A Will safeguards your personal interests and that of your family’s
Prateek Mehta
Life is unpredictable, and the present situation has given us a very dark reminder of this fact. When drawing a financial plan, we try to cover for every possible scenario and contingency. However, most of us tend to ignore the need and importance of a Will.
It is a common misconception that a Will is only for the old and affluent. Not only does a Will or an estate plan spell out the contours of an inheritance, it also safeguards your personal interests and that of your family in case you are seriously ill or incapacitated. The well-being of a minor child, selecting their guardian and securing their financial future too makes for compelling reasons to putting together a concrete estate plan.
What is a Will?
A Will is a legally binding document that lists your assets and liabilities, as well the person(s) who would receive your property and possessions.
A standard Will, also known as an ‘unprivileged Will,’ needs to be put on paper, have the signature of the testator or the person making the Will, along with the signature of two witnesses. All signing parties must do so in each other’s presence.
A registered Will is a strong legal document and, in case of a dispute, assumes paramount importance.
Putting an estate plan in place is not complicated, and you can get started on it yourself. Here is a simple checklist of things to be aware of.
Hire a qualified lawyer or use a registered Digital Will service
Even though you can draft a Will on your own, a legal professional will be able to guide you on the nuances of the Will. She will be able to structure the document based on provisions within the legal and income tax framework. This can help avoid any unexpected tax liabilities, loopholes or unaddressed issues that can later become points of contention amongst beneficiaries.
More importantly, the lawyer will be able to see through the execution of your wishes. He/she can oversee the fulfilment of your Will and Testament and even enforce it in the court of law, if required.
Alternatively, you can make a digital will as well, which would contain the digital data of all assets and all specific instructions, without the hassle of hiring a lawyer. Some entities providing this service are National Securities Depository Limited (NSDL), Federal Bank and ICICI Bank.
Don’t make a joint Will with your spouse
By creating a joint Will, there is a good chance you may forget to spell out the benefits and privileges available for the surviving spouse. If neither is a direct beneficiary and without a source of income, then they may become financially dependent on the heir(s).
To avoid such a situation, you can make two separate Wills in consultation with your partner, in a way that they complement each other while provisioning for both the partners’ financial security. Do encourage your spouse to create a will.
Use this opportunity to discuss the various what-ifs. If you need to enlist your extended family members to take care of dependents, in case of an unfavourable eventuality, you can use this time to discuss the specifics.
Draw up an inventory of financial affairs
Many people fail to draw up a detailed account of all assets and liabilities. The lack of information could land your heirs in potential financial trouble or rob them of an opportunity to make a valid claim to your estate.
If you have any outstanding debts/ credit card dues, make a distinct list of each debtor with details on the terms of borrowing, amount payable, and relevant contact information for account closure. The same needs to be done even if you have debts receivable from someone else. In case you have been a guarantor for someone else’s loan, have the details of the same ready. You might want to discuss dissolution of guarantees and alternate guarantor(s) if you are not around anymore.
If you have any physical investments such as certificate of deposits, shares of unlisted companies and angel investments, redirect your executioner to where they can be found.
Also remember to specify the contact information and claims process for any life insurance plans such as term plans or ULIPs, for a smoother and speedier claims process.
Avoid creating alternative copies of your Will
Having multiple versions of the document with various ‘if-then-else’ scenarios can create confusion over the legitimacy of the Will and could render your Will invalid and not legally binding. If you have alternative copies, you can voluntarily revoke the ones that are not relevant anymore.
Factor in emergency and end-of-life care
Known as a ‘living Will’ or an advance directive, this should definitely be included in your Will. In the event of your being unable to communicate your wishes, the advance directive provides instructions for what treatment and care should/ should not be undertaken if you are unconscious or terminally ill.
On the other hand, you could also endorse a durable power of attorney (DPOA) in favour of a trusted family member/ aide, who can take decisions on your behalf should you become incapacitated.
Update your Will as and when required
The Will is not set in stone. You are free to make as many alterations as you wish. Usually major life events such as births, deaths, marriages, divorces, asset acquisitions or sale can warrant a change in the Will. You are free to express your wishes and include/ exclude any one you want, at any point in your life.
Those who are young, can revisit the estate plan once every three to five years, while senior citizens could set up an annual reminder.
Don’t rush into it when emotionally charged
Give yourself enough time to rationally think over before you make any permanent changes to your estate. Unless necessary, keep your thoughts and plans between yourself and your executor. Giving away information can sour relationships.
At the same time, feel free to pen down your thoughts and feelings for your loved ones, reconcile issues, clear misconceptions or just simply say ‘sorry’ and ‘thank you’.
Assign a trustworthy person to execute your estate
This person will be responsible for inventorying your assets, clearing off debts and taxes, informing banks, creditors and other agencies about your demise, and handing over your assets to legal heir(s), or taking care of minor(s).
You need a person who will be able to rightfully execute the duties in your stead.
(The writer is Co-founder, Scripbox)