Estate planning or succession planning is vital, if individual wish to avoid disputes over their assets when they are no more. It obtains special significance when they want to distribute the assets in an unequal manner.
It could be that individual wish to leave the controls of the assets with their wife instead of their children or they may also want to make an inheritance to their friend or a trusted old-age companion. All this can be done only by means of a clearly written Will. Though a Will is considered the best method of leaving legacy according to their wishes, it is not the only way. Individual can also nominate the property or gift it before death. Each method has its pros and cons; so let’s examine them.
• Nomination is not enough
Whenever one opens a bank account or purchases an asset, one fills up a nomination form along with it. Most of us believe a nomination means that the asset will be transferred to the nominee after the death of the asset owner. Nomination, however, simply means a right to receive the asset and not own it.
Nomination only delivers for the convenience of transferring the property in question from the name of the dead to the nominee. The asset, however, can only be claimed by the heirs/ legatees of the dead in accordance with the law of succession governing them”. A nomination can, however, be valuable when there is no possibility of contest – if there is only one beneficiary or if all the beneficiaries are in agreement about the nominations.
• A loving gift
Another interesting way to leave a legacy is through a gift deed. The gift deed must be made during the lifetime of a person. It is mandatory to be registered under the Indian Registration Act, in situation of immoveable property. Individual have to pay stamp duty of 2 % on the value of the gift, that is the property in question, at the time of registration, if the gift is made to a family member.
This also can avoid any confusion and smoothen the procedure of transfer property. Choose to gift away individual property after much thought. Gifts, once given, cannot be taken back simply. It has to be done with the agreement of both the parties. This leaves a grey area where the person making the inheritance may not feel comfortable losing control over the asset during his lifetime.
• The way of Wills
One should make a Will soon after one has assimilated some assets. Wills are not essentially for old people. In fact, it is better to make a Will at a younger age. One benefit is that it evades the possibility of the legitimacy of the Will being contested on grounds of unsoundness of mind at the time the Will was made.
A Will becomes effective only after death. There is no restriction on the way a person can deal with his or her property even after writing the Will. To make a Will truly work, there should be an executor, who would be trusted with the responsibility of ensuring that the assets are dispersed according to the provisions of the Will.
Do make sure s/he is willing to take up the responsibility. A Will should be signed by the testator in the occurrence of at least two witnesses. The full names and addresses of the witnesses should be noticeably indicated in the Will.
Though not vital, it is better if one of the witnesses is a medical practitioner, who should certify that the testator is of sound mind, particularly if the testator is at an advanced age. A witness should neither be a receiver nor an executor of the Will.
A Will must always be dated. If more than one Will is made, the one of the latest date will invalidate all the previous ones. In fact, it would be better to make a statement nullifying all other Wills. The pages should be numbered to avoid fraud. A Will should be simple and, as far as possible, unconditional.
A Will can be hand-written or typed. No stamp paper is essential. It essential not be registered. The value of assets frequently fluctuates, so it is better to expressly mention the value that each beneficiary will receive in percentage terms rather than absolute numbers, unless it is pure cash.
Whenever changes in the family conditions or other reasons need a change in the Will, the structure of the Will can be amended. Even if there are changes in the nature of the property or assets, an amendment may be desired. So take it out at regular intervals and read it.
• Creating a trust
A Will carries numerous disadvantageous in its execution. Obtaining a probate and distribution of assets is a time consuming and expensive procedure. Another gradually popular way to manage assets is to create a trust. A trust includes transferring of one’s estate to a trustee for certain beneficiaries. A trust provides for management of the estate during one’s lifetime and also delivers for distribution and management of one’s wealth after death.
The trust route can be used for dispersal of assets not only for the present generation but also for future generations. The money can be held and managed by trustees for minor children until they reach maturity. The trust, as a route, is just about catching up in India, though it is a very popular concept in the West.
As we all know that estate planning or succession planning is vital, if individual wish to avoid disputes over their assets when they are no more. It obtains special significance when they want to distribute the assets in an unequal manner. But wealth that is inherited rather than earned. Wealth, wealthiness – the state of being rich and affluent; having a plentiful supply of material goods and money; “great wealth is not a sign of great intelligence” and only 21% of millionaires received any inheritance at all. Just 16% inherited more than $100,000. And get this: Only 3% received an inheritance at or above $1 million! An inheritance is a financial term describing the assets passed down to individuals after someone dies. Also for business most inheritances consist of cash that’s parked in a bank account but may contain stocks, bonds, cars, jewelry, automobiles, art, antiques, real estate, and other tangible assets. Paying off high-interest debts, like credit cards, is one good use for an inheritance. You generally won’t owe tax on money you inherit, but other inherited assets—such as securities, retirement accounts, or real estate—can have tax implications. But when someone wanted to start their own business off course this all things help them for sure but before that they need to provide a proper bankable project report so that they are able to get a bank loan to run their daily business activities but first of all they need to know How to Prepare Project Report for Bank, How to Prepare CMA Data, etc. so they can get bank loan for their project report. Once they get bank loan for their project they can apply for subsidy DPR even they can get CMA preparation tool, CMA online preparation tool, CMA DIY tool on banks online portal for more information or they can even Download CMA for free for their acknowledgement.
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