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Where there is a will there is peace

“When should one make his or her will?” A lawyer asked this question to the packed auditorium. Pat came the replies like: ‘why do I need a will?’, ‘as soon as possible’, ‘after retirement’, ‘after one’s marriage’. To this, the lawyer replied, “One must make a will at least one day before he or she is about to die.” And the crowd burst out laughing and had also understood the point the eminent speaker was making.

During one’s working life majority of us focus on fulfilling dreams of career, business or profession, dreams of having a family, dreams of owning a home etc. Initial years are full of energy, desire and about achieving goals. Fuel to this energy comes from gratification and many a times gratification comes from spending. During this period Savings and Investments normally take a back seat. Investment starts with small savings for home, marriage and future uncertainties.

Over a longer periodperiod, these savings start getting converted into Wealth. Need for preservation arises when goals are in the process of completion or have been achieved. Preservation as the word denotes is to protect what has already been created. Thus Kknowingly or unknowingly we all go through these two stages of wealth creation and preservation. HoweverHowever, a lot of us tend to forget or assume the most important third step i.e. of tTransmission. In At this stage even though one is not looking at excessive returns with high volatility, he is still expecting to generate better than inflation returns and keep his wealth intact with over time. Preservation involves more of discussing and making small changes to portfolio that already exists and taking care of changing needs without taking excessive risk. The third step that completes the Wealth management is Wealth Transmission. Without having this step covered Wealth Management remains incomplete.

Why is Wealth Transmission so important? Are we ready to discuss this step openly with the spouse and children? and spouse? Does it require an in-depth understanding of law? These are some questions that we must find answers to.

Transmission is important because it takes years or even decades to create and preserve wealth but the same wealth can get lost or reduced if it is not transmitted the way its creator desired. It is imperative that an individual pays even more attention to this third step. Dissolution is certain in life but what is uncertain is its time. And because this time is uncertain one needs to get prepared.

Simplistically, Wealth can be transmitted by a simple will. A will is an important document that enables an individual to rightfully distribute his assets and wealth to whomsoever he wants to after his death. In this way, a person can ensure that his wishes are carried out with regards to distribution of his assets. All assets need to be mentioned that are owned by creator need to be mentioned. Not only it isis it the right way to transmit, it is the most economical way as well.

In case a will is not made, post dissolution the transfer of assets is subject to state court fees and inheritance laws. For example, to get a succession certificate in Mumbai, individuals have to pay court fees of fixed amount say Rs. 75,000/- or 0.75% of Assets whichever is lower where as in New Delhi court fees can be as high as 2 - 3% of Assets. This fee needs to be deposited in court as liquid money which in itself can be a big sum depending upon the total assets that heirs are looking at transferring. Legal fees and other costs associated with court proceedings are additional.

Post amendment in 2005 to the Hindu Succession Act 1956, married daughters are also equally entitled to parent’s assets. Take an example where there are 2 married daughters and an unmarried Son. If the testator (creator of will) dies intestate (without writing a will) his property would get equally divided between 3 children. Now consider a situation where the above daughters do not want their share as they are well settled and want the brother to get all property and other movable assets, even this can create complexity if daughter’s In-laws desire differently. This leads to unnecessary complications in relations and can convert best of relations into sour ones.

A Probate (Certificate under the seal of the court and signed by one of the registrars, certifying that the will has been proved) is required in Jurisdiction of Mumbai, Chennai and Kolkata high court. Under other court jurisdictions Probate is not compulsory and wishes of testator directly can be exercised as per will by the executor.

It does require good understanding of Inheritance laws but at the same time there are services available that individuals can take. It takes an experienced estate planning lawyer to evaluate individual’s particular situation and advise him/her of the options that best suit individual’s estate planning needs and goals. Companies like Universal Trustees, willeffect.in etc can bridge this gap. Individuals can get customized solutions for by paying a small fee.

Important Steps to be followed for making a will

Step 1: Drafting a will

While preparing a will it is essential to take extra precautions. One wrong word or missing signature can change the entire intent of a will. Getting a will drafted with the help of lawyer can help you avoid costly mistakes.

Step 2: Attestation of a will

Once the will is drafted, the testator (the person who is making the will) needs to sign or affix his mark to the will. The signature or mark of the testator should appear clearly and should be legible. It should appear in a manner that is appropriate and makes the will legal. A will should be attested by two or more witnesses, each of whom has seen the testator signing or affixing his mark on the will. Each of the witnesses should sign the will in the presence of a the testator. A witness need not read the contents of the will before signing it.

Step 3: Registration (Under section 18 of The Registration Act, 1908, the registration of a will is optional)

However, registering a will gives you strong legal evidence that the proper parties had appeared before registering officers and the latter had attested the same after ascertaining their identity.

- A will must be proved as duly and validly executed as required by the Indian Succession Act.

- Once a will is registered, it is placed in the safe custody of Registrar and therefore cannot be tampered with, destroyed, mutilated or stolen.

- It shall be released only to the testator himself or, after his death, to an authorized person who produces the Death Certificate.

- The cover should be super scribed with the name of the testator or his agent with a statement of the nature of the document.

Procedure for registering a will:

A will is to be registered with the registrar / sub – registrar with a nominal registration fee. The testator must be personally present at the registrar’s office along with witnesses.

A will does not require stamping.

All of above only applies to wills and codicils made by Hindus, Buddhists, Sikhs or Jains.

Deepak Jaggi is currently working as Executive Director and Head - Retail Sales in DHFL Pramerica Asset Managers Private Limited. Deepak has over 2 decades of experience in Sales & Distribution of Financial Products including organizations like HDFC Standard Life Insurance, Kotak Life Insurance and Zurich Asset Management.