Will Simplified

(This blog appeared first the India's leading Financial Planning Journal-the official publication of FPSB India, a monthly aimed at establishing an academic and practice guide for the fast growing Financial Services Industry and is reproduced again with the permission of the journal, although Taresh Bhatia is the original author of this research based article)

(Below are the images of the Journal and the published pages in the journal).

Taresh Article in FPSB Journal on WILL

Taresh Article in FPSB Journal on WILL COVER

Taresh Article in FPSB Journal on WILL

Taresh Article in FPSB Journal on WILL

Taresh Article in FPSB Journal on WILL

Taresh Article in FPSB Journal

 

Taresh Article in FPSB Journal Cover3

Taresh Article in FPSB Journal on WILL PGE-3

Taresh Article in FPSB Journal on WILL PGE-4

Taresh Article in FPSB Journal Cover5

 

 

Whether you are an individual owning a house, an insurance policy, a few fixed deposits and some mutual funds investments or an industrialist with vast estates, properties and financial assets to your name - you ultimately have to hand over your possessions to somebody; it may be your legal heirs, a charity or anybody else. How do you ensure that after your death, your property does go to the intended person and not wind up in someone else's hands? The easiest way to make sure of this is to make a will.

Will by Taresh

Will by Taresh

There are only two certain things in life – Death and Taxes. A lot of planning goes into taxes. Yet in India, not enough planning goes into will planning.

When Suraj Sharma asked his financial planner, about the importance of making a will, when making his financial plan, his financial planner explained the importance the top 25 points, that must be kept in mind:

Succession planning can be done through wills, corporate entities and trusts. A will is a testament that declares the objective of the person with regard to his assets, which he wants to be executed after his death.

If one dies, without making a will, (called 'intestate' in legal jargon), his wealth is inherited by the heirs, according to the inheritance laws. A will succeeds inheritance laws, but only for the property which is exclusively owned by (vested in) the departed. The rest of the assets are liable to the applicable to the succession laws.

Will by Taresh

Will by Taresh

Legally it is not important, to make a will on a stamp paper and register with the court. (referred to as Registrar/Sub-registrar). My Advocate friend, Aditya Puralia mentioned that it very much advisable in order to restrict challenges during execution of the will

Looking at your family, your assets and liabilities, your income and your expenses, it is a myth that if you die without making a will, all your assets like property bank account, shall be automatically inherited by your spouse and hence there is no need of making of  will. In India, the Hindu Succession Act defines the course of action, for the inheritance for Hindus, if you die without leaving a will.

Will by Taresh

Will by Taresh

Preparing a Will

A will may have different components and different variations and different templates for different purposes but will have  some common  steps: these steps are

  1. The name of the person who is writing the WILL
  2. The address,
  3. date and time of writing the will.
  4. get a declaration from your doctor confirming that:  "as on that date, you were off sound mental health".

Now, you have to put all the documentation of the following financial assets in a list like: Your house, bank accounts, fixed deposits, mutual funds, shares,

Once you have put the list of your assets,  now you must prepare a list of all your liabilities,  for example the loans, the outstanding amounts and all the debtors you owe money, or have to give or take  money at a later stage.

Now,  you have to decide what assets will goto which family member and in what proportion; for example 25% to your mother, 25% to your two children and 50% to your wife.  If you are making a minor a beneficiary,  then you must select a guardian before that minor reaches a major age.

Will by Taresh

Will by Taresh

Signing the WILL

Once you have completed writing your entire will with the above components, you must sign the will,in the presence of two independent eyewitnesses, who should be signing the will, in your presence. The place and the date of signing this will, should be explicitly mentioned at the bottom of the will and all the pages of the will must also be signed. Choose two witnesses like your friend, your neighbour, your colleague but should not be one of the beneficiaries and perhaps somebody younger to you.

Executor of the WILL

You also need a person called as the executor (Not required by law) ; an executor is a person who will execute the will, when you are no more (He is responsible for getting the court order) and will ensure that all the beneficiaries you have mentioned in your will, get the benefits. It is a good idea to mention the amount or the percentage to be paid by your family to the executor, for his services in advance, in the will. It is to be noted that it is not legally required to get the will executed in a court of law as the will can be executed in the presence of a magistrate or even a public notary. You should appoint only a trusted person as the executor of your will after seeking his consent. If you do not seek his permission in advance, there might be no executor for your will if the person refuses to accept the responsibility after your demise. If there is no executor of a will, the court will appoint one.

