Why Will Drafting Is The Most Important Piece in Your Financial Planning Jigsaw!

Retail investors in India park their savings and inherited money in portfolios like mutual fund, life insurance, public provident fund, bank deposit, gold jewelry, and small residential plots. Besides, they also purchase a flat and personal vehicle on EMI basis. From time to time, they endeavor to put more money in some of these portfolios. A small investor is typically very thoughtful about her/ his family’s future, which is evident from these investments. Even so, India’s growing middle classes do not often pay the same kind of attention to questions like:

Who is going to inherit all of this property and wealth, and in what proportion after our lifetime?

In many portfolios mentioned above, people make nominations. However, contrary to popular perception, a nominee is merely a person who collects the wealth or property upon the death of the owner, and holds the wealth as ‘trustee or custodian’ on behalf of the legal heirs of the owner. A nominee, unless she/ he is a legal heir of the owner, cannot claim ownership of the wealth or property of the owner. What is the way out, then? Write a will, i.e., a document that designates who will receive a person’s property and possessions, when and in what proportion.

Making a will is not mandatory under Indian law; but increasingly, people are finding it a simple, convenient, and affordable way to distribute their wealth and property among their legal heirs. It also helps to avoid unnecessary, long-drawn, and expensive legal battles over inheritance, and prevents breakdown of family relationships.

There are various types of wills to meet the requirements of various classes of people. In the case of, say, a small middle-class family, we would recommend a ‘joint will’, wherein both spouses bequeath all their movable and immovable assets to each other. The will does NOT take effect during the lifetime of either of the spouses. After their lifetime, their properties shall be distributed among their children as per wishes of parents mentioned in the joint will, if they have attained the age of majority (i.e. 18 years of age). If not, a guardian nominated by their parents will serve as the custodian of the inheritance from the will, until the children turn major. Now that the spouses in this case have written a will, what happens to the nominations they have made in the past?

A will is an overarching instrument that has the power to nullify all other nominations made in the lifetime of the makers of the will (testators), in respect of their movable and immovable assets. In effect, a will moves all the estate of the owners under a single umbrella and ensures they are distributed to their loved ones in time, and without any legal hassles. So, it’s time – it’s about time you get started by making a will yourself.

For more on how you can draft a will that’s simple yet comprehensive, covering all of your movable and immovable properties in a few minutes, connect with us and we will be more than happy to answer your queries on will preparation.

To know more, please write to us at iwill@icicisecurities.com