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Everyone knows about the ‘Will’ but not comfortable talking about it. Any suggestion to make a will is considered as if you are telling the person that his end is near. Majority of the people always believe that it is too early to think about documenting a will. Unwillingness to accept death as part of life is the main reason for not making a will. One need to understand that life is unpredictable and uncertain. It is sensible to prepare will at a relatively young age when one is fit. With old-age comes several physical and mental illnesses making person incapable of doing the documentation in the desired way. Past experiences shows that will created at such an old age often generates doubts & disputes later.
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 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 nominee is mentioned in the financial instruments? Strictly speaking, 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 death of actual owner until it is transferred to the right legal heir.
Advantage of making a will:
There are the benefits of making a will & consequences to follow if the will is not prepared.
- Laws of inheritance and succession, are complicated and diverse in nature, and are different in case of Hindus and Muslims. Admittedly, there is higher inconvenience to the family members if no will exists. In the absence of a will, property normally gets distributed equally amongst heirs according to the succession laws in case of Hindu deceased.
- 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. Similarly, distribution to friends, servant etc after death is possible only if it is mentioned in the will.
- 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.
- By making “will”, one does not only distribute wealth; it can also attach responsibilities 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 fund with terms & conditions attached thereto. Will enables a person to take care of the legal heir in the most appropriate way.
- It can ensure hassle free passing of the wealth to the legal heir without any complexities. Without a will, process could be longer, tedious & little expensive. Further, a person can decide the person to inherit the property. For example, in one of the case, 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.
- 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.
- 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. Creating a document called “WILL” could not only save a lot of trouble and headache subsequently but also provide peace & harmony in the family..
Considering all the advantage attached, it is advisable to prepare a “Will” well in advance. How to prepare the will?, What are the precautions that should be taken? We will discuss it all in our next issue.