WRITING A WILL? AVOID THESE MISTAKES
Find out where you can go wrong during estate planning and what to do to ensure your assets are passed on smoothly to your heirs
RIJU MEHTA
TIMES OF INDIA 30.04.2018
Where there’s a will, there’s usually someone ready to contest it. Where there’s none, someone is ready to fight over the inheritance anyway. Does this mean writing a will is an exercise in futility? “No, it is not. While law allows a person to voice concern over a person’s inheritance, if a will is made properly, the objection can be dismissed easily,” says Rohan Mahajan, Founder & CEO, LawRato. A will reduces expense, effort and paperwork, not to mention disputes within the family. While writing the will itself is a simple task, it is best to do it under legal supervision, consulting a lawyer or online will-makers. “This is because on your own, you are likely to overlook many details that can result in legal battles,” says Raj Lakhotia, Founder, Dilsewill, an online will-maker.
1 Not having a will
This is the biggest mistake and a step that needs to be taken as soon as you hit your 50s, or earlier if you have multiple assets and properties.
More time and higher expenses: In the absence of a will, legal heirs are forced to spend large sums to acquire mandatory documents like a succession certificate or letter of administration, in order to transfer titles, cash, investments, assets or properties, not to mention paying prohibitive lawyers’ fees. A succession certificate is required in the case of a movable property, while the letter of administration is needed in the case of an immovable property. While having nominees helps with the immediate transfer of cash and certain movable assets, you need the legal documents because a nominee is only a caretaker of assets and will have to pass these on to the legal heirs.
Undesirable distribution of assets:
A will helps decide which asset you want to give to which heir, in what proportion. Without one, you have no power over who inherits your assets and the court follows the succession acts as per your religion. For instance, Hindus, Buddhists, Jains and Sikhs are governed by the Hindu Succession Act, 1956, and Hindu Succession (Amendment) Act 2005.
2 Drafting incorrectly
You can draft the will either on your own, through a lawyer, or via any of the online will-makers. If any detail is not precise or you get it wrong, the will can be easily contested in court. Make sure you enter the personal details, including name, address, place and date; put in the full name and relationship of beneficiaries; mention the assets precisely; have it done in the presence of two witnesses; and sign it along with the witnesses and their details. “The most important aspect of a will is a valid signature of the person making it. Since a will can be written on a blank paper, the signature is the only authentic detail,” says Mahajan.
Equally important are the three declarations—that you are revoking all earlier wills, that you are of sound mind, and that you are not making the will under any pressure. If a person is old, attach a doctor’s certificate certifying his sanity. You could also register the will, as it offers a degree of authenticity since it has been approved by a government official. Remember, that a registered will can be as easily challenged as a non-registered will. “Registering minimises the grounds on which a will can be challenged. Since soundness of mind, forged signatures and drafting under coercion are common grounds for challenging a will, a visit to the registrar and being photographed bring down the possibility of it being contested on these grounds,” says Jasmeet Singh, Advocate, Delhi High Court.
3 Not being specific
“Make your will as specific as possible. Mention each bank account, locker number, or property details,” says Singh. List all your assets, movable and immovable, in detail. For investments and insurance, list the scheme name, number, financial institution and insurer, along with the addresses. For more than one property, distinguish each one clearly by listing dates of purchase, addresses, etc. As for heirs, don’t forget to mention the full name, your relationship with him, and the assets you want to give.
4 Not updating the will
If there is any alteration in the status of assets or heirs, you should draft another will to incorporate the changes. Any lifestage development, such as the birth of a child, marriage or divorce, will call for a redistribution of assets. If any asset has been sold or new ones bought, these will have to be removed or included. All you have to do is to draft a new will, including a declaration that it is your final will and revoking all previous wills and codicils. Also register the updated will, though it doesn’t mean that the unregistered will shall not be considered by the court. As per law, the last drawn will is considered whether registered or not.
5 Wrong executor
A common mistake is appointing relatives or friends in the same age bracket, or minor children, as executors. “Ensure that the executor is the best choice for the time-consuming and complex job. He/she must be trustworthy, know about your wishes, and work according to your will, not his own,” says Mahajan. To ensure objectivity, you could also get a thirdparty administrator for a nominal sum.
6 Gifting while alive
Gifting assets during one’s lifetime may not be a good idea. “If you gift an asset while you are still alive, it will be immune to challenge. But it can also make old people vulnerable because once the property is in the hands of children, they can ill-treat parents,” says Singh. If, instead, it is willed to the child, the balance of power remains with parents. “If you give away everything, how will you live?” asks Lakhotia.
“Before you decide to gift, know the difference between a gift deed, and a will. A will, be it registered or not, is revocable during the lifetime of the testator. On the other hand, a gift deed, once executed, is irrevocable,” says Mahajan. As for tax, any gift to specified relatives is exempt from tax in the hands of the receiver. In case of an immovable property given as gift to specified relatives, it will invite stamp duty.
7 Neglecting illness
It is important to make provisions in the will in case you suffer from a terminal illness, disability or are in a coma. Mention who will take charge of your estate and financial affairs, and if you have kids, who will be their guardian. You could even appoint a power of attorney or set up a trust to handle your affairs. You can now also pen down a living will, as per a recent Supreme Court ruling. You can decide the particular line of treatment or its withdrawal, if you want, by appointing an executor to take the health-related decisions on your behalf.