The above documents and the will, should now be put in a sealed envelope. Remember that you should keep the will Nobody needs to read your Will, including Witnesses. They only witness your signature. Note: When you register the will you have to give a copy to the registrar for records, you can also give a copy to the executor of the will.

You should organize your original documents and information so that these can be found easily, to make your asset distribution smoother.

Execution of the WILL

To get the will executed, your executor has to get, what is  called a probate, which is a certified copy of the will, from the court of law. This process may take six months to one year, depending on the state and the city. The cost of getting this probably done, the other legal fees and stamp duty if necessary, should also be kept in mind. However, a probate is not required for immovable properties of Hindus But a Succession Certificate is required, except when it is located in West Bengal, Mumbai and Chennai.

It may be important to note that a land or property, cannot be just transferred without an appropriate will,  this is important to avoid disputes and legal hassles later on.

It is a good idea to have the final will copy, stored digitally, and ensure its confidentiality too.

If you have an inherited property, you cannot assign it to one person only, as it will go to all the legally heirs, after you.

If you revise one will, then the next will nullify, the previous will. Note: Or you can amend it through a document called codicil

It is not important to mention the value of the assets as they can change with time to time.

Always select alternates to replace legatee. This is because, death can come at any time and it's possible that a legatee, has died before or along with you.  You may therefore not have a chance to change your Will.

After making your Will, if there is any addition to the family ,or a key legatee or Executor or Guardian or Witness has expired, you should change your Will.

Registration of a WILL

If you wish to get a will registered, you will have to visit the registrar's office, along with your witnesses. A will, can also be registered, by the executor or any beneficiary after the testator's demise. There is no stamp duty for registration of a will, But these is a nominal fee which depends upon the States

Getting your will registered, can be one way of ensuring its safety. It will also make it easy to prove that the will is genuine. Registration of will is not compulsory. However, a registered will, can be difficult, to be challenged for its authenticity. If the will is excluding some heirs from the inheritance, then the reasons for such exclusion may be explained to avoid a speculative challenge. However, getting a will registered means that for changing or cancelling it, you will have to visit the registrar's office and subsequent testament, will also have to be registered.

If you haven't got your will registered, destroying the old one and writing a fresh will is all that you need to do to revise it. Make sure that the will clearly mentions the date of creation. The last will supersedes all earlier ones.

The property of a Hindu male dying without a will is given to nearest heirs who are categorized as Class I heirs in the Hindu Succession Act. These include sons, daughters, widow and mother, among others. If there is no nearest heir, the property is given to heirs in the next line (Class II heirs), which includes father, grandfather, grandmother, uncles and aunts, among others. For example, if a man is survived by his wife and parents, his mother and spouse will share his property equally. The father does not have any right in this situation. If the man has a son and a daughter as well, the property gets divided into four equal parts.

What if you don't have a WILL

To put it simply, if you don’t have a Will –

Distribution of your asset will be done according to your religion’s law and Indian law

The court will appoint someone to distribute or manage your asset or take care of your minor children

Asset related family disputes could arise

You will not be lovingly remembered if your asset cannot be easily transferred of, if there is a dispute.

In your Will, you can give or bequeath -

everything you bought from your income

asset that you inherited without conditions on future use

your share of every other asset

Some Myths related to Documentation of a WILL

Lets look at some of the myths and their solutions:

