Why writing a Will is critical to estate planning

Live Mint | 21st August 2022 | Rajesh Narain Gupta

Today, succession planning has become critical for people from all walks of life. Usually, one possesses movable financial assets in the form of cash lying in savings accounts or fixed deposits, or permitted amounts in foreign bank accounts; securities held in portfolio management services, mutual fund investments, bonds and other debt instruments, shares, etc. In addition, one may have immovable assets in the form of commercial, agricultural or industrial land, and residential units such as houses, apartments, etc .

Under the law, nominee is the trustee. So, whoever is appointed as the nominee is deemed to be the trustee for all the legal heirs. The position of the nominee is fiduciary and critical as the nominee holds assets for all the legal heirs. Most people misinterpret this provision assuming that once a nominee is appointed, the nominee will receive the assets as the sole beneficiary. This is not the correct position. 

Nomination helps the nominee to receive the assets in a hassle-free manner without going to the court to obtain the succession certificate or the probate of the will. It is important that the nominee is mentioned as a beneficiary in the will. 

The Will has to be executed in accordance with the applicable laws and regulations for the respective religion and domicile. If a Will is not executed and a person dies intestate (without a Will), all legal heirs will get equal share under the Hindu Law. Hence by executing the Will, one creates differential rights for the legal heirs. 

In the Will, one may say that all assets will go only to the wife whereas if there is no such Will, then for a Hindu individual, the assets will go to all legal heirs equally i.e., the mother, wife and children. 

The Will is an important tool for succession planning. Any person who has attained 18 years or above, and is of sound mind can execute a Will.

The Will must be executed appropriately with two attesting witnesses. The witnesses could be family members, friends or third parties but the beneficiaries should not be the witnesses. Many a times, a Will is made without complying with the legal requirements and this puts the beneficiary in a serious disadvantage. It’s like a gun without bullets. 

Neither stamp duty is applicable on the Will nor is the registration with the sub registrar of assurances mandatory. Registration of Will and / or videography is suggested on a case-to-case basis and depending on the relationship with the legal heirs and the possibility of any of the legal heirs creating any potential dispute.

Any person can himself / herself write the Will even by hand. A Will should clearly mention how the assets will be distributed and to whom. 

The person who executes the Will is referred to as the testator, who has an option to appoint an executor under the Will. The executor is the person who carries out the intention of the testator and distributes the assets to the beneficiaries after complying with all the required formalities. If all these things are taken care of, a challenge to the Will is difficult to be raised. 

One can change the Will as many times as one may wish during one’s lifetime. Further, all the assets which are mentioned in the will can be used by the executant of the Will in such manner as he may like before the death of the person who has made the Will. And, the Will comes into play only upon the latter’s death. 

In some of the Indian states, it is mandatory to take a probate of the Will from the Court and if the Will is executed properly and is uncontested, such order is received within a year or so. The easy solution to handle succession is to do proper nominations and leave a Will.