Writing 'will' should be part of sound financial planning

Last week, there was huge announcement of Reliance's chief's succession plan. The market has reacted from its perspective but what's significant is the clarity of the future of that conglomerate. We'd witnessed how the company and family went into turmoil upon the demise of the founder at the turn of this century. The disorder continued for a while till the settlement was brokered by the surviving mother. We'd also seen the long legal battle for the control of MP Birla group.

Elimination of risks, of any type, is one of the rudimentary principles of financial planning and lack of will writing is a certain risk. Moreover, writing a will make the entire process comprehensive from not just defining the goals but also establishing an estate in place. By doing this, one could avoid the repercussions the family must deal with and the legal clarity that it provides post demise of the member. Hence, I see this as an extension and completion to the financial plan than a separate exercise.

A will is a legal document which puts forth one's wishes regarding how the distribution of one's wealth, property and the caretaking of the remaining family members. If there's a particular way one envisages to dispose of or transfer the existing assets in their absence, a will becomes mandatory. I put the need for a will for a clear assimilation or assertion of the various assets, wealth, etc. along with how it should be utilized to one's wishes posthumously. If we defang the emotions out, it presents a rational document that describes the way forward for the other family members in utilizing the accumulated wealth as per the deceased's priorities. All they need is a piece of paper to write and a witness to attest it. Making a will allows the person to name an executor, the person(s) who carry out the proceedings of the will and a legal guardian in case of the taking care of children. There're existing provisions governing minors in the Indian Succession Act, 1925.

Coming to the details of who could make a will, any sound (mentally) person of age 21 and above is eligible. Any will should start with the declaration of what it is i.e., "will or testament' and mention the disclaimer that it's been done without any undue pressure or distress. One needs to provide the entire list of assets, items, etc. their details (like real estate, investments (financial), bank deposits, etc. and the value at the time of the writing. One could also indicate where the original documents or location (if physical gold, bank lockers, etc.) of storage. The will could go beyond just the assets, wealth, etc., and could cover other wishes like that of particulars pertaining to the funeral, even taking care of pets, etc. One need to list the entire beneficiaries of the will, those who inherit the assets, wealth, etc., along with legal guardians in case of the beneficiaries are of minor age. Clearly identify each of the beneficiaries especially when naming beyond the family members to avoid any contest at later time. Another important aspect of the will is choosing the executor, the person(s) who will be responsible to ensure the will is executed as per the will. One could even mention the consideration, if any, for the executor.

Once these contents are mentioned, it must be attested with a self-signature and require two witness signatures to complete. Another debate that rages among the people is whether the 'will' be registered or not. It's not mandatory to be registered but any written will is valid. It could be notarized and if registered then the testator (the person making a will) and the witnesses must go to the registration office.

(The author is a co-founder of 'Wealocity,' a wealth management firm and could be reached at [email protected])