EVERYONE talks about the importance of succession planning. What's the first that comes to your mind when you have to assign beneficiaries to your hard-earned savings? It's a will. But there have been many instances where the will has been challenged after the death of the testator (one who makes the will). At that point, it's difficult to get clarity on the soundness of the will and it just leads to an unhealthy dispute within the family. There is a better alternative in estate planning, which ensures a hassle-free process of bequeathing wealth. Estate planning is a process of accumulating and disposing of your wealth, be it cash, shares or property in a systematic and pre-determined manner to a certain beneficiary/beneficiaries of your choice.
The testator has to set up a trust, which is manned by trustees appointed by him/her. Professionals suggest you should appoint third party trustees, so that the asset transfer process is carried out in a neutral manner. This also helps in maintaining the confidentiality of the will. There are some independent firms, which specialise in such services. Recently, banks have started offering estate planning services for their ultra high networth individuals as well as high networth individuals. These mainly include individuals, who have hefty bank balance of a few crore of rupees. Banks carry out a number of services like writing a will, registration and keeping the will safe. The bank also helps in setting up the trust, its registration, documentation management and execution of the trust.
Over and above, these banks also take care of legal and regulatory requirements. Further, they also help in filing tax returns and settling liabilities of the trust. Usually, these banks work in conjunction with lawyers to ensure a smooth process of estate planning. If you have to just make a will with the bank, it costs you 6,000-10,000. Making of a will, registration, other processes like safe-keeping and execution will work out to around 25,000. If you are taking a bank's help in setting up a trust, its management and execution, the bank will charge you 0.5-3% of total assets under management (AUM) as the estate planning fee. If you seek an independent professional, the charges vary depending upon the service. The setting up of a trust, will work to a one-time cost of 2-3 lakh.
