Being optimistic is great but being blind may not good. There is always a possibility of life not working the way you had thought it would. And what if it does not.
Age has nothing to do with succession planning. Many people put off their planning and then never get the chance to do so. If you own movable or immovable assets, you need to have a succession plan irrespective of the age.
Most people believe that their family members will not fight over their assets after they are gone. Being optimistic is great but being blind may not be good. Everyone is emotional about their family and hopes that nothing wrong should happen to them, everyone prays that there is peace and harmony in the family. All these thoughts do make sense but there is always a possibility of life not working the way you had thought it would. And what if it does not.
Don’t be in a hurry to pass your assets to your children. We normally advise our clients not to gift everything to the kids during their lifetime. Write a Will and let the devolution happen when you are not there.
You can change your Will as many times as you want. If you want to make small changes in the Will then you can do a Codicil, but if you want to make significant changes like changing the beneficiaries then it is better to redraft the Will.
One needs to understand that nomination is important, but a nominee is a mere custodian and may not be the ultimate beneficial owner. A Will supersedes nomination in all assets classes except equity shares and company bonds.
Most of us hold assets in joint name with your spouse. You may hold your residential asset in joint name with your wife. Most of us assume that if the husband dies then the wife on an auto basis will become the owner. But that’s not true. In case if the husband dies intestate (without writing a will) then his share will devolve to his surviving class 1 legal heirs, his wife, kids, and mother will have equal right on his share in that asset.
I don’t need estate planning as my family is nuclear, this is the most common theme used by many people. Because of a hectic work life most of the times either of the spouses is not aware of all the assets and financial dealings. Maybe everybody is not particular about documenting and listing their dealings and updating the same on a regular basis. Some life aspects that nuclear families ignore which they need to consider, are sudden death, incapacitation, separation & legal issues and formalities.
As a first step create a will. This will allow your assets to be distributed as you wish and will allow you to appoint a guardian to care for your minor children.
You don’t need to be a millionaire to create a Will. The assets that you have created and built are of a certain value and these assets should devolve on your loved ones.
India does not have a Living Will concept, issue a power of attorney in the name of the person you trust to mitigate the risk of incapacitation.
Take help of a professional and don’t attempt to do your own estate planning. You can make serious errors that will have negative effects on your estate and your life.
Though not mandatory it is advisable to register your Will. It will help your family members at the time of execution.
You don’t need to declare the contents of the will to your family members, but you can inform them that you have created a WILL.
You should review your plan every 3 to 5 years or sooner if life changes occur. This also includes updating beneficiaries and their beneficial interest.
Do choose responsible and trustworthy advisors and helpers. This includes possible guardians, executors, trustees, and power of attorney agents. You want to make sure that your affairs are handled appropriately and with care.
Don’t forget to tell your loved ones that you’ve taken the time to plan. An estate plan is only effective if your loved ones know that it exists.
Do include funeral planning in your estate planning. This can ensure that your funeral wishes are followed as well as help to minimize family disagreements.
Do ask your attorney questions about your plan. It’s important to make sure that you understand all aspects of your estate planning.
Don’t attempt to change your estate plan before seeking professional advice. This will help to minimize mistakes. Don’t ever write on your original documents.The writer is Founder & CEO of Terentia Consultancy.