Incidents from reel as well real life keep reminding us about the importance of making a will. Dhirubhai Ambani, the founder of Reliance Industries died intestate (the legal term for dying without a will) and we still remember the disagreement between his sons over his companies.
A will is for everyone
The first thing that any one of us has to keep in mind is that a will is for everyone. Stop assuming that making a will is only for the rich and wealthy.
Any person with any assets can make a will and stipulate what happens to his estate when he/she passes away. That will make it easier for his successors to move on instead of focusing on unnecessary legal hassles. Did you know that in the absence of a will, it is your religion that decides succession and who inherits what from your list of assets?
A will is not only meant to divide your assets but to also assign your liabilities too.
List all your assets
Before you draw up a will, it is good to take stock of all your assets. Some unused bank accounts, those forgotten fixed deposits or investment in mutual funds, jewellery in the bank safe locker — do not miss out on any.
At the same time, make a list of all the beneficiaries. They need not be your family only. Except for certain assets, which are passed on ancestrally, and have to to remain within the family, your other assets can go to your friends or charities or anyone at all.
One thing to keep in mind here would be to use proper names to list all the beneficiaries. Yet another would be to include a separate list with the location of each asset. For example, the address of the bank and details of your bank locker, your DEMAT account details etc.
While assigning your assets, it pays to be specific.
Let’s suppose you have an asset with a current market value of Rs 50 lakh and you would like to distribute it equally to your children. Instead of mentioning that X and Y get Rs 25 lakh each, it is good to mention the figure in percentages like 50% each. The value of the asset may appreciate or depreciate with time.
Witness and signature
What good is your document if it is not signed? So remember to sign your will with the date clearly mentioned. The law requires two witnesses to sign your will as well.
It would be a good idea to get your doctor and lawyer to be witnesses so that the veracity of the will is not in question at a later date. Your assets may change over time, like a sale of shares, an addition of property etc. Be sure to make changes accordingly, and each change requires you and the witnesses to sign. It is good to add ‘THIS WILL SUPERSEDES ALL PREVIOUS WILLS’ anytime you make changes.
Appointing an executorAn executor is a person who handles your will execution. Appointing an executor becomes all the more necessary when the beneficiaries are either minor or elderly. Generally, an executor is not one of the beneficiaries.
It is important to remember that just as financial planning is essential so is estate planning.