By M&M Reporter
A new survey has found that an alarming 60 per cent of Kenyans do not have a written will, leading to increased cases of conflict and uncertainty relating to wealth distribution after death.
The survey found out that 40 per cent rely on their next of kin nominations, 20 per cent make verbal declarations on their wishes while 5 per cent confide in one family member as their way of formalizing their succession. This is despite a majority (over 80 per cent) of Kenyans acknowledging the importance of having a will in place.
These findings were recorded in a survey conducted by Pensions administrator, Enwealth Financial Services Ltd, in partnership with Strathmore University and Institute of Human Resource Management. The survey sought to analyse the behaviors and attitudes of Kenyans towards wealth creation and inheritance.
“As financial planners we increasingly witness serious consequences for not putting an estate plan in place. Some of the common reasons why most Kenyans do not have a will include cultural beliefs relating to death, lack of trust, lack of awareness and fear of legal expenses, “ said Simon Wafubwa today during the launch of the report dubbed Attitudes to Inheritance in Kenya held at Intercontinental Hotel.
Inheritance is becoming a common debate in Kenya especially after the new Constitution took effect in 2010. According to the Kenya National Bureau of statistics 26.2 per cent of all households in Kenya have experienced conflicts due to succession.
The Attitudes to Inheritance in Kenya report further revealed that people with asset value below Sh5 million and those with above Sh100 million are the most concerned about leaving an inheritance for their children. The importance attached to leaving an inheritance also varied across different age groups with those aged 31-40 years considering it most important.
According to the respondents, most important reason why they want to leave an inheritance for their children was so they could get a good education, closely followed by the need to leave a business for prosperity. Around 70 per cent of the respondents said they are confident in their children’s ability to use inherited wealth while 30 per cent of the respondents were not confident.
The study, which also sought to find out the assets type Kenyans hold, how they intend to use them during retirement found that majority of the assets are held in land and real estate, closely followed by pension funds ,Sacco’s and cash.
Notably, 98 per cent of Kenyans interviewed expect their lifestyle to be the same or better during retirement at 57 per cent and 41 per cent respectively. 65 per cent of the respondents have between 0 to 30 per cent of their assets in pension funds with 39 percent of those indicating that they will use their pension funds for further investments and 37 per cent saying they will buy an annuity.
“We have noted that there are two extreme views towards the idea of leaving an inheritance. At one extreme are people who deliberately save and make investments in order to leave as much as possible to future generations or for altruistic reasons. On the other extreme are people who try to use up all their assets during their lifetime leaving nothing for the future generation,” Mr. Wafubwa added during the Enwealth Conversations Forum.
Enwealth Financial Services is seeking the ways in which the industry can incorporate the importance attached to leaving a legacy to the ongoing trainings on financial planning for retirement.