Making a Will Should Not be Optional!

Most people spend a lifetime creating assets for their family and loved ones, but end up spending remarkably little time deciding what should happen to those assets after they are gone.

House, immovable properties, bank accounts, mutual funds, shares, insurance proceeds and other investments take decades of perseverance and hard work to build. Yet, in the absence of a will, our loved ones , who are left behind find themselves navigating banks, revenue authorities and courts endlessly merely to gain access to the estate of the deceased, the estate that the deceased always intended them to have, timely and effortlessly.

For understanding this further we must familiarize ourselves with three concepts that frequently get confused: a Will, a nominee and a legal heir.

A Will Is Your Voice After You Are Gone

Put simply, a Will is nothing but a declaration of how you want your estate/assets to be dealt with after your death. It allows you to decide, during your lifetime who should receive your assets, in what proportion, and subject to what conditions. A will simply eliminates any scope for uncertainty/quarrel amongst those you leave behind.

A nomination with a bank or a stock broker on the other hand serves a different purpose. It is essentially an administrative mechanism that enables a bank, mutual fund, depository or other institution to release your movable assets such as stocks, bank balance, Fixed deposits, insurance etc to a nominated person without any cumbersome formalities upon the demise of the of the asset holder.

One of the most common misconceptions is that nomination and inheritance are synonymous. They are not. Merely because somebody has been nominated in your bank accounts and demat accounts does not necessarily mean that the nominee becomes its ultimate beneficial owner of your assets. The rights of legal heirs and beneficiaries have to be determined under the applicable law of succession or the Will that you leave behind. The best practice is usually to make only those people as Nominees to whom you want your assets to be devolved after your demise. But sometimes if the assets are large and one wants to devolve such assets to several legal heirs then the most optimum choice is to nominate someone you trust who will get the assets released from the bank and give to your legal heirs as per your will.

The above distinction becomes particularly important in today’s day and age since estates have become considerably more complicated. A person may simultaneously own real estate, securities, mutual funds, bank deposits and other investments spread across different institutions and jurisdictions. This makes it prudent not merely to write a Will, but also to maintain appropriate nominations for such financial assets.

What Happens If There Is No Will or Nominations?

This is where matters can become considerably more difficult. When somebody dies without leaving a Will, he or she is said to have died intestate. The deceased's personal wishes are then no longer the governing document for distribution of the estate. The estate devolves in accordance with the applicable law of succession.

The problem becomes not merely of determining who will inherit your estate but there is alsothe practical problem of establishing who all are your legal heirs and their respective entitlement to receive your assets to the banks, financial institutions and public authorities. In cases where there is no effective nomination, the legal heirs are required to approach the competent court and obtain appropriate succession documentation before they can enjoy the assets you leave behind.

What appears simple in theory can become very complicated, cumbersome and time consuming in practice. There may be several legal heirs. Some may have died in the meantime, bringing their successors into the picture. Others may have moved to different States or even different countries. Notices may have to be served and interested parties brought before the court before any adjudication may happen on the estate. This may become a nightmare for your loves ones you leave behind who may be in urgent need of such assets after you are not around. All this could be avoided through sensible planning, nominations and making a timely will. In absence of a will, the process regarding immovable property involves another different set of procedures. Legal Heirs may have to establish their entitlement before the relevant revenue, municipal or land-record authorities and undertake mutation and related formalities. The larger point being, a demise without proper will and nomination does not make succession impossible, it makes it unnecessarily difficult for the people you leave behind.

A Spouse Does Not Automatically Inherit Everything

Another widespread misconception, that also becomes the reasons for a lot of litigation is that when one spouse dies, the surviving spouse automatically becomes entitled to the entire estate of the deceased spouse. That is not necessarily so. The correct legal position is that if someone dies intestate (without a will), the surviving spouse may be only one of several legal heirs. Depending upon the personal law applicable to the deceased and the surviving family structure, their children, parents or other relatives may also have inheritance rights. The surviving spouse therefore does not acquire sweeping ownership over every asset of the deceased. This is also why making a Will becomes so important. If you have a particular desire about the transfer of your estate after you are no more, regarding your spouse, children, parents, friends, dependants or anyone else you care about, do not leave that intention to assumption. Put it in writing in the form of a will.

What Should a Good Will Contain?

A Will should begin with something very basic: an inventory of your assets and belongings. I have seem people fight for even one ring the deceased was wearing at the time of death, besides the larger estate of the Deceased. Before deciding who gets what from your estate, identify what you actually own. List your properties, investments, bank accounts, securities and other significant assets. Then consider how you want those assets distributed after your death.

A thoughtfully prepared Will should go beyond simply saying, - I give Property A to X and Property B to Y. Especially in cases where you want the distribution of your assets in a more unusual manner — for instance, where one family member receives substantially more than another, somebody from the family is excluded from your will, or a significant asset is left to a friend or caregiver—I t can be useful to record detailed reasoning behind such a decision.

There may be perfectly legitimate reasons for you in doing so. A friend may have cared for someone during old age. One child may already have received substantial assistance during the testator's lifetime. A particular person may have looked after a business or property for decades. Therefore recording the circumstances surrounding such decisions can provide valuable context if the Will is subsequently questioned/challenged by someone from even within the family. Also the Will must deal with the residuary estate—in other words, what happens to assets that were omitted, subsequently acquired , or otherwise not specifically dealt with in the will.

One’s liabilities should not be forgotten either while writing a will. If any of your assets are carrying a loan or other financial obligation, clarity about how that liability is to be dealt with can further prevent another source of future conflict.

Witnesses, Registration and the Executor

Finally, execution of the Will deserves as much attention as drafting it. The witnesses that you choose to witness your will should be people in whom you have the confidence and who can, if necessary, testify in the court about the proper execution of the Will. After a Will eventually comes into operation, its author ( the deceased ) is no longer alive to explain the circumstances in which it was signed. Although registration is not compulsory for every Will in India, registration is another prudent additional safeguard and may lend greater evidentiary assurance regarding its existence and execution of the Will.

Equally important is the appointment of an executor in a will. An executor is the person entrusted with carrying the Will into effect after the testator's death—bringing the Will forward to the world and taking the necessary steps to administer the estate in accordance with its terms. A beautifully drafted Will that nobody knows about, nobody can locate, or nobody is able to find after your demise defeats the entire purpose.

A Will Should Prevent Litigation, Not Create It

The objective of making a Will is not simply to distribute wealth. It is to reduce uncertaintyand fights and conflicts amongst your legal heirs. A poorly drafted Will can become the subject of litigation. Questions may arise regarding its execution, the mental capacity of the testator, unexplained exclusion of natural heirs, subsequent Wills, witnesses, or the circumstances surrounding its preparation. This is why I generally recommend obtaining proper legal assistance when preparing a Will, particularly where the estate is substantial, the family structure is complicated, or the proposed distribution is likely to be contentious.

A careful planning today can save one's family and loved ones months—or sometimes years—of procedural difficulties and conflict tomorrow.

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