Why preparing a will is important

Life is full of uncertainties and hence it is very important to plan things. While we place a lot of importance on asset creation, most of us don’t focus on how those assets would transition to our loved ones when we are not around. In the absence of a will, succession laws decide whom your estate will go to and it might not be aligned to your wishes.

What succession laws say

As per the Hindu Succession Act, if you are a Hindu male, do you know that your mother is entitled to an equal share as your wife and children in your estate if you die intestate? Further, your father will get a share in your estate only if your wife, children and mother are not there.

After your mother’s death, your mother’s share in your wealth will not come back to your wife and children. Rather, your siblings and father would also be the rightful claimants.

If you are a Hindu female, in the absence of your husband and children, your parents-in-law will be entitled to get a share in your property. Only if they are not there will your own parents be authorised to exercise any rights over your property.

If you have young children, and your spouse also passes away shortly after your demise, also without making a will, the court will appoint a guardian for your minor children. The court knows neither who will be a better guardian to your children or who they are close to nor how you want your children to be raised.

All these problems can be resolved with a little bit of planning.

How a will helps

If a Hindu male wants to ensure that his parents benefit from his property and after them, it comes back to his wife and children, a life estate can be created in favour of the parents.

Similarly, for a Hindu female, her parents can be made the beneficiaries or a life estate interest can be created in their favour so that they can enjoy the property during their lifetime, and it can come back to her chosen beneficiaries after their demise.

There may be a case where your children inherit a large amount of money under intestacy. However, they might not necessarily have the maturity to deal with this situation, especially when they have suddenly lost someone dear to them.

By making a will, you can defer the distribution of your estate to them until a later time or in stages, or you can set up a trust which allows for control over how and when their inheritance can be used.

In your will, you also can appoint a guardian for your children, and an alternative guardian if the first guardian is unable or unwilling to act.

Further, if you believe in philanthropy and want to do something for a charitable cause, the same can be done wherein you can dedicate some amount of money for such cause and/or you can have a charitable trust created if you wish.

Thus, an estate plan is necessary for everyone who wishes to execute a smooth transfer of assets due to their demise or incapacitation, irrespective of current age or size of estate.

So if you belong to the majority who haven’t planned their estate yet, it’s time to collect your thoughts and make a plan. After all, we all want to take care of our loved ones. Writing a will is one way to make sure they’re cared for even when you’re gone.

The writer is Managing Director, Ladderup Wealth Management