Estate planning is not a very common term in India, whereas abroad, it is a must to settle the affairs of a deceased person. In India, at the most, few people make legal wills to settle their assets after their death. However, most often, we find that people somehow are reluctant or keep pushing the decision to make a will. And since death can occur at any time, it often puts families in trouble. Without a will, it becomes troublesome to settle claims and counterclaims, and at times, legal matters run for years. Estate planning essentially is done to avoid all this trouble for our family when we are no longer there.
What is estate planning?
An estate planning is purely the decision of the person who would like his assets to be managed orderly after his death. It could simply be a will stating his wish to transfer all assets to one or more persons. If the beneficiary of the will is more than one person and there are multiple assets, the will should consider all that. It should clearly list out all assets, including:
- Movable and immovable property
- Bank accounts
- Fixed Deposits
- Mutual Funds or any other investment portfolio
- Automobiles, etc.
In today’s times, even digital assets like email,
An estate planning may also be setting up a trust legally to manage the affairs. The trust will also have a designated person(s) to run it as per the person’s desire. They are referred to as trust executors or trustees. In a way, estate planning can start with individual assets as well by ensuring nominees for bank accounts, insurance, etc. If a person is running a business, then estate planning may also involve a proper business succession plan that transfers ownership.
Estate planning in India
Most lawyers can offer you estate planning services as it is a legal process in India. Some specialize in this field as well. Many provide online services as well, and they are legal too. Other than drafting it out in the legal language with the requisite points, nowadays, people even videotape estate planning or making a will.
If a person doesn’t have many assets, then making a will or estate planning can be easily done in a week or two. But, if it involves numerous properties and family members, it may take a month or two to draft a complete document. Also, if there are people mentioned in the will who are living abroad or are citizens of other countries, etc., these things need to be considered as per existing laws.
At times, people also designate someone trustworthy as the power of attorney to execute things on their behalf. It is equivalent to delegating a person legally to undertake all transactions on your behalf. Hence, this decision should be taken after proper consideration as there have been times when such power has been misused. Also, if you have appointed someone as power of attorney, then the same should be noted as part of the estate planning process to avoid any clashes, etc.
When one makes a will, one doesn’t know when one passes away. People change, so do circumstances. Also, one may live for quite long after making a will and may acquire more assets in the intervening time. You may want to add or remove people into your will or estate plan. Hence, what is essential is to ensure that the will is periodically updated. Ideally, wills or estate plans should be reviewed every three years as even taxation, or other related laws may also change. Also, in India, the succession laws are different for different religions, and this too should be taken into consideration.
Even if one does not own large assets, it is always better to have at least a legal will to avoid complications. Our loved ones can then easily sort the matters and get things done when we are no more. It is important to keep them informed about all matters, even if say, you have signed as a guarantor to someone for a loan, etc. Sometimes, these little things become big issues post our death.