Estate Planning

“An effective estate plan can minimize hassles and cost on and after your death, and provide benefits to your surviving family members over the long term.”

As an Estate Planner, I encounter a lot of clients who are still not aware about or conscious of Estate Planning.  An overwhelming majority of Indians still do not have a professionally written Will and the actual numbers will be closer to 85%+. They think they don’t need to do any sort of estate planning as they think “Estate Planning” is for wealthy people.

In India, millions of people die each year without any type of estate plan in place, and this forces their families into the court system, where they experience the high cost and time delay characteristic of Succession Certificate/ Probate proceedings.

There are lot of myths floating around and it is due to lack of knowledge and open discussion on this subject. In Indian society it is still a “Taboo” to talk about planning after death. Whether or not we plan to do so, each of us will face death eventually. However, by planning, we can make our passing easier and better in many ways for those we leave behind.

This article briefly touches about estate planning. We will be talking about various issues around estate planning in a series of articles. 

What is estate planning?

Around the world, Indians have one of the highest per capital saving rate. The reasons for saving include lack of social support for senior citizen from government (in short planning for our own retirement), habits (we have seen our parents saving extra pie for rainy days) and goal based saving (like for buying house, car, etc.) among others. They believe in passing down their hard earned saving in a judicious manner to next generation.

“Estate planning can be defined as the process of anticipating and arranging for the disposal of an estate. Estate planning typically attempts to eliminate uncertainties over the administration of a probate and maximize the value of the estate by reducing taxes and other expenses.”

Young individuals do not feel the need to plan when they should start planning. They think estate planning as the thing to be done at the time of retirement. Little do they realize the uncertainties of life and equate planning with dying. They don’t realize the problem faced by inheritors.

The main objective of estate planning is that to decide who will receive and control your assets. If you desire that every penny of your hard money should go to your next generation, you should be doing estate planning.

The people defer estate planning for later date or time. They used to avoid for various reasons such as-to avoid discussion on demise, avoid difference of opinion with better half on distribution of asset, lack of knowledge, etc.

Now is the best time to plan. The same needs to be updated once a year. We must put this on our priority list and not postpone it, thinking it to be irrelevant.

How to do estate planning

Transfer of assets from one generation to next generation can happen in following ways:

1. Gift during one’s lifetime

2. Through a Will

3. Application of Succession Law (if one dies without a Will)

4. Through a Trust

5. Family Settlement

For any Information regarding estate planning. Please contact shammi@myfindoc.com