Why do you Need to Make a Will?
"Estate planning is an important and everlasting gift you can give your family. And setting up a smooth inheritance isn't as hard as you might think. " - Suze Orman
A good financial plan is not just one that tells you how to meet your financial goals in life, it is one that chalks out what happens to your properties and investments after you have passed away. In financial planning parlance, this is called “estate planning” and the cornerstone of financial planning is to make a will. When people are in the prime of their youth, they tend to think that making a will can wait till they are old and ripe, but that is in fact a wrong approach.
It is wise to begin estate planning and thus making a will as soon as possible in your life, given that life itself is so uncertain. A will therefore remains as a legal document declaring the intentions of the person and what he wishes to do with his property after his death.
Here are three compelling reasons why you should make a will
- A will makes it much easier for your family or kinsmen to sort out your finances after you are gone. In the absence of a will, this process can be a very painful and stressful one and may cause discord among your family members.
- A will can help your family members to incorporate their inheritance into their own financial plan in a disciplined manner and reduce their debt burden or result in substantial gains on planned investments.
- In case you want to leave something behind for an individual who is not your immediate family or an organization you want to make a charitable contribution, a will ensures that a smooth disbursement happens for the same.
If you do not leave a will or die “inestate” , your estate is going to be distributed as per the succession laws based on your religion. The Indian Succession Act of 1925 is applicable to Hindus, Jain, Sikhs and Buddhists. Muslims, can choose to plan their estate according to the laws of the Shariah.
Here are the fours basic things that you should remember about making a will
- Anyone who is of sound mind and is an adult (21 years old at least) can make a will. A will can be written in any language on plain paper or stamp paper.
- The will should have all the details of your property such as real estate, stocks, bonds, mutual fund investments and their current value. You must also indicate where these documents are stored. If they are kept in your bank locker, in which you will also keep a copy of your will, you must clearly know the process of how these documents are to be released after your demise. This process should be clearly communicated to a trusted family member or the executor of your will.
- There are two parties in will, the beneficiaries who will inherit the estate as per the wishes of the person making the will and the witness or witnesses in whose presence the will is drawn up and signed. The witnesses cannot however be a beneficiary of a will.
- The maker of the will or the testator must assign an executor of his will who will take the responsibility of executing the will as per the wishes of the testator after his demise. He must obtain the probate or the legal document from a court of law that gives him the permission to execute the will as per the wishes of the testator.
Although you can write a will yourself and sign it in the presence of two independent individuals, it is always better to hire the services of a lawyer to do the same. If the will is not written well or is not legally binding, it can cause more harm than you think to your inheritors. If you want to leave a good legacy for your family and ensure that they are not faced with any unnecessary financial hassles after your demise.