It will allow your kin to access the wealth you bequeath to them, without any hassles
“What is the right age according to you to make a will?” asked a member of an audience during an investor awareness programme. My standard answer is, “[The] day you opened your first bank account.” While this might be a little exaggerated because if a bank account was opened while an individual was minor, then the need to make a will may not arise. The thought process behind the answer is the moment there is a bank account, wealth creation begins. The moment there is wealth, there will be a need to pass on the wealth to near and dear ones upon death and hence a will should be made.
Stages of passing on wealth
Let us discuss two stages of passing on wealth.
The first stage is to ensure that upon death, all forms of assets are in the custody of someone near and dear. This can happen with the help of a nomination.
“For the last few months, I have been running from pillar to post. My father had a huge fixed deposit in the bank, but he did not update the nomination information. Initially, it was in the name of my mother but after she passed away, my father did not take any action. The bank is helping me with formalities, but it is taking time” — this was a conversation I overheard between two of my co-passengers on my journey from Mumbai to Ahmedabad.
Nomination ensures the nominee gets control of the asset. However, keep in mind that the nominee is only a trustee of that asset and the eventual owner of the asset will be as per the will. If there is no will, then there are different Acts under the law which will prevail.
The second stage is to make a will. A will is the document that will ensure who would eventually own the property. It is very easy to make a will. It can be made on a simple piece of paper. There is no need to type it. Even a hand-written one is accepted by the court. In fact, sometimes it carries more weight. It is called a hologram will.
There is no need to make a will on a stamp paper. Making a list of assets that are owned and to whom an individual wishes to bequeath each one of those assets, written on a simple piece of paper, is sufficient.
Absence of will
In the absence of a will, there are several Acts of law that will prevail such as the Indian Succession Act, Hindu Law and Muslim Law. However, the process and time taken will be longer. Also, if there are assets that require court orders, then your near and dear ones would end up spending on lawyers and court fees to get control over the assets created by you and bequeathed to them.
The easiest way to pass on your assets to your loved ones would be to have both a nomination and a will in place. This will ensure smooth transition of assets.
A will is not a death warrant. In fact, dying without making a will would make the life of your near and dear ones difficult. Therefore, do not delay making a will.
“Gaurav, today I was going through a will of one of my clients. He belongs to a royal family and has massive real estate and other jewels. His will is so complicated that I felt instead of making such a complicated will, it is better not to have any assets,” one of the financial planners said during a conference.
Please do not make your will very complicated. That is a sign that an individual who, even after death, is not willing to pass on control. Let go your insecurities, before you die.
There was another interesting incident. A leading doctor had a large amount of wealth. In his will, he had bequeathed a sum of ₹2 lakh to a caretaker. I urged him to give the sum to the caretaker right away. “No point waiting till your death.” In many instances, it is prudent to pass on the wealth while we are alive.
There was another instance where an individual was insisting on the order of the bequeathal. Once again, the servant of the family was a part beneficiary. The woman wanted the bequeathal to be mentioned right on the top.
When I questioned her for the need, she replied, “Let everyone know I have been fair and loving.” I asked her “do you want your executor to share a copy of your will with the whole world?”
Please make a will, but keep it simple and straight.
Going ahead, instead of discussing what is WPI (wholesale price index) in the economy, think of ‘My WPI – my wealth passing instruments’. Whether WPI moves up or down, our wealth will have to be passed on to the next generation in a smooth manner.
(The writer is a financial planner and author of Yogic Wealth)
Source: Read Full Article