Assess your assets, identify beneficiaries and detail the distribution
Thanks to her mother’s elaborate will, Shalini Desmukh was saved from problems regarding the details of her mother’s funeral and distribution of wealth. But this is not common. Most family feuds we hear about are a result of unequal or irrational wealth distribution, or a lack of clarity on it. Therefore, it is always advised to prepare a will and avoid ugly confrontations and court cases.
In the absence of a valid will, the government might take over your property, after your demise. Typically, when you do not have a will, the rule of the land is applicable. In India, it is either the state law or the religious law, explains Richa Karpe, director-investments, Altamount Capital, that does succession planning.
|HOW TO MAKE A WILL
- Anyone above the age of 21 can prepare a Will
- Anyone from or outside the immediate family can be a beneficiary
- Two witnesses needed to testify at the time of signing the Will
- Consider your entire wealth, calculate its worth, choose legatees and an executor
- Bequests should be specified like legacy or any donation to be made
- Allot some portion towards funeral and final rites expenses
What is a will?
It is a statement of choice for distributing own and/or inherited property. It can be handwritten or typed, and should be signed by a testator (one who is writing the will). A verbal one is not legally valid.
There should be two witnesses at the time of signing the will (ideally, not the testator’s relatives) to say you are of “sound mind” at the time of preparing the will. It does not require stamp duty or registration, although experts advise that a will must be registered, so that it is in safe custody.
You can write a will with the help of a solicitor — there are specified solicitor firms, which help write wills. Financial planners can also help prepare the will.
Who can make a will?
Anyone above the age of 21 can prepare his/her will. There aren’t separate rules for men and women. Also, the law does not distinguish between working and non-working women.
While preparing a will, there are three aspects that you need to keep in mind:
Identify the legatees: You need to know the beneficiary or the person who will receive your assets/wealth. A beneficiary can be anyone from or outside the family. You should also decide the proportion of the assets that will be distributed to, or amongst the number of beneficiaries. You or the testator should specify, if you have any specific bequest (legacy or donations) to make.
But you should first provide for your dependants and ideally, not leave “too much” for a single person. You should also provide for your dependants’ regular maintenance, as well. Lawyers advise keeping aside some funds, if you do not name your immediate family (spouse, kids) in the will as beneficiaries, to avoid controversy. And, mention this clearly in the will. Otherwise, your dependants will not even get maintenance benefits, if they are not named in the will.
Identify/assess your assets: Take an account of all your assets and their worth, which will form part of the estate you may be leaving behind. Also, assess your assets in terms of the ones held in joint names and specify their location. Say, you own a house jointly with your sibling; you can assess the worth of your part of the asset and ask your sibling to pay the beneficiary.
Choose the executor: An executor is a person who implements the contents of the will after the demise of the testator. He is the legal representative for all purposes of the deceased person. An executor is not the same as the beneficiary.
Adrish Ghosh, head-wealth advisory India, Barclays Wealth, says, “You can have a single or a joint executor, an individual (could be a relative also) or a professional corporate entity.” An executor can be an advocate, who will distribute the property and assets as directed in the will. He will also have to perform the stated duties.
Process of probate
After the demise of the testator, the probate process will begin. Probate is the legal process of settling the estate of a deceased person, specifically resolving all claims and distributing the deceased person’s property under the valid will. The probate process makes the will a public document.
There are chances that your family and/or relatives don’t approve of your will and the distribution of your assets and contest in the court. To contest a will, you need to make a case in a probate court.
If the will includes persons who are not blood relations, it is advisable to give a brief statement of the reasons for allotting a part of your wealth, to avoid unnecessary harassment of the third party during probating process. For instance, many give money or jewellery to their domestic help of many years — because the latter took good care of himher when heshe was ill — to reward him/her.
Avoid allotting part of the estate towards pets, which generally become a point of contention, adds Karpe.