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Earlier in this column, we took up succession planning and its importance for an individual and his family. Today, we Will try to understand the tools available for succession planning: a Will and a Trust.
A Will is the most practical first step in estate planning. It is a legal declaration of the intention of a person regarding assets that the individual desires to take effect after his or her death. It is an extremely personal document and showcases an individual’s love, care, opinions and feelings towards loved ones.
The importance of drawing up a Will is often highlighted as one of the biggest financial planning steps you Will take. It clearly states how you want your assets to be distributed when you are no longer physically present.
If you don't have a, Will, which means you die intestate, your estate Will be distributed according to the succession laws of the country based on your religion, and your property could be distributed differently than what you would like it to be. A Will made by a Hindu, Buddhist, Sikh or Jain is governed by the provisions of the Indian Succession Act, 1925. However, Muslims can dispose their property according to the Sharia Law.
The laws of succession certainly do not cater to the specific needs of your family. For example, as per The Hindu Succession Act, assets Will be distributed equally among the children but you might have a differently abled child or a widowed daughter and you might want to make sure they are looked after well and might want to provide that extra provision, which can be made available through a well drafted Will. Similarly, a Will shall certainly give you the liberty to bequeath to people who may not be your legal heirs but dear friends, faithful servants or a charity.
Young couples tend to avoid writing a Will as they get caught up in their new roles as newly-weds, first time parents or are less likely to think about becoming ill or incapacitated. Similarly, children from previous marriages can get ignored if you don't provide for them in a Will. Also if you have minor children, a Will also allows you to decide who their guardian Will be.
Anyone can make a Will, so long some basic requirements are met. Every person who is of sound mind and is not a minor can make a Will. Persons who are differently able or visually impaired can make a Will provided they know and comprehend what they do by it. A person who is ordinarily insane may make a Will during an interval in which he is of sound mind. No person can make a Will while he is in such a state of mind, whether arising from intoxication or from any other cause, that he does not know what he is doing.
A Will made on a plain paper is equally valid as a Will on a stamp paper. It can be written in Hindi, English or in any other language. It is not mandatory to register a Will.
There are four main parties to a Will.
Testator: The person making the Will. He has the power and authority of disposing off his/her assets as per his/ her wishes.
Beneficiaries: All those persons, body of persons or an organization who benefit from the bequeaths in the Will.
Witnesses: The person chosen by the testator to countersign the document. It should be noted here that a witness should not be a beneficiary in the Will.
Executor: Someone trusted by the testator who plays the crucial role of executing the Will. On the demise of the testator, the Executor undertakes the responsibility of executing the wishes and desires of the testator as per his Will. He is responsible for obtaining probate from court where required and the final distribution of the estate of the testator.
Making sure your Will has been properly written and is legally binding is often overlooked and assumed, even though it can have adverse effects and can be void. Your intentions might be noble in making a Will, but you end up risking leaving your family with nothing but a legacy eaten away by legal bills or unnecessary bitterness.
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