In the absence of a Will or Nomination even day-to-day functioning gets affected, as the heirs don’t have access to the funds.
In India, all succession and inheritance have to go through a probate process which can be cumbersome. The probate is a judicial process to prove the validity of the Will. Having a Will speeds that process and the legal heirs have access to the inheritance faster. Sometimes, in the absence of a Will or Nomination even day-to-day functioning gets affected, as the heirs don’t have access to the funds.
Simple nomination assists in transferring assets, too. These could be your bank accounts, your fixed deposits, your provident fund and even your home. One can have joint holding and nomination. This helps in quick transmission and access to the legal heirs. However, a Will supersedes all nominations, both in terms of who bequeaths your assets as well as legal validity. So, it’s best to have your Will and also have your nominations in tune with the beneficiaries of your various assets in your Will. This is applicable to all individuals irrespective of the size of wealth. It’s for ease of continuity and comfort to the heirs.
However, for expressing one’s desires about other factors such as future education of minor children, specific gifts, philanthropic interests, etc. a wishlist in the form of a Will provides clarity to the bereaved family & close members associated who can fulfill the unfinished work of the deceased.
The execution of a legal Will has a feeling of morbidity and involves a lawyer and witnesses who tend to put people away. For the mass affluent & middle class at large, a simple process to have accounts & investments held jointly and have nomination negates the hassle of transmission on account of death.
In the absence of a Will, and if the succession is challenged in court, then the legal costs and time spent on litigation is very high. For immovable properties and other wishes, it is better to have a Will with an Executor. This can be done through any lawyer and at a very low cost.
For affluent families with higher income generating assets and large sums of wealth which can be across businesses and geographies, a clear Succession Plan is very important. This will direct the way things are done in future and in the absence of the Patriarch or Matriarch.
Majority of the family-run businesses do not have a succession plan. Most of the financial assets & real estate holdings held by individuals are not in joint names with nomination. This comes as a surprise. Although most of us would have been a part of wealth distribution after death of a close family member or friend at some point and despite having seeing the chaos, the simple steps of nomination & creating a Will is not followed.
Think about it. Remove the uncertainty and help your loved ones.The author is the founder of Financially Speaking, a Multi Family Office. You can now invest in mutual funds with moneycontrol. Download moneycontrol transact app. A dedicated app to explore, research and buy mutual funds.