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Making a Will – Food for Thought during uncertain time

It is said that taxes and death are the two most certain things in life. Tax Planning is the most discussed matter when it comes to Financial Planning, but things like Inheritance Plan / Will Deed are rarely discussed aspects of financial planning. Today we will discuss this very aspect of Financial Planning in detail.

Following FAQs will put some light on some of the critical issues related to making your own will.

What is a Will?

A Will is nothing but a legal declaration made by a person on how to distribute and manage his property (i.e. movable and immovable) after his death.

Why is Will Deed important?A will deed makes life easier for the family members. If the distribution of wealth is well defined, chances are that the execution of distribution may happen in a much easier manner as compared to a situation where nothing is defined. Though one cannot deny of possibility complications and litigations even though a will is made, the probability of the same is reduced substantially.

Who should make a Will Deed?Every person who is major, of sound mind should make a Will. Any person who is the sole owner of a self-acquired property can bequeath by way of Will.

What will happen if I die without making a will deed?

Everyone knows about the tussle between the Ambani Brothers over the property of their father Late Shri Dhirubhai Ambani. There is always a possibility that your legal heirs may want a larger pie of your assets which may lead to unpleasant situations. Even if this is not the case, there may not be enough clarity on how to divide the property among them without any dispute. In case a person dies intestate (without making a will) the distribution of his/ her property is governed by applicable laws. For instance, the Hindu Succession Act defines on how assets need to be distributed in case of a dispute. The legal heirs always have an option to arrive at an amicable solution and can get it approved by the court of law. But, like in any legal matter, taking a legal recourse to settle your inheritance dispute can be time consuming. Secondly, the cost of getting things sorted through the court can be quiet expensive. The ‘court fee’ is what one needs to pay in case matter lands up in the court of law. This court fee is in proportion to the assets. So higher the value of the assets, higher will be the court fee and vice versa.

I have made nominations everywhere. Do I need to still make a Will?Yes. It is a myth that one doesn’t need a Will if all nominations are in place. Firstly, Will supersedes all nominations irrespective of when the nominations were done. For example, if Mr. A made a will in the year 2019 in favor of Mr. X and had nominated Mr. Y. in 2020 for one of his Mutual Funds he held, Mr. X has the right over these Mutual Fund Units even though nominations were done at a later date. As per the Law, Nominee is just the trustee of the assets. He cannot be the owner until he is the beneficiary of the Will or he receives the inheritance as per the Succession Law. To explain this lets continue with the above example. Let’s assume that Mr. A dies a few days later after he nominates Mr. X for his Mutual Fund Units. Here Mr. X claims the money from the Mutual Fund as he is the nominee of the units. The Mutual Fund will have to honor the request as per nominations made. But now Mr. X, the nominee is not the owner of the proceeds received from the Mutual Fund. Mr. Y can request Mr. X to transfer the proceeds to him on the basis of the will made by Mr. A. If Mr. X refuses to transfer the proceeds, Mr. Y can drag Mr. X to the court of law and take his rightful share from Mr. X.

What is the procedure of making a will deed? Do I need to register it?Even though Will is a legal document there is no specific prescribed format. It can either be on plain paper or on stamp paper. It can be either handwritten or typed. But one should remember that a Will can be challenged in the Court of Law, if there is a dispute among the beneficiaries. Thus one should make sure that Will is foolproof document without any scope of misinterpretation. In order to make a Will more authentic, following care should be taken.Take signatures of minimum two witnesses after making the Will Take a doctors certificate stating that the person making the Will is of sound mind while making the Will. The same certificate needs to be attached to the Will Register the Will with the sub- registrar One can appoint a third person (who is not a beneficiary of the Will) as the Executor of the Will to ensure unbiased distribution of the assets. Thus it necessary to appoint a reliable Executor Ask a lawyer to go through the content of the Will so that there is no loophole in the draft of the Will.

What all should I include in the Will?

The Will should start with a declaration that one is making the Will free from any kind of undue influence or pressure.One should list all the property i.e., movable and immovable along with the names of the beneficiaries to whom one wishes to bequeath the property in the desired proportion. One can also include things which are not financial in nature. For instance, one may mention his other wishes in the Will like donating money, organs, specific rituals to be followed/ not to be followed after death, etc. One should remember to keep updating this list as and when new property is acquired. This will go a long way in making the Will foolproof. The date and place of the Will should be specifically mentioned at the end. One should also ensure that a witness signs on all pages of the Will.

Disclaimer: The above article is for information purpose only. Any views or opinions represented in this blog / note are personal views of Mr. Rahul Mantri (Partner, Midas Touch, Pune) and do not represent those of people, institutions or organizations that he may or may not be associated with in professional or personal capacity, unless explicitly stated. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company or individual. The owner of the blog makes no representations as to the accuracy or completeness of any information. The owner shall not be liable for any losses, injuries, or damages from the display or use of this information. It is best to consult your personal financial advisor / legal advisor to make your Will foolproof.

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