Estate & Succession planning through Will
There are only two things that are certain in life – Death & Tax.
Like it or not, these two things need to be admitted gracefully. A will is simply a legal document in which the person declares as to who will manage your estate after you die. Asking the person to prepare the will is often considered as if you are telling the person that his end is near. We all think & believe that it is too early to think about preparing a will. Unwillingness to accept death as part of life is the main reason for not making a will. This pandemic & its impact has made us realize the fact that life is unpredictable and uncertain & it is sensible to prepare, earlier the better. Further, old-age comes with several physical and mental illnesses making a person incapable of doing the documentation in the desired way. Court statistics prove that will prepared at an old age often generates doubts & disputes later.
Advantage of making a will:
There are the numerous benefits of making a will & serious consequences to follow if the will is not prepared. Let us know about it:
- Avoiding the long & time consuming process of Transfer:
Will can ensure hassle free passing of the wealth to the legal heir without any complexities. Without a will, the process could be longer, tedious & little expensive. In absence of will, legal heirs are often required to approach the court for a succession certificate which is not only time consuming but also involves a lot of paperwork.
- Ensuring distribution by Choice:
Laws of inheritance and succession are complicated and diverse in nature, and are different in case of Hindus, Muslims, Christian, etc. Admittedly, there is higher inconvenience to the family members if no will exists. In the absence of a will, property normally gets distributed equally among st heirs according to the succession laws in case of Hindu deceased. For example, in one of the cases, the son was suffering from life time imprisonment and absence of will resulted in the transfer of property to him rather than his grand son or daughter in law. Without will, estate is passed on according to the succession laws applicable to the religion of the person dying. By will, one can plan as to whom the property should be given through will.
- Distribution according to the need & contribution of the person:
Every family structure is diverse and so is the contribution & dependability of the family members. Need & requirements of the wealth distribution amongst the family members is also different. Unequal distribution of assets is not possible without making a will. For example, a person can peacefully pass on the businesses to one who is taking care of business rather than leaving it on to a legal heir to negotiate & resolve. Distribution to friends, servants, etc after death is possible only if it is mentioned in the will.
- Equitable & Logical Distribution of wealth as against Equal Distribution:
Will can take care of “who, what, when, why” of the assets distribution. Person making the will knows what belongs to whom, his contribution, conditions, attachment, nature in the family. Subsequent family disputes & conflicts could be avoided by making the will with suitable explanations.
- Attaching an obligation to the Assets given:
By making “will”, one does not only distribute wealth; it can also attach obligations & responsibilities as well, like who will take care of the children, spouse etc. ‘Will’ enables a person to draft a clause in a way so as to take care of minor or even married daughter, grandson etc by providing funds with terms & conditions attached thereto. Will enables a person to take care of the legal heir in the most appropriate way.
- Tax Planning through will:
Through proper drafting of a “will”, a person can very strongly & powerfully plan & manage subsequent tax impacts in the hands of the legal heir. Will is not only the tool for wealth distribution but can also be a muscular tool for succession planning & tax planning. Normally, authentic/ registered will is never questioned by the taxmen. There is no impact of clubbing provision if the assets are passed through will.
- Ensuring emotional & physical bonding amongst Family Members:
Often disputes amongst the family members, in absence of will, results not only in loss of time, money, energy but also results in more strained relations amongst the legal heir. Creating a document called “WILL” could not only save a lot of trouble and headache subsequently but also provide peace & harmony in the family..
Registration of ‘Wills’:
Registration of a Will is not at all compulsory. However, if the Will is registered, it is more strong & authentic evidence as to its genuineness. “Will”can be registered with the registrar/ sub-registrar by paying a nominal registration fee. It requires the person to visit the registrar’s office along with 2 witnesses who are trustworthy.
‘Probate’ and its importance:
Non registration of “Will” often results in a questioning of its authenticity. When the will is not registered or questioned, normally a document called “Probate of Will” is required from Court. Probate is the copy of the will given to the executor with a certificate under the seal of the court and signed by one of the registrars certifying that the will has been proved. Probate is a way to certify that the Will is authentic. The application for probate has to be made along with a copy of the last Will and testament of the deceased to a court of competent jurisdiction. To avoid the probable requirements of probate, it is advisable that the will be registered with the registrar.
Considering the nominal cost, consequences & time involved, it is advisable to make the will and register it too. Considering all the advantages attached, it is advisable to prepare a “Will” well in advance. Can nomination replace the will? How to prepare the will? What are the precautions that should be taken? We will discuss it all in our next issue.
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