This is What Happens if You Don’t Make a Will

Often, we Indians find umpteen excuses for not creating a will that can smoothen the legacy planning in our absence. What excuses do we make?

1. I am too young.
2. It is too tedious and not worth the effort.
3. It is costly.
4. I will make it later. There’s enough time.
5. My family thinks it’s inauspicious to make a will
6. I don’t think I have enough property to make a will

Of course, there could be many more reasons why we do not want to make a will. It is as close to thinking about what happens after us. And we mostly want to avoid that question. For some, it can cause anxiety too. However, here is a little something to prompt you towards creating that will.

Unclaimed amounts

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Here are some facts and figures available in the public domain but something which most people are not aware of.

• A whopping Rs 25,000 crores of unclaimed money is lying with various insurance companies, according to a May 2022 report by the Insurance Regulatory and Development Authority (IRDAI). The maximum amount in this is because of policy holder’s death which their family did not claim.
• In Financial Year 22, the unclaimed amount in Indian banks across various states was Rs 48,262 crore. This money is across accounts not operated for 10 years, term deposits not claimed within 10 years from the date of maturity, etc.
• As of Mar 2022, the Employees Provident Fund Office (EPFO) had over ₹58,000 crores lying unclaimed in its accounts.

A 2021 Economic Times article pegged the total unclaimed investor amount as more than Rs 82,000 crore. This amount included the post office and mutual fund investments, including others mentioned above. The question you need to answer is, do you want to add to this amount, or can you ensure that your wealth goes to its rightful owners without any issues?

The Possible Scenarios

Here are the possible scenarios after your death, depending on your status, if you have not created a will.

1. You are single:

If you are single and childless and your parents are alive, they will receive your entire estate. If only one parent is living, your property will get equally divided among your siblings and the surviving parent. If neither parent is alive, it gets divided among your siblings. If there are no surviving siblings, nieces, or nephews, then the maternal and paternal side relatives get an equal share. If you are single with surviving children, the property goes to your children. If a child has died and there are grandchildren, they get a share.

2. You are married:

If you are married and survived by your spouse and children, the entire estate will go to your spouse and children. If not, it will get divided among your spouse, parents, siblings, and relatives, depending on the nature of the property. For example, self-created, inherited or ancestral, etc.

3. You are in a domestic partnership:

The domestic partnership rules of the state you were in will apply as each state has different rules.

4. You have been in an unmarried relationship:

Indian laws only consider relatives for property inheritance and not unmarried partners. Hence, it is a big issue for the surviving partner to get any share from the deceased partner’s estate.

All the above scenarios tell you why it is essential for you to make a will to avoid delays, legal fights, and confusion after your death. And for those who are grieving, this adds to the trauma. Even if you do not own property and only have financial assets, you should ensure nominations for all financial assets such as FDs, bank accounts, post office, Demat accounts, etc.

The above scenarios are applicable under the intestate laws that come into effect if you die without creating a will.

What should you do?

Start with estate planning as early as you can. It is never too early, and we may procrastinate too late! Making a will is not as cumbersome as many think it to be. Did you know that you could even handwrite a will? Or that Indian laws do not consider a nominee as a legal heir and only as a caretaker? Indeed, a lot of such information about our inheritance laws is not known to people, and they feel it is a cakewalk for their family to sort out their affairs after their death. There are no excuses for not making a will, whereas making a will is highly beneficial for the family. After all, you want the right people to get their share and not add to the unclaimed kitty that seems to be burgeoning by the day!