.
Leadership and decision making
To develop their leadership capabilities, heirs must appreciate the importance of being accountable to others while holding others accountable as well—an especially delicate task when working with family members.
Sound leadership requires emotional and social intelligence to communicate effectively, bearing in mind that some family members will receive and process information differently.
Strong leadership skills are especially necessary within the business, and these will help heirs thrive in supervisory roles.
To fill ownership and leadership roles, heirs need to develop their decision-making capabilities as well.
They will have to weigh competing interests and make judicious decisions that yield the maximum benefits over the near term and long term.
Drawing on leadership skills and business acumen enables heirs to make decisions more effectively. Ultimately, when identifying a successor, it is prudent to empower those who demonstrate a passion for the role and have the necessary skills to make a meaningful contribution.
The bottom line is…
While life does not always go according to plan and sometimes unfortunate events befall us, proper planning and engagement can help prevent unnecessary wrangles and infighting within a family over the inheritance.
Death is an absolute certainty for everyone, and while we do not welcome it, we must prepare for the future even while building wealth and acquiring property.
Succession planning calls for deliberate preparation, and it requires time. It may even take years, as well as forethought, commitment, diligence and adaptability.
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