You spend more than half of your lifetime in creating wealth through assets like property, investments, gold, vehicle, etc. But what happens to it when you are gone? You may have nominated your loved ones across various assets but they are not the true owners, only trustees. Amongst your children, you may want to give more to the financially weaker one. Not just the money, specific things which hold sentimental value, you may want to bequeath to certain members. In the absence of a Will, the law of succession will apply, i.e., your property will be distributed equally amongst your spouse, children and other family members (natural heirs).
Succession laws vary depending upon not just religion but gender also. So for e.g., if a Hindu married woman dies without preparing a Will, her entire property would be inherited by her husband and children. Neither her own parents nor her siblings stand to inherit anything even if she had wished to. In the case of no children and husband pre-deceased, a Hindu woman’s property after her death will be inherited by her mother-in-law but her own mother does not get anything.
As morbid as it may seem, preparing a Will is one of the wisest things you can do for your loved ones. Through a Will, you can transfer your wealth to your dear ones as per your desire and ensure that it is done without family disputes in the future. Lack of a proper Will is likely to create legal hassles amongst them after you are gone. Also, your immediate family members may face financial hardships ahead if they are mere nominees or custodians of your financial assets and cannot utilize your wealth if some relative drags them to court.
How to write a Will?
Personal Details & Declaration: Your Will should start with providing your personal details like name, address, age, etc, along with date & declaration. It should state that you are of sound mind at the time of making the Will and not under any pressure/influence by any person. In case you have made any prior Will, then you must specifically mention that the old Will stands revoked.
Creating a list: List down all your assets – investments, bank accounts, bank locker and contents, jewellery, demat accounts, property, cash, vehicle, etc. Mention all of these with clear addresses and location (with online & offline documents, if any). This list will provide you greater clarity on your inventory of assets. The good thing about preparing a Will is that even if you have missed out on something, it will be covered under Residual Assets and will be transferred to your loved ones.
Naming the beneficiaries: After making the list of assets, prepare a list of beneficiaries and map each asset towards beneficiary/beneficiaries. Also, review your nominations and joint holdings across all your assets. Check whether the nominees you had named earlier are consistent with the list of beneficiaries you have mentioned for each asset. If not, then change the nominee name wherever applicable, to avoid conflicts in the future. Further, it is possible that a beneficiary may die before you and the Will would be required to change accordingly. So it is prudent to name alternate beneficiaries in the Will. Barring cash, the value of other financial assets like property, mutual funds, shares, etc, keep on fluctuating. It is thus better to mention the ownership in percentage terms. This would also help if there is going to be more than 1 person in sharing the ownership of a particular asset. It is also important to be clear on the property that you solely own and the property that you share with some one, maybe your spouse, sibling, business partner, etc. You can only give away the portion of what you own. If beneficiary is a minor, ensure that you appoint a trusted guardian to look after the asset till the minor reaches adult age.
Signing the Will: Your Will will be valid only if it has your thumb impression or signature on it. Ensure that your signatures are present on all pages of the Will. Not just that, you will be required to sign the Will in front of at least 2 witnesses. They are required to sign after you, thereby certifying that it is your Will. The witnesses are also required to furnish their full address details. It is prudent to get some trusted person who is not a direct beneficiary to sign the Will.
Executor details: Name a trusted person as an Executor who will have the huge responsibility of getting your property transferred as per your wishes. Ensure you appoint a person who has the time, energy and willingness to execute the entire process. You will have to intimate and seek his consent in advance. Otherwise, there might be no Executor for your Will if the person refuses to accept the responsibility after your demise. You can also appoint an alternate Executor.
Important points to remember:
Ensure that there is no ambiguity in the contents of the Will. Your intentions need to be recorded very clearly so that no one takes advantage and interprets any twisted meanings out of the Will.
Once you have prepared the Will, ensure to store it in a safe place and let your Executor know about it. You can make a copy of the Will for safety reasons. Bank locker could be one of the safest places to store your Will.
If you fear someone might challenge your Will on fitness grounds, get a medical certificate attached to the Will to prove that you were mentally sound at the time of writing the Will. Best still; get a doctor to sign as witness which would erase all doubts of you being of an unsound mind.
With changing circumstances and relationships with your family members, you may want to review your Will periodically and change it. You may want to update your Will in case there is a new addition in the family or you may have acquired a new high value asset.
If you have any doubts while preparing the Will, it is better to consult a lawyer. If you feel your personal family situation is complicated with many members and feuds, it is better to get the Will prepared from a lawyer. You can also take the help of many online paid services available nowadays for preparation of Wills.
Conclusion: Start writing your legacy on a piece of paper. Preparing a Will is a prudent way to facilitate smooth transition of your property to loved ones after your demise. Having a succession plan in place thus completes your financial planning exercise.