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Estate & Succession planning through Will (Part-II)
Only death and taxes are certain in life. Life is uncertain & considering the uncertainty involved it is always advisable to prepare the will well in advance. In the last issue of The Tax Talk, we have discussed numerous advantages of having a will & registering it too. Let us know about the process of making the will.
Points to be kept in mind while preparing the will:
There is no legal or defined format for making a “Will”. It’s not necessary to make the will on stamp paper. One can make it even on plain paper. Preferably, thick paper should be used and should not be folded. It is extremely important to keep it simple, precise and clear. It could be printed or handwritten. Normally, the printed version is preferred as it is more legible and clear in reading. Will can be changed as many times as required. It is possible to change the will even if it is registered. If minor changes are there it can be done by executing a codicil. A codicil is a written statement which supplements or modifies an already existing will. It must be executed in the same manner as that of the original will. If substantial changes are required then it is advisable to execute a fresh new document mentioning it as the last will.
The person making the will must clearly mention the date of creation. The last will supersede all earlier ones. It should be titled as the “Last Will”. The will should appoint an executor. Executor is a person who will carry on the tenets of the will. A trustworthy person with his prior permission should be named as an executor. Prior permission will safeguard against subsequent refusal by him.
How to make a Will:
Here is a 5 Step guide for making the will as under:
Step 1 : Make a Declaration in the beginning :
The will should begin with a simple declaration about the person making it, name, address, age, etc and with a confirmation that you are in your senses.
Step 2 : Details of Properties & Documents:
The will should incorporate the details of all the assets, properties, investments, etc as owned by you on the date of making the will. It may also incorporate the details as to where these documents, records, assets, are kept. If any asset is held not fully but in sharing or co-ownership, this fact should also be mentioned. For few assets like Gold, Silver, etc, the manner of its acquisition, at the time of marriage, inheritance, etc, can also be specified for emotional & identification purposes.
Step 3 : Manner of Distribution of the Assets/ Properties:
Manner of the distribution of assets can be incorporated in the will. If asset is proposed to be given to a minor then a trustworthy custodian till minor attains an adult age should be appointed. If there is any liability also, it may also be mentioned and the mode/obligation of its repayment can also be discussed in the will.
Step 4 : Signing the Will:
After the will is prepared, all the pages must be serially numbered & signed, preferably in presence of at least two independent witnesses. Advisably witnesses should be younger than the person making the will & should not be the beneficiaries of the will. Witnesses undertake that you have signed the will in their presence. The date and place must also be indicated clearly at the bottom of the will.
Step 5 : Storing the Will:
Will takes effect only after the death of a person. It is advisable that a signed and sealed copy of ‘will’ is kept in such a way that it can be accessed and implemented after the death of the person. For this, the intimation of will and its place of storage may normally be communicated to close relatives or friends who can ensure that the wealth of the person is distributed according to the desire of the person making the will.
Nomination cannot replace Will
Most financial instruments like FDR, bank savings / Current accounts, PPF, Insurance policies etc have the option of Nomination over it. Having a nominee over such financial instruments will facilitate the transfer of the assets without the need for a succession certificate. Question is raised as to whether will is required even if a nominee is mentioned in the financial instruments? Strictly speaking, a Nominee is neither a legal heir nor owner of the asset but merely a caretaker. The person takes the assets in his custody and then transfers it to the legal heirs of the original owner. A nominee is someone who takes care of the asset after the death of the actual owner until it is transferred to the right legal heir.
Although it is possible to draft a will on your own, it is always better to take the advice of a trusted professional while writing a will. This will reduce probable chance of error & misinterpretation & the probability of the will being claimed as invalid in the court of law. Considering the nominal cost involved and the long enduring benefit, everyone must prepare a will for the peace and harmony in the family.
[Readers may forward their feedback & queries at firstname.lastname@example.org. Other articles & response to queries are available at www.theTAXtalk.com ]
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