Personal Finance

Making a Will? Here are some dos and don’ts

Sreekumaran N. | Updated on July 22, 2020 Published on July 22, 2020

Contrary to the general belief, a Will need not necessarily be stamped or registered

The importance of a Will can’t be over-emphasised, particularly in the time of this unprecedented pandemic. More and more individuals and families are now showing a deep interest in drafting a Will, after being jolted out of their complacency by Covid-19.

Many are, however, not sure what constitutes a Will or what are its essential features. Online advice is just a click away. But drafting a Will, more often than not, is not that easy an exercise and not all can grasp it without the assistance of someone knowledgeable. It is therefore, essential to understand the basic features of a Will to avoid common mistakes.

In simple terms, a Will is a legal declaration of the intent of the testator ― the person making the Will ― with respect to assets that are to be distributed after death. “There is no specific format for a Will, which can also be hand-written on a plain paper. There is no requirement to either stamp or register a Will,” informs Gopika Pant, Managing Partner, Indian Law Partners.

But at times even the simplest job can go haywire. Instances are many. “Any mis-step in a self-made Will could jeopardise your entire estate plan and ruin your legacy. You must be careful in clearly identifying your legatees with personal identification details, and the assets you wish to bequeath,” writes Rishabh Shroff, Partner, Cyril Amarchand Mangaldas, in a blog.

The very basic feature of a Will is that it should mention the name of the executor ― the person who will oversee the distribution and settlement of assets in accordance with the wishes of the testator. Pant says it should also clearly set out the assets and the manner in which these should be bequeathed to beneficiaries. She stresses that “appointment of an inexperienced or biased executor or an executor with an ulterior motive” is a drawback often found.

“It is recommended that you discuss the appointment with that person prior to making the Will. Your spouse and/or your eldest child are typical options,” says Shroff, adding that every family and situation is, however, different.

Another vital point to be kept in mind is that the Will should state that it has been executed by the testator in sound health and the testator’s mental faculties are working fine. The Will should also unambiguously mention that it has been voluntarily made without any coercion.

Besides, it should be attested by two or more independent witnesses. A beneficiary can be the executor, informs Pant. Making the legatee witness the Will, however, is a major flaw, in which case a bequest to the legatee would be void, she pointed out.

“The Will should also include a residuary clause which should state the name of the heir to the residue of the assets of the testator which have not specifically been bequeathed to a particular person or any property which the testator may have erroneously left out while drafting the Will,” says Pant.

A drawback that is commonly found in Wills is that it is not specific and detailed. An ambiguous Will causes disputes. Bequeathing assets to a minor without appointing a guardian for those assets till the minor attains maturity is another frequently observed shortcoming, says Pant.

Yet another common fault is that some Wills are not updated to include assets acquired after making the Will.

Pant cited a recent case in which a testator made his Will stating all the specific assets owned, as on the date of the Will. Subsequently, the testator informed his legal heirs of certain shares and bonds which he acquired after making the Will and to whom he wished these assets should vest in, after his demise.

“However, the testator passed away without updating his Will and as a result, the assets had to be divided equally between all the legal heirs and the legal heirs had to incur extra costs and spend an enormous amount of time settling the assets among themselves (court fees, legal fees, etc.).”

That brings out the question of how one can revise the Will. In case of minor revisions, a Codicil is prepared as an amendment to the specific Will, which is then deemed to form part of the Will. The Codicil will itself state that it’s a part of and must be read with the specific Will, says Pant.

“In case there are substantial changes to the Will, it’s prudent that a fresh Will is drawn up to avoid ambiguities.”

Revision of Will is, however, vital in certain cases of wealth erosion. It depends on the number of beneficiaries in the Will and the nature of asset distribution among beneficiaries. “If there is an equal distribution of assets between two beneficiaries and one of the beneficiaries in the Will holds financial assets whose value has been significantly eroded, then the testator needs to compensate the same by providing equal value of new investments such as insurance, etc.,” says Shantanu Awasthi, Head of Products and International Business, Karvy Private Wealth.

Citing an example Awasthi said a large family had to revisit the estate-planning documents to include uncertain developments like the current Covid-19 pandemic, and assess the risks better, as the members were not prepared for this kind of impact on the family’s investments.

Common mistakes

Leaving the Will non-specific and ambiguous

Bequeathing assets to a minor without appointing a guardian

Not updating/revising Will to reflect changes in assets

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Published on July 22, 2020
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