  1. I am too young to make a Will!: it is not that you are young or old, it is important to have a will in place the moment, you start earning, the moment you have a bank account.
  2. I don't have any property and hence don’t need to make any will!- It is important to have a will,  so that your  beneficiaries can enjoy the benefit of your financial assets like mutual funds, insurance policy, shares or simply the bank account.
  3. Why should I get in to the hasslesof (assumed) paper work!- there is not much paperwork involved and there is nothing to be scared off while making a will!
  4. Who will help me to make a will:you can take the help of your financial planner or an advocate.
  5. I am not able to decide my assets and liabilities!: your financial planner can be a good guide to help you decide what are your assets, liabilities and who should be given what benefits, as your nominees; for example, insurance policies to take care of your loan and your mutual fund to take care of your children’s education.
  6. Will I have to necessarily have to go to a court to register my will: you do not have to register your will in a court as it is not legally mandatory in India.
  7. Only when I am old and about to dieI will make a Will: you do not have to wait for your last breath, to make the decision to write a will.
  8. I have all the bank and insurance nominations to take care! :No, it will not automatically take care of all your transfers, of your assets to your nominees as, or the Hindu succession act, will common to force, if you are a Hindu and do not leave a will behind; in that case you may not be able to ensure, the way you wanted the asset to be transferred, will happen in that way. Nominee, is someone who takes care of your asset, after your death until it is transferred to the real legal heir. If you don’t have a Will, the legal heir is determined by law and anyone could stake a claim from the nominee and dispute(s) could arise. A Will overrides a nomination.
  9. I will have to spend a hefty amount to hire an advocate to make a will: No, it is not a big expense to make a will or hire an advocate to make a will.
  10. My wife knows all about my properties and she will get them transferred easily: True, but she does not know what to do and how to transfer the property to her name?
  • I am scared to make a will now:do not be scared, ignorance is bliss, not having knowledge and therefore not taking an action, is not an excuse!
  1. Who will help me to understand my assets, liabilities:a financial planner or a relevant advocate can explain you the differences an assist in aligning the assets with the liabilities and ensuring that the balance goes to your nominees.
  2. Who will explain the procedure of making my will: a financial planner, an advocate do have the proper knowledge about the procedure
  3. How will I make sure that the Will is now "pacca" or "confirmed": once you follow the above steps and ensured that these are in place, you need not worry whether the will is now confirmed.
  • Can I revise my will later on:yes you can revise your will as many times as you want, provided it is not registered in a court of law, and the latest Will with the date, becomes the latest updated will.
  • Can my will be challenged later on?: whether it is registered in court of law are not registered in a court of law,  any will can still be challenged, if a dispute arises. How ever, one should keep in mind the following points, in order to avoid getting a will challenged
    • Avoid terms and conditions  in the will-Do not have any conditions or “necessary” to execute only if some conditions are fulfilled like only if my son graduates or only if my son marries… this would lead to sure litigation and unnecessary trouble for the beneficiaries.
    • Avoid matters subjudice
    • Do fill in exact beneficiaries in your will and not vague or unnamed beneficiaries
  1. Do not have words like “provided” this happens. Avoid “what if” scenarios in your will. Make it very specific and not dependent on circumstances
  2. Can I keep my will and all its contents secretive:in fact, making a will, without registering in court of law, can ensure confidentiality and secretive nature of your will, but to ensure that your nominees and beneficiaries are aware of your will.
  3. Is it possible to keep people out of my will?: all the property which is self-made and is not inherited, can be distributed as per your own wish, and you can keep certain people, out of your will.
  4. How and who will execute my will:Executor is the person who can ensure that the probate of your will, is obtained from a court of law, after you're no more and that it is executed, as per your choice.
  5. Are there any forms to be filled and fees to be deposited for making a will: make a will on a simple plain paper, you can make your will and there is no form to be filled up

Now, with these 20 myths demystified, Suraj also got clarity on these issues:

  • Who will take care of your children in absence of you and your spouse?
  • One can write a will, appointing a trusted person as the guardian of their children when neither of the parents survives.
  • One can also write a will for creating trusts.
  • The succession of a property is governed by complex laws of inheritance and religion, as well as customs.
  • The laws also differ for men and women. A Hindu (which also includes Jains, Buddhists and Sikhs) man can write a will for any property earned and owned by him.
  • A person cannot include those assets, which are not legally transferable in his testament. "For an inherited property, a Hindu man can only distribute his share in the property, through a will.

Suraj was now very happy and satisfied with his 20 myths demystified and making his will was now a joy-full process and he repeated, "Happy investing"

Disclaimer: The author is a not a qualified legal adviser on Will but he sought their advise during the development of this research paper which was part of the survey conducted. The above draft was wetted by my two advocate friends: Mr. Aditya Puralia and Arun Singh)

 

Furthermore, would you like to get some queries answered, then just email me at taresh@advantagefp.in or if you would like to start making your will with my expertise, opinion and professional inputs, confirm your convenience here. or click here for more queries

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 Till you have made your will, Happy Investing
-Taresh

 

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