Approximately 60 percent of Kenyan adults do not have a written will, leading to increased cases of conflict and uncertainty relating to wealth distribution after death.
A survey conducted by Pensions administrator, Enwealth Financial Services Ltd, in partnership with Strathmore University and Institute of Human Resource Management revealed that out of the 60 percent, 40 percent rely on their next of kin nominations, 20 percent make verbal declarations on their wishes while 5 percent confide in one family member as their way of formalizing their succession. This is despite a majority (over 80 percent) of Kenyans acknowledging the importance of having a will in place.
The survey dubbed ‘Attitudes to Inheritance in Kenya’ sought to analyze the behaviors and attitudes of Kenyans towards wealth creation and inheritance.
Enwealth’s Managing Director Mr. Simon Wabufwa disclosed that some of the common reasons leading to lack of written wills among Kenyan adults include cultural beliefs relating to death, lack of trust, lack of awareness and fear of legal expenses.
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 percent of all households in Kenya have experienced conflicts due to succession.
The report further revealed that people with asset value below 5 million shillings and those with above 100 million shillings as 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, the main reason that could lead them to leave an inheritance for their children was so that they could get a good education, closely followed by the need to leave a business for prosperity. Around 70 percent of the respondents said they are confident in their children’s ability to use inherited wealth while 30 percent 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, Saccos, and cash.
Notably, 98 percent of Kenyans interviewed expect their lifestyle to be the same or better during retirement at 57 percent and 41 percent respectively. 65 percent of the respondents have between 0 to 30 percent of their assets in pension funds with 39 percent of those indicating that they will use their pension funds for further investments and 37 percent saying they will buy an annuity.
Enwealth Financial Services is seeking the ways in which the industry can incorporate the importance attached to leaving a legacy to the ongoing training on financial planning for retirement.