Twenty-five years into profession and my discussions with our friends/ clients have had a paradigm shift. The first few years revolved around what needs to be done to start a new business and grow, mostly related to how to make money. The next few years were around the growth path, new acquisitions, best structures and how to reach the peak. However, for the last couple of years the discussions have moved from growth to retention and securing the wealth/ other assets which have been created over the years. Thus, its important to share my thoughts about a touchy but very important topic – the importance of a documented Will and some basic FAQ’s which everyone should know.
What is a Will
A written declaration by a person, made during their existence when they are of sound mind, mentioning how their assets (moveable and immoveable) and other belongings should be handled or divided after their death amongst their heirs and/or other persons.
Is Will a mandatory document in India
No. Though devolution of one’s worldly possessions post their demise is a matter of personal law. Will is an instrument, which in spite of being governed by personal laws, allows an individual to use their own volition to decide how their assets would be devolved subsequent to their passing, as opposed to being divided strictly in accordance with mandate of their personal laws. If a person dies without a Will, they are said to have died Intestate. So in case of an Intestate death the property of such person is distributed according to the respective succession act of the religion they belong to.
What all is required to make a Will
Though there is no fixed list which specifies the list of details required to prepare a Will, these are the recommended details which are required for a Will to be valid as per Indian Law:
- The same needs to be in Writing.
- The same to be made voluntarily and without any force or pressure
- The person preparing the same to be of sound mind
- The Will needs to be signed by the Testator (the person who prepares the Will)
- Signed by two witnesses
- The list of assets to be distributed along with the person to whom the same needs to be given has to be mentioned.
What are the benefits of having a Will in place
- Identification of all assets at one place
Though this may sound very administrative, but in today’s day and age having a list of complete assets owned by us, mainly moveable be it Fixed Deposits, Mutual Funds, Bank Account is a big respite.
- Clear Distribution of Assets
The allocation of how all the assets owned by a person are defined in the Will. The clearer the definition in the Will, the easier it is for the executor to settle the same without any dispute.
The assets not only covers traditional assets but also covers modern assets like Digital assets, foreign holdings, Intellectual properties and holdings in Unlisted Companies. However, the Will would need to be nuanced to cover implementation in foreign territories.
- Avoiding any family dispute
One of the most common outcome of dying intestate is high chance of family dispute in terms of distribution of assets. A Will definitely serves as a savior from such disputes since it’s a legal recognition of your wishes.
- Appointing local guardians for your minor children
A Will lets a person appoint a local guardian for minor children who will take care of them and manage their inheritance until they become adults.
- The legal process after the death eases out
Be it a probate, transfer of government and bank accounts or mutation of property, the existence of a Will eases out the whole process.
Can a Will be changed once the same has been written
As long as a person is alive and is of sound mind, he or she can change the Will as many times as they want.
What is the terminology used in a Will – Some legal terms related to a Will are:
- Testator who is a person writing the Will
- Beneficiary is a person named in the Will
- Executor is the most important person, as he is the trusted person who is given the responsibility of carrying out the instructions of the Testator
- Assets are all assets owned by the Testator
In India, neither the government or any other regulatory authority mandate having a Will, nor does it define the requirement of getting the same registered with authorities. However, with the number of property and family disputes being 66% of the total litigation, happening in India, it becomes necessary for every person to think about spending some time to
- Prepare of a Will
- Getting the same registered
- Identifying a trusted Executor
- Introducing the executor to the family
Over the last few years, all the above factors and the trust of our clients in the firm, has not only helped prepare legal documentation towards Wills, Trusts and other such structures, but also helped them plan and structure complex situations while planning for these.
Author: Kapil Nayyar