In India, anyone above the age of 18 years can make a legally valid will. However, for those who are well-established in their careers and have started building their asset base, a will is indispensable for proper financial planning. Furthermore, a will is essential for those who have dependent parents, a spouse, and children to safeguard.
Without a will, it is common for assets to lie unclaimed in financial institutions for years, as family and loved ones are not even aware they exist. The pandemic has shown us that life can be unpredictable, and many families have suffered immensely due to a lack of estate planning.
CNBC-TV18.com spoke to Niranjan Vemulkar, CEO and Co-founder at Yellow, a comprehensive digital will and estate planning solution, to get answers to all the queries regarding will.
How does a will safeguard the interests of the person making the will and their heirs?
A will is the only document that provides the testator (the person making the will) with the freedom of choice and flexibility to decide the manner in which their hard-earned assets are to be distributed and ensure the continuity of their legacy.
"In India, without a will, a person is left at the mercy of succession laws that cater to the masses and do not take into consideration one’s unique situation. It is also important to note that some laws, e.g., the Hindu Succession Act, draw a distinction between men and women in terms of the line of succession that is prescribed. This may not be in line with a person’s own values or thinking on the matter," said Vemulkar.
For the heirs themselves, the administrative paperwork and processes involved in retrieving and transferring assets without a will are expensive, time-consuming, and cumbersome.
"At times, the legal heirs may not even be aware of the full extent of assets owned by their loved ones. The result is that these assets remain in limbo for years, or worse, are susceptible to being repossessed by the government. In this regard, a will is not just a statement of wishes; it is also an inventory of assets, ensuring that transmission is achieved with minimum conflict and maximum benefit to the intended beneficiary," Vemulkar said.
Finally, for parents of young children, a will is of paramount importance when it comes to appointing a responsible guardian, making it a holistic document to safeguard one’s family from future eventualities.
Who is a legal heir as per Indian law?
According to Vemulkar, legal heirs are defined as family members who are legally entitled to inherit a person's assets after their death. When there is no will in place, legal heirs are categorised into different classes, and the share of inheritance received can differ as per the personal laws based on one’s religion.
"Broadly speaking, the Indian Succession Act of 1925 recognises the spouse, children (including adopted), parents and in-laws, as well as siblings as legal heirs. These relations are further classified under each personal law, which determines their right to inheritance and share," he said.
A will, however, gives one the ability to circumvent succession laws altogether and choose to whom they wish to bequeath their assets and in what proportion.
How much time does it take for someone to create a will?
The conventional process of will-making can take months to complete.
What is the process of executing a will?
A legally valid will in India requires only 4 essential criteria, as per Vemulkar:
● Age: minimum 18 years of age
● Sound mind: aware of the contents of the will and written with one’s own free will without any force
● Attestation: Verify the signatures of the testator along with at least two witnesses
● Executor: Although not a legal mandate, it is crucial to appoint an executor to ensure that the Will is executed as per the wishes of the testator. Among the many duties, an executor may apply for probate if required, pay off the debts or taxes, and manage the distribution of the assets as per the will.
Apart from the above, there is no mandatory requirement for the will to be stamped, notarised or registered. However, for added robustness, one could explore the registration of a will by a government witness, plus facilitate a smooth asset transfer process with property registrars, where the asset pool in the Will include real estate.
If an heir doesn’t want the claim to the property? What happens then?
While it is good practice to keep loved ones informed of having written a will, Vemulkar said that it is important to discuss or carefully consider the distribution of assets to the beneficiaries.
"In the event that the beneficiary does not claim the asset bequeathed in a will, it is distributed to the legal heirs of the deceased as per the applicable personal laws. One must, therefore, consider appointing an ‘alternate beneficiary’ for the assets so that in case it is unclaimed by the intended beneficiary, they can be transferred to the alternate beneficiary without making the process of asset distribution cumbersome by triggering personal laws," he said.
