It is difficult, almost inconceivable, to believe and accept that death visits all our doorsteps. Nobody is spared. Like they say in the Harry Potter books, for the well trained mine, death is but the next great adventure, So how do you train yourself for death? We are not going to see the various methods in which to prepare yourself for death from a spiritual perspective. Instead, we are going to prepare ourselves to lead a life that is well planned so that death will not surprise us. So let us see today what a will in India is, and how to prepare a will?
One of my friends’ dad passed away recently. He was suffering from cancer and his death was expected. What was unexpected was the confusion that followed. Since he failed to make a will, his children fought for his property. There was widespread coverage in major newspapers because of which the whole family name got tarnished. And all of this because he did not prepare a simple will.
What is a will or legal will?
A will is a testament by a person by which he/ she instructs how their property is to be distributed after their death. Property here includes cash, bank balances, all kinds of assets and money lying in mutual fund accounts. It does not just mean physical immovable property.
Any will that is prepared according to law and is accepted by a court of law is called a legal will.
What is probate of will in India?
Probate means the process by which the legal executioner of a will proves in a court of law that the will is valid, legal and is the final will of the deceased. This is extremely important because the will has to be proven in a court of law for it to be enforceable. Therefore, the probate of will is critical.
What is the validity of a will in India? What is a valid will?
Under Indian law, a will is said to be valid only if it can be probated in a court of law. As we saw previously, probate means the process by which the legal executioner of a will proves in a court of law that the will is valid, legal and is the final will of the deceased. According to law, a will is valid for a period of 12 years from the date of death of the person. This is called the limitation period of the will.
How much does it cost to make a will in India?
Earlier, the cost of making a will in India used to be a lot. Nowadays, that has reduced tremendously as there are online portals for making the will. It can be made for as less as a thousand rupees today.
Who can make a Will?
A Will can be made by any person over the age of 18 who has the ability (sometimes known as testamentary capacity) to understand:
- What a Will is and what it does.
- The extent of their estate that they are passing on to their beneficiaries.
- Understand and appreciate the moral and/or legal obligations that they may have to certain people.
- Have no disorder of the mind that alters their understanding of any of the above.
Why is writing a Will important?
The preparation of a Will helps to make clear what your wishes are. For example, this might include your intentions regarding financial support that you provide to other people, or money which is to be left to a charity.
Under a Will, you can make various types of gifts:
- A specific legacy – a gift of a specific property, asset or personal belongings such as your car or jewellery.
- A set sum of money e.g. £1,000. This is sometimes referred to as a pecuniary, or monetary legacy.
- A share of what is left of the estate once any debts and taxes have been settled. This is known as the residuary estate. For example “50% of my residuary estate” will mean 50% of all of the assets that pass under a person’s Will, after the payment of any legacies, debts and taxes.
In addition to making straightforward gifts (often referred to as absolute gifts), a Will also enables a person to:
- Express their funeral wishes (although at present these are not legally binding).
- Appoint guardians for minor children.
- Appoint Executors – the people who will be responsible for giving effect to the wishes set out in the Will, paying any taxes (including Inheritance Tax, Capital Gains Tax and Income Tax) and ensuring that the estate is administered in accordance with the law.
- Create Trusts which can be used, for example, to safeguard assets for children or grandchildren, or give your spouse or partner the right to live in a property after your death.
- Appoint Trustees – the people who will administer any ongoing trusts in the Will.
Should these be re-ordered into priority? Executors, guardians, trustees, funerals?
How do I write a Will?
There are different ways in which you may prepare a Will. There are templates available online, or legal templates from shops such as WH Smith to help you write a Will. You may decide to use a Will writing service, either online or in person, or you might use a solicitor to help you.
Whilst a solicitor isn’t required to write a Will, consider taking advice to ensure the language used in the Will is clear enough to be interpreted as you meant it to be.
1. Estate planning for Will writing
It might be helpful to prepare a list of everything that makes up your estate. An estate plan is not just everything you own, it is everything you owe.
This might include
- Joint property or assets (which will usually pass to the surviving owner, such as a husband, wife, child, or sibling)
- Assets held in trust, such as life insurance policies or pension benefits
- Physical items such as cars and jewellery
- Bonds, shares, bank account details and ISAs
- Debts and liabilities
3. Naming beneficiaries in a Will
When leaving an estate to more than beneficiary, explain how it is to be shared amongst them. This might include allocating specific sums of money, a possession, or a percentage of the estate.
5. Naming an executor in a Will
The executors of a Will are is the people responsible for paying any outstanding debts, and for distributing the estate amongst the beneficiaries.
Ideally, it is recommended to choose at least two (and up to four) executors. They are all required to act jointly in any decision which might influence who is chosen. It can be someone who is also a beneficiary, though they must be at least 18 years of age.
Executing a Will can be quite complicated, even if the estate is fairly straightforward, so consider who is most able to accomplish this task.
7. Inheritance Tax
Inheritance tax is the tax applied to an estate after the estate holder dies, before it is passed to the beneficiaries.
It is the job of the executor(s) to make sure any inheritance tax due is paid.
The rules around inheritance tax are complicated, though there are exemptions. Gov.UK has a helpsheet which explains what the limits and exemptions are: https://www.gov.uk/inheritance-tax. The Society of Later Life Advisers (SOLLA) also provides advice on this: https://societyoflaterlifeadvisers.co.uk/
What makes a Will legal?
Once the Will is written, it must be signed and dated. Two witnesses must also sign and date it. The witnesses cannot be beneficiaries of the will.
A Will can be handwritten, and is still subject to the same requirements for signatures and witnesses.
Letter of Wishes
To accompany a Will, it is also possible to provide a Letter of Wishes. Though it is not legally binding, it can be used by the people administering an estate as a guide. For example, advice that might help the trustees to manage a Trust.
Whilst a Will can be made public as it goes through the legal processes, a Letter of Wishes remains confidential.
Is probate always needed to execute a Will?
There are exemptions to probate, such as a bank account where the account balance is a low amount. Whether or not probate is required to execute the Will, depends on the assets held by the estate.
Lawpack explains probate in more detail on their website: http://www.lawpack.co.uk/probate/articles/article7391.asp