Where there is a ‘Will’ there is a way….
‘Will’ is nothing but your will power
‘Will’ is your will power to distribute your owned assets among your relatives as per your wish. A will is necessary to bring clarity among legal heirs, which may reduce conflicts and speculations for Inheritance. The division of assets after death comes with many emotions. It is always advisable to make will when you have immovable property in your name.
Why succession planning is parenting after death?
There are certain complex situations in life like:-
- Parents are divorced but children are with one parent.
- Remarriage after death of one spouse but children are from both first & second marriages.
- When you don’t have any legal heir but having adopted child.
- When daughter is unmarried,
- When among children, one child is handicapped or of unsound mind, etc.
such situations in life demands equitable severance of assets to do justice to all legal heirs, the slightest differences can result in hurt feelings and recriminations hence such situation demands utmost care from parents so their legal heirs don’t end up into legal battles after the parent’s death besides this in any normal situation if parents dies without will, children have to incur around Rs. 1.5 lakhs as legal costs to claim own assets by applying for succession proof so it is always advisable to have Will in any situation.
A ‘Will’ is different from nomination
Lot of people get confused between will & nomination according to law, a nominee is a trustee, not the owner of the assets. In other words, he is only a caretaker of your assets. The nominee will only hold your money/assets as a trustee and will be legally bound to transfer it to the legal heirs. For most investments, a legal heir is entitled to the deceased’s assets. For instance, Section 39 of the Insurance Act says the appointed nominee will be paid, though he may not be the legal heir. The nominee, in turn, is supposed to hold the proceeds in trust and the legal heir can claim the money. A legal heir will be the one who is mentioned in the will. However, if a will is not made, then the legal heirs of the deceased are decided according to schedule under the succession law, where the structure is predefined on who gets how much.
Why Gifting property is not advisable?
Gifting property attracts around 3% to 4% stamp duty & registration charges on market value of property may vary upon your relations & state law, Whereas registration of will is not compulsory & there is no stamp duty levied on will. If you transfer all or a substantial portion of your assets to your legal heirs, it may leave you in a difficult position in your old age. It is not advisable to transfer your properties in your life time as it would be unwise to lose control of your assets & forgo your financial security. It is always advisable to transfer assets through will for smooth succession of your assets after your death to let your nominees inherit your properties.
Tax planning with Will
One of the important means of tax planning is to be adopted through a Will is the creation of a Hindu Undivided Family by way of transfer of property to one’s son, spouse and children in such a manner that all these persons can constitute a separate Hindu Undivided Family if there is no such HUF already in existence. This Hindu Undivided Family would be able to enjoy the separate exemption limit applicable to it under the Finance Act for the time being in force. A discretionary trust can be created through a Will for the benefit of some persons particularly the members of the family whether alive at the time of making the Will or to be born later.
Drafting Will yourself or take help of Legal Advisor?
Drafting will is easy, you can yourself draft your will but It is always advisable to consult your legal advisor and plan your succession as legal advisor has sound knowledge about succession law, legal technicalities & he possesses practical experiences of family issues so he can guide you through practical issues. It is also advisable to involve your tax advisor for tax planning through will.
