Making a Will: A Guide
One of the most underutilized elements in making a financial plan is The Will. In India, there is almost a taboo on an individual making a Will, but in the new evolving world of computerization and stronger documentation with banks, financial institutions and indeed the government- making a Will becomes imperative. In this feature, I will be enumerating the benefits of making a Will and the disadvantages that one has if a person does not make a Will. Simply speaking, a Will is a legal declaration by a person who is above 18 years of age with respect to their wish for the bequeathal of their property-both movable & immovable. It comes into effect after the death of the person making the Will. It reflects the last wishes of the person for the manner in which their property will be divided post their death. Any person who is of a sound mind and above the age of 18 can make a Will. It is regardless of a person’s net worth. The law recognizes that any adult can dispose their property after their death in any way they would want. In today’s day and age, everyone who has any property or asset, whether movable or immovable, should make a Will. Every person ought to plan how their assets will be divided after their death by making a Will. It is a necessary part of financial and property management in the uncertain times we live today.
Some of the main benefits of making a Will are:
- It makes an inventory of all your assets in one place helping your loved ones to transfer all your assets without missing out any assets. For ex. A recent survey indicated that over Rs 23,000 crores are lying in unclaimed PF accounts and over Rs 3600 crore in inoperative bank accounts.
- You distribute your assets and property as per your wishes, thereby greatly reducing uncertainty and family disputes during emotionally difficult times.
- Convenience and Ease in transfer of assets- it is easier to transfer and settle an estate with a valid Will. Transfer of all assets like property, bank accounts, Demat accounts and Insurance policies among others is much simpler, less time consuming and much cheaper. The will substitutes the need for a legal heir certificate and a succession certificate, which is extremely time consuming and relatively expensive.
- With a higher incidence of nuclear families- where children are living away from parents and the gradual break down of the joint family system in India- an inventory of all assets and the convenience of transfer of all the other assets is a bigger gift you can give your loved ones.
- Increasing Asset values- as you all are aware, the prices of property, gold and other assets have skyrocketed over the past 20 years. Also investments made by individuals are more diverse and complex. A simple rule of thumb is that as asset value increases, the complexity and cost of transfer also increases. A well-documented Will makes the transfer process that much simpler.
- You can appoint and define the role of the executor and/or trustee to make the transfer process smoother.
- If you intend to donate your eyes etc, you could complete all formalities in your lifetime and intimate your loved ones to avoid any kind of conflict.
- You can appoint a guardian for the property of the minor children in the Will. This will require looking into the facts and circumstances of your family and relations.
While making a Will itself is not very complex, it is always advisable to take the help domain experts to help you avoid the common pitfalls that you may not be aware of while drawing your own Will. This is advisable so that you may be aware of the laws of the land as well as ensure that it is a legally tenable document that will be upheld by the Courts. Wills made by a layperson may have mistakes that can create problems and may cause dispute which are expensive to sort out.
To read the second part in the series, Nominee Vs Beneficiary, click here