How to save your hard-earned wealth from legal hassles?
Covid, has certainly proved one thing that life is very very unpredictable. But are we prepared to deal with it?
Let me tell you that at least you are not prepared for it. Let’s do a fact check.
Yes, you have taken a life cover, a medical cover et all and you do have drawn a financial plan too, to cover for every possible scenario and contingency. But do you have your Will ready? With the new Hindu Succession Act, 2020, now your daughter/Son in Law are going to become equal share holder in your property like your Sons, unless and until you have a Will.
I know you are saying Will and me, why and what’s the hurry etc.? It’s 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.
A registered Will is a strong legal document and, in case of a dispute, assumes paramount importance.
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. He will be able to structure the document based on provisions within the legal and income tax framework.
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.
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.
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.
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.57