Your support can turn a life
A Will in time will save your family from legal wrangles and breaking up after your demise, advises Kanu H Doshi, Chartered Accountant.
If you die intesate (without making a will) there are certain rules deciding how your estate will be sorted out and who receives what. This can be expensive business. The legal costs will be paid by your estate, so your relatives and other beneficiaries receive less than they might have done. It can also take a long time, during which your loved ones may be left with no means of support. In due course what's left of your estate may not be distributed as you would have wished.
Anyone above 50 years of age should be surely reminded: “If you’ve executed your WILL, please see that it’s in a safe place and do inform your spouse about it. If not, please fix up the earliest appointment with your lawyer!” The Will should be simple enough for the wife, the sole beneficiary and the computer engineer younger brother, the sole executor of the Will, to understand it, administer it and implement it smoothly.
A Will is a legal document through which you can allocate your wealth to your loved ones after your death. This has tremendous benefits. Firstly, your wishes have to be adhered to by your family members, thus avoiding acrimonious legal issues between them. Secondly, you can stop worrying about the distribution of your wealth.
When an individual dies without making a Will (‘intestate’), his property will be inherited on the law of succession applicable to that person. Succession to property of Hindus is governed by the provisions of the Hindu Succession Act, 1956. Succession to property of Muslims is governed by the Muslim Law. The rest, viz. Sikh or Buddhist is governed by the Indian Succession Act, 1925.
Preparation of a Will should not be confused with nomination. Nomination grants holding rights of a particular property in favour of a nominee, as prescribed in a Will. In simple words, a nominee is a trustee for the rightful owner, who should hand over possession / ownership of property to the rightful owner as per the directions in the Will.
A Few Simple Steps
Making a Will is not a difficult task. Just follow these simple steps:
- Make a detailed note of all your wealth, including your bank accounts, investments in equity, mutual funds, post office schemes, bonds, property, gold, etc. Collect various details such as your bank locker number, bank account numbers, your demat account number, etc.
- Decide on who should be the executor of your Will. A close friend, but younger in age to you, whom you trust completely would be a good choice.
- With the help of a professional, prepare your Will and include all the details of your wealth. While planning distribution, be very clear on how much each person gets. For instance, if you want to allocate funds in your bank account to two family members, clearly state the percentage each should get. Make the Will document foolproof i.e., there should be no vague statements.
- Your Chartered Accountant, familiar with your assets and conversant with legal implications, can prepare a Will for you.
- Get your Will registered. While registration is not legally required, it adds authenticity and prevents subsequent complications. Keep it safe!.
- A Will must always be dated. If more than one Will is made, then the one having the latest date will nullify all other Wills. In fact, it would be better to make a statement nullifying all other Wills.
- Create your Will as soon as you’ve accumulated substantial wealth. For instance, if you’ve purchased a flat, this valuable asset will become the focal point of concern among your family members. It is important that only you decide on who gets this vital asset on your death.
- But this doesn’t mean you can no longer accumulate any more wealth. You should provide for allocation of future wealth build up in your Will. This will help avoid the hassle of creating a fresh Will periodically.
- Each page of the Will should be serially numbered and signed by the Testator and the Witnesses. This is to prevent substitution, replacement or insertion of a page or pages by persons with fraudulent intentions. At the end of the Will the Testator can indicate the total number of pages in the Will. Corrections if any, should be countersigned.
Know the Basics
- A valid legally binding Will does not require any stamp paper. It could be on plain paper. However, the paper should be of durable quality that lasts long.
- But it should be signed by you, in the presence of two other witnesses who should sign in the presence of each other.
- You should be in sound physical and mental health while making a Will and hence one of the two witnesses could be a family doctor who could testify, if necessary, to that effect.
- Executor(s) of the Will should be ideally younger in age than the maker of the Will. A beneficiary can also be an executor of the Will.
- Execution of the Will attracts no stamp duty, no gift tax, no income tax nor any estate duty. It facilitates a smooth devolution of your wealth to the desired persons.
- A Will supersedes the provisions of the Succession Act.
Contrary to general belief, estate planning is important for everyone, not necessarily meant only for the super rich and famous. It’s an act of wisdom if you have an estate, some wealth, but lots of care and concern for the well being of your near and dear ones.
(The author is a member of the Bombay Chartered Accountants’ Society)