Find out where you can go wrong during estate planning and what to do to ensure your assets are passed on smoothly to your heirs
RIJU MEHTA
TIMES OF INDIA 30.04.2018
Where there’s a will, there’s usually someone ready to contest it. Where there’s none, someone is ready to fight over the inheritance anyway. Does this mean writing a will is an exercise in futility? “No, it is not. While law allows a person to voice concern over a person’s inheritance, if a will is made properly, the objection can be dismissed easily,” says Rohan Mahajan, Founder & CEO, LawRato. A will reduces expense, effort and paperwork, not to mention disputes within the family. While writing the will itself is a simple task, it is best to do it under legal supervision, consulting a lawyer or online will-makers. “This is because on your own, you are likely to overlook many details that can result in legal battles,” says Raj Lakhotia, Founder, Dilsewill, an online will-maker.
1 Not having a will
This is the biggest mistake and a step that needs to be taken as soon as you hit your 50s, or earlier if you have multiple assets and properties.
More time and higher expenses: In the absence of a will, legal heirs are forced to spend large sums to acquire mandatory documents like a succession certificate or letter of administration, in order to transfer titles, cash, investments, assets or properties, not to mention paying prohibitive lawyers’ fees. A succession certificate is required in the case of a movable property, while the letter of administration is needed in the case of an immovable property. While having nominees helps with the immediate transfer of cash and certain movable assets, you need the legal documents because a nominee is only a caretaker of assets and will have to pass these on to the legal heirs.
Undesirable distribution of assets:
A will helps decide which asset you want to give to which heir, in what proportion. Without one, you have no power over who inherits your assets and the court follows the succession acts as per your religion. For instance, Hindus, Buddhists, Jains and Sikhs are governed by the Hindu Succession Act, 1956, and Hindu Succession (Amendment) Act 2005.
2 Drafting incorrectly
You can draft the will either on your own, through a lawyer, or via any of the online will-makers. If any detail is not precise or you get it wrong, the will can be easily contested in court. Make sure you enter the personal details, including name, address, place and date; put in the full name and relationship of beneficiaries; mention the assets precisely; have it done in the presence of two witnesses; and sign it along with the witnesses and their details. “The most important aspect of a will is a valid signature of the person making it. Since a will can be written on a blank paper, the signature is the only authentic detail,” says Mahajan.
Equally important are the three declarations—that you are revoking all earlier wills, that you are of sound mind, and that you are not making the will under any pressure. If a person is old, attach a doctor’s certificate certifying his sanity. You could also register the will, as it offers a degree of authenticity since it has been approved by a government official. Remember, that a registered will can be as easily challenged as a non-registered will. “Registering minimises the grounds on which a will can be challenged. Since soundness of mind, forged signatures and drafting under coercion are common grounds for challenging a will, a visit to the registrar and being photographed bring down the possibility of it being contested on these grounds,” says Jasmeet Singh, Advocate, Delhi High Court.
3 Not being specific
“Make your will as specific as possible. Mention each bank account, locker number, or property details,” says Singh. List all your assets, movable and immovable, in detail. For investments and insurance, list the scheme name, number, financial institution and insurer, along with the addresses. For more than one property, distinguish each one clearly by listing dates of purchase, addresses, etc. As for heirs, don’t forget to mention the full name, your relationship with him, and the assets you want to give.
4 Not updating the will
If there is any alteration in the status of assets or heirs, you should draft another will to incorporate the changes. Any lifestage development, such as the birth of a child, marriage or divorce, will call for a redistribution of assets. If any asset has been sold or new ones bought, these will have to be removed or included. All you have to do is to draft a new will, including a declaration that it is your final will and revoking all previous wills and codicils. Also register the updated will, though it doesn’t mean that the unregistered will shall not be considered by the court. As per law, the last drawn will is considered whether registered or not.
5 Wrong executor
A common mistake is appointing relatives or friends in the same age bracket, or minor children, as executors. “Ensure that the executor is the best choice for the time-consuming and complex job. He/she must be trustworthy, know about your wishes, and work according to your will, not his own,” says Mahajan. To ensure objectivity, you could also get a thirdparty administrator for a nominal sum.
6 Gifting while alive
Gifting assets during one’s lifetime may not be a good idea. “If you gift an asset while you are still alive, it will be immune to challenge. But it can also make old people vulnerable because once the property is in the hands of children, they can ill-treat parents,” says Singh. If, instead, it is willed to the child, the balance of power remains with parents. “If you give away everything, how will you live?” asks Lakhotia.
“Before you decide to gift, know the difference between a gift deed, and a will. A will, be it registered or not, is revocable during the lifetime of the testator. On the other hand, a gift deed, once executed, is irrevocable,” says Mahajan. As for tax, any gift to specified relatives is exempt from tax in the hands of the receiver. In case of an immovable property given as gift to specified relatives, it will invite stamp duty.
7 Neglecting illness
It is important to make provisions in the will in case you suffer from a terminal illness, disability or are in a coma. Mention who will take charge of your estate and financial affairs, and if you have kids, who will be their guardian. You could even appoint a power of attorney or set up a trust to handle your affairs. You can now also pen down a living will, as per a recent Supreme Court ruling. You can decide the particular line of treatment or its withdrawal, if you want, by appointing an executor to take the health-related decisions on your behalf.
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