Thursday, July 26, 2012

Who should get your money...Needy or Greedy?


How many times have you heard and ignored that one of your friends or neighbors is fighting a court case for inheritance? Your immediate reaction could be a ‘sigh of relief’ imaging your loving family. It is hard to imagine parents, children, spouses, siblings fighting over money.
 But if your friend’s uncles can fight over money, why can’t your children’s uncles?
Times have changed! We are no longer living in a world where people had limited needs and were contented with the limited means. Needs have increased and so are the expectations, not only from self but also from others around. More importantly people are more vocal about their expectations.  These needs, fears, anxieties, influence, expectations, lifestyles and insecurities can bring unexpected changes in a person’s behavior.  Sweet relationships can turn sour. And when you are not around (residing in heaven of course!) to interfere and correct the expectations, things can go really wrong. Emotionally stressed dependents can get sidelined by more vocal and dominating heirs and relatives. Hence if you want to dispose your assets as you wish, you should express it not only verbally but also in writing.
Writing a WILL can help you do so. After all, the question is who should get your hard earned money…Needy or Greedy?
Here are some reasons as to why you need a Will and how it can help you.
1. A Personalized Document:
A Will is an absolutely personal document. At no point of time you can be asked to produce your Will. It comes in to the effect only after the death of the person writing the Will, the ‘testator’. You have full control over the Will as it is revocable ie, you can alter the terms, make changes or cancel it as and when you like.
It can help you express and clarify your opinions, feelings and relationships to everyone related to you. You can attach reasons for doing a certain deed and leave the message. Your words may be forgotten and ignored but your writing will not be!
2. A Legal Document:
A duly written, witnessed and registered Will is a legal document. It cannot be contested if ascertained to be the last Will of a person. If the Will is witnessed by a doctor, it cannot be challenged on the grounds of ‘written by an unsound mind’.
Judiciary will ensure that your wishes are respected and executed in your absence.
3. Ensures clear disposition of assets:
A Will can help in avoiding confusions and disputes. You will be able to ascertain the manner and extent of the disposition of your assets. There can be special needs or requirements of the members of a family, Will ensures that they are being taken care of. It provides more room than the laws of inheritance.
Special circumstances in the family may need special attention. Some near and dear ones may need more attention than others, like, physically or mentally challenged member, invalid parents, widowed daughter or sister, a friend in need, live in partner or even a faithful servant. Some heir may be capable enough to take care of themselves, hence may not need full share of bequeath. Also you yourself may not be willing to share your wealth in case of estranged relationships. Everyone may be equal in the eyes of Law but you can maintain the uniqueness of your relationships and create the difference!
4. Can help in appointing a guardian:
A Will allows you to appoint a testamentary Guardian for the minor children. You can also define the wishes as to how would you like your children to be provided for. The guardian will take the full responsibility of the children and will execute it as per your wishes. Of course, it is very important that the guardian so appointed should be willing and capable to take the responsibility.
 Nowadays when most of the families consist of parents and minor children only, the absence or incapacitation of parents can leave the children ‘alone'. They are left vulnerable and helpless. Someone may be more interested in taking control of your money than the responsibility of your children. Sometimes there may be fight for the custody. In extreme cases No one may be interested in taking care of the kids. Hence make No assumptions and guard your children’s future in black and white.
5. Will supersedes nominations and successions:
Will overrides the provisions of nomination and laws of inheritance.
The popular belief that appointing a nominee in your financial transactions will ensure the smooth transfer of your assets is a ‘Myth’. Let’s see how it happens in India.
The debate of who will get the money does not end with mere nomination because legally nominee is just the ‘trustee’ of your assets. Legally the money will be divided as per the succession laws of the religion followed by the deceased. Also there are different rulings regarding different types of assets like bank accounts, insurance policies, shares, PPF etc. Let’s see some cases;
When the Nominations are done: In case of bank account, insurance policies, bank locker and real estate the nominee is considered as the trustee and the legal heirs can make the claims. But in case of stocks, shares and demat accounts the nominee is not just a trustee. He/ she is entitled to the entire sum being nominated in his/her favour. As per a recent ruling by Bombay High Court, the legal heirs cannot claim any amount generated from the sale of such shares.
In case of PPF accounts, it is important to have nomination. In the absence of the nominee the heirs get only 1 lac from the PPF account on the showing the succession certificate and death certificate. There is a very tedious process after that to claim the rest of the money from the PPF account.
When the laws of inheritance are applied: If you are a Hindu, your assets will be disposed as per Hindu Succession act 1956. Which says,  that in case of a Hindu male the assets should be equally divided between his wife, mother and children, even if he may have nominated his wife as the ‘sole’ nominee. Afterwards the mother’s share can be claimed by her heirs like her husband and other children. So even if the need and the wishes were to provide for the financially dependent wife, the case may not be so.
For Muslims the division of assets will be dictated by Muslim personal Law. Also Shias and Sunnis have different laws of inheritance. For Christians the Indian Succession Act, 1925 will be applicable. Parsis have a different law of inheritance.
As you can see that there is no One ruling on this matter. And a Will is one such document which can steer you clear of the legal maze!
 One document from you can safeguard the interests of your loved ones. You can help them take pleasure in your legacy. This one piece of paper can help you curb and correct the expectations even in your absence.  Let the greedy ones get the lesson!