Pass it on smoothly

Inheritance battles seem the norm for the rich and the famous, whether or not there is a Will involved. For want of a Will, Dhirubhai Ambani’s sons fought one of the bloodiest succession battles, although his fortune was vast enough to provide for several generations of Ambanis.

 On the other hand, Priyamvada Birla, the lady who shot to fame after her death, made a Will. But the fact that the widow of industrialist MP Birla stunningly bequeathed a Rs5,000-crore estate to RS Lodha (also deceased now), a financial advisor and auditor to the entire Birla group, set the cat among the Birla pigeons. The angry clan ganged up to contest the Will, even though the group had previously partitioned their assets.

DH Ambani did not make a Will and it created a problem. Priyamvada Birla made a Will and it still created a problem. But, by and large, a well-drafted, properly-executed Will ensures that your wishes are honoured, sometimes after a bitter battle among your heirs, various claimants to your estate and some tweaking by the court.

Wills of the rich and the famous almost inevitably land in court but that’s because they have money to spend. For us, it is a good idea to create a document which spells out what you wish, rather than have your estate distributed under various laws of inheritance. If you do it well, it won’t be easily contested. How should you go about it?

Why Make a Will?
Before we get into that, many Indians think making a Will brings bad luck, says Dr SD Israni, corporate law expert. He talks of a client, who prepares a Will and updates it frequently, but has not signed the documents for years, probably fearing bad luck.

Changing family structures and growing prosperity is forcing Indians to realise the importance of a Will. For instance, until recently, a significant part of the assets of middle-class families comprised the family home and some land; inheritance was decided by the laws of succession. Daughters got their share of family assets by way of dowry or streedhan.

Today, middle class senior citizens have significant self-acquired assets and want a say in their bequest. Among the younger generation, there are multiple marriages, inter-caste and inter-religious marriages and children from different spouses, which increase the importance of writing a Will, to avoid confusion over which succession law would apply. Increased awareness about the need for a Will is evident from the huge response to Moneylife Foundation’s three seminars on Wills.

Elders in traditional patriarchal Indian families, especially women, would bequeath their jewellery orally. It wasn’t unusual for the matriarch to say, “My (gold) bangle set will go to my elder daughter; my daughter-in-law will get the diamonds and my layered gold chain will go to my second daughter.”
Today, with nuclear families and children scattered across the globe, a wish list, even a written one, can never substitute a proper Will.

The authors of a well-known book called Trial & Heirs write about how Princess Diana made the mistake of leaving a ‘letter of wishes’ asking her executors to divide her personal property at their discretion but to give one-quarter to her godchildren. The executors apparently went to court against this ‘wish list’ and finally handed out peanuts to the godchildren. The lesson: “Don’t undermine your Will or trust by taking shortcuts,” say the authors. Instead, make sure you have a legally valid Will which is very specific about how cash and assets will be distributed.

Vimal Punmiya, an eminent tax, accounts and property law expert, says, “Making a Will is especially important if all your children are not all equal—financially or in terms of physical and emotional well-being. A person with a dependent widowed daughter, or a physically-challenged child, may want to make special provisions for them through a Will, over children who are better-off. This can only be done through a Will, because inheritance laws would treat all children equally.”

The inheritance laws applicable to you differ according to your religious affiliations. The Hindu Succession Act, 1956, applies to Hindus, Buddhists, Jains and Sikhs. The Indian Succession Act, 1925, is applicable to Christians while Zoroastrians and Muslims have different laws of inheritance based on their religious texts. Shias and Sunnis have different laws and Muslims are the only ones who can make an oral Will. If you want these laws not to apply to your case, you have to make a Will.

For some people, the big worry about making a Will too soon is, “What if I change my mind?” Well, you can change your Will as many times as you want to. The last one will be the one that is held valid on your death. But if you are in the habit of changing the Will frequently or to use your Will as an instrument to ensure your family’s devotion, then be careful to ensure that it’s complete each time.

How To Go about It?
Let’s start with some basics. At the core, it is a simple statement of your wishes. It must have your name, address, age and a declaration that you are in a sound medical state; it must be signed and attested by two witnesses in the presence of each other and the testator (the person making the Will).

Jayesh Desai, an associate at the law firm Singhi & Company, says, “The law does not prescribe the form or content of a Will. It can be handwritten or typed on plain paper. And you do not even need a lawyer to make a valid Will.”

Further, a Will does not require payment of stamp duty and registration. However, when it comes to actual transfer of your assets, large institutions and share-transfer agents prefer to depend on the Will that is registered.
Having said that, it is important that a ‘homemade’ Will is legible and comprehensive. It must have a complete list of your assets and liabilities and details of their distribution in simple, straightforward and easy-to-understand language. This is often easier said than done. Trial & Heirs narrates the story of a US Supreme Court judge who believed in such brevity that he wrote a Will that was just 176 words. His family was forced to spend thousands of dollars to have his Will clarified by a probate court. As the authors Danielle and Andrew Mayoras point out, even a judge does not necessarily have domain knowledge; so it makes sense to get a Will reviewed by a lawyer who specialises in the subject.

When it comes to a homemade Will, “The tricky part,” says Mr Punmiya, “is when you want to favour particular persons (say a neighbour or your favourite library) or disinherit a daughter who married against your wishes. In such situations, it is important that the Will provides full explanation for your wishes and action, just in case there is a battle over your assets.”  

Key People in the Process
While planning to make a Will, you need to start thinking about the key people, other than your heirs, who are crucial to the process. First, you need to think carefully about whom to appoint as executor to your Will. It must be a person whom you trust and who is rational and will have your best interest at heart. At the same time, if the executor is one of the beneficiaries, remember his position is compromised.

Again, Trial & Heirs provides a dramatic story to show how important it is to choose the right executor. Claudia Cohen, the divorced wife of millionaire Ronald Perelman, chairman of cosmetic giant Revlon, chose to appoint her ex-husband as the executor of her Will. When she died, Perelman dragged her old and paralysed father Robert Cohen to court, demanding a larger share of his estate. In doing it, he spent a few million dollars of his ex-wife’s money to sue her father!

Claudia Cohen had specifically requested that Perelman should not strain the relationship between the daughter and her father, but he ignored that too. All this suffering because she made the dreadful mistake of appointing Perelman as the executor of her Will.  

Apart from avoiding executors who may turn nasty or greedy, a commonsense approach is to choose an executor who is capable and familiar with legal formalities and is younger than the testator and has a higher probability of outliving him. The same is true of witnesses. While any two persons can be witnesses, ensure they are people who will turn up and vouch for your mental soundness if there is a dispute.

As Dr Israni says, it makes practical sense to select your witnesses carefully; for instance, a doctor’s opinion on your mental soundness is less likely to be contradicted and a lawyer or a chartered accountant would ensure correct legal procedure. It is also a smart idea not to have your heirs or beneficiaries as witnesses, because they get discredited if there is a dispute. While it is a good idea for your witnesses or executors to be confidants and know the content of your Will, it is not necessary for you to inform them. But again, learn from Vimal Punmiya’s client, who did not even tell his family that he had executed a Will and given it to Mr Punmiya for safekeeping. It was discovered only by chance, several months after the client’s death. So keep someone informed.

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