Finally, Gift a Will to Your Dependents

By M H Ahssan

Making a will is the simplest way to secure their future and avoid family disputes

When life insurance companies keep reminding breadwinners of their responsibility towards their family in any eventuality, there are some prudential measures that nobody reminds individuals. These measures are as important as buying an insurance cover or investing for the future and yet do not require much efforts. Here are some of the measures that ensure your dependents get their due without any paperworks or expenditure:

Making nominations
This is the simplest method of ensuring that one’s assets — savings accounts, insurance policies, provident fund and other investments — are transferred to dependents’ at no extra cost. While making nominations, it is equally important to periodically review the nominations as relationships, dependencies and situations can change over a period of time and you might no longer feel the need to transfer your possessions to the nominee chosen earlier. “And, while making/changing a nomination, you need to remember that if a nominee is a minor, he/she should have a suitable guardian assigned. Also, any change in the nomination necessitates a witness,” says financial planner Prerana Salaskar-Apte, partner, The Tipping Point. However, a nomination holds good only in the absence of a valid contrary claim by another person. If it is challenged by a will that disposes the assets in a contrary manner, the nomination will be rendered ineffective. Moreover, if the individual dies intestate, the laws relating to succession will supersede the nomination.

Act on your will
The limitation of the nomination process underlines the need for a Will, which can reduce the chances of disputes among family members after the testator’s death. One of the common misconceptions about a Will is that it is meant only for the affluent class, but experts disagree. “In today’s uncertain times, it is prudent for individuals who are of sound mental disposition and abilities to consider making a Will of their movable and immovable assets,” says Amit Seth, attorney-at-law and partner, Seth Associates.

A will can be drawn up by anyone even on a plain sheet of paper. The language should be clear and the contents should be unambiguous so as to leave no doubt about the testator’s intention. It should list the complete details of the testator’s properties as also about the legal heirs, who may or may not be related to him/her. Clearly stating the testator’s intention for bequeathing his/her assets to legal heirs is also critical. “If the testator wants to leave out a specific legal heir from becoming a beneficiary, he should specifically say so in the Will,” suggests Mr Seth.

The will should disclose the date and place of its execution, and should have at least two witnesses (who are not the beneficiaries). Though registration is not mandatory for affirming a will’s legal sanctity, it lends credence to its validity.

The time taken and costs involved in executing a Will could vary depending upon several factors. Says Dhruv Agarwala, cofounder, iTrust.in: “A lawyer could take up to four weeks to draft a Will. The process of registering a will at the district court could entail another 2-4 weeks. The total cost will be close to Rs 10,000-12,000 plus service tax, including registration of the Will and the associated fees.”

Seek professional advice
Another method of distributing your property amongst your heirs could be estate planning. Financial planners and wealth managers help you in valuing your estate and completing other formalities. “It involves amassing and disposing of the assets to ensure that the end goals of the owner are met after his/her death. Advice is given on the basis of valuation of assets for the purpose of division amongst multiple heirs. The applicable laws of the land (and religion of the individual) with respect to succession are also taken into account,” says Ms Salaskar-Apte. It encompasses tax planning as well, so as to ensure minimum tax outgo at the time of transfer to beneficiary.

“Drafting of a Will is an integral part of the entire process. One can also choose to form a trust in case the beneficiaries are minor children or charitable organisations. The difference here is that while the Will can be implemented only after following the requisite legal procedures, the trust can transfer the property to the beneficiary immediately after the testator’s death,” says financial planner Kartik Jhaveri.