In the wake of coronavirus, here’s why succession planning is taking the centre stage
As the fear of Coronavirus sweeps the globe there is a rising fear among people to safeguard their family; and with a fierce financial panic, to preserve their wealth. This is a temporary phenomenon, but people have become more wary of health, hygiene and other necessary factors. Being at home they are also getting time to arrange their estate planning affairs to ensure that their wealth passes on to their family members without any hassles. Succession planning is always important; however, it is on the back burner due to a busy lifestyle and frequent travels. Now several people are taking the initiative to complete the exercise of Will writing and have this simple document in a place where there are so many uncertainties floating around.
How to prepare a Will:
Preparing a Will requires collating the details of all the assets; deciding which family member or person should inherit the assets after one’s demise; having a discussion with one’s spouse, children and acquainting them about one’s assets and investments; choosing a right executor who will administer the estate after one’s demise; choosing a guardian for minor children in case of demise of both parents. One could seek the help of a lawyer who could guide and provide advice on the above matters and ultimately draft the Will in legal language and incorporate crucial and contingency clauses.
Review of an existing Will:
Those who already have a Will in place should review the same to check if any changes are required due to marriage, divorce, having children, the demise of family members, the addition of wealth, changing your mind about your heirs etc. One may either choose to make a codicil or prepare a new Will.
Executing a Will:
Once the Will has been drafted as per one’s wishes, it can be printed on a plain paper, signed by the testator and two witnesses. The witnesses shouldn’t be the beneficiaries under your Will. Registration of a Will is not compulsory, but it provides greater authenticity to the document and is less prone to legal challenges.
Location of the Will:
Lastly, it’s important to store your Will safely and inform the family members and professional advisors about the location of the Will. A copy can also be stored with the professional advisor.
Challenges in absence of a Will:
In the absence of a Will, the intestacy rules will apply. Its means that the assets of an individual will get distributed amongst the legal heirs as per the applicable religious laws and irrespective of any nomination. For example, a Hindu is governed by the Hindu Succession Act and the legal heirs of male Hindu are his mother, wife and children who will inherit assets in equal proportion. Christians & Parsis are governed by the Indian Succession Act and Muslims are governed by the Sharia laws. Most of the time people do not prefer distributing their hard-earned assets in the above manner and their wishes regarding distribution can be exercised by writing a Will.
Not having a Will in place may also lead to discord amongst the family members leading to lengthy court disputes and freezing of assets. A Will which lists down all the assets comes as a rescue to the family members when they are trying to get access to these assets and saves them the hassle of digging into your accounts and files to gather information. Having a Will in place also reduces the paperwork tremendously during the execution of the estate of a deceased. Family members do not have to furnish release deeds, indemnity bonds etc. when a beneficiary is clearly stated in the Will.
Having a succession plan in place reduces one’s worry amidst such temporary events which may or may not affect us.
Article courtesy: Financial Express, 11th April 2020
