Most people fear or ridicule the idea of estate planning, thinking it is immortal. Estate planning is about giving your loved ones or third parties access to your assets in the way you want. The basis of estate planning is determining how your assets and property will be managed and disposed of in the event of your death or incapacity.
The importance of estate planning
Surprising statistics show that unclaimed assets are worth ₹1.5 trillion are lying scattered across the country because families are unaware of them. This, ₹The ₹35,000 crore includes unclaimed investor deposits relating to 102.4 million accounts that were transferred to the Depositor Education and Awareness Fund.
By writing a will and updating it, you can protect your legacy and ensure the future of future generations in your family line.
Key aspects
There are several vital elements of estate planning that everyone should consider.
Will be: A will is a legal document that outlines how your property will be distributed after your death. This is your chance to determine who should receive what, appoint guardians for your children and choose a trusted person who will handle the division of your estate.
Trusts: Trusts are legal entities that hold assets on behalf of beneficiaries. They can be very useful in avoiding probate, minimizing estate taxes, and ensuring the continued care of your loved ones. There are different types of trusts to consider, such as revocable trusts, irrevocable trusts, and special needs trusts. Everyone has their own needs, goals and special purpose requirements.
Power of attorney: A power of attorney is a legal document that gives another person the right to make financial or medical decisions on your behalf if you are unable to do so. It is very vital to choose someone you trust, who will act as your representative and who will ensure that your affairs are handled the way you want them.
Healthcare Directive: You may also hear it referred to as a living will or advance directive. In this document you can express your treatment preferences in case you are unable to express your wishes. You can specify what type of care you do or do not want, including life-sustaining measures.
An executor must be appointed. Beneficiaries may also be contractors. If the legacy was made for a person according to a specific description, and at the time of the testator’s death there was no person who would respond to this description, the legacy is invalid.
An exception, however, is a direct lineal descendant, i.e. if the legatee dies before the testator’s death, the legacy will pass to the direct lineal descendant of such legatee and will not expire. If an unmarried person makes a will and then marries, the will will be deemed invalid or invalid.
When you don’t have a will
If someone makes a will relating to only part of the estate and leaves the remainder of the estate, or if for any reason the will is not deemed valid, such additional estate will be inherited according to the rules of intestacy. The laws regarding intestate succession are different for Hindus, Muslims and Christians.
If you do not make a will, inheritance law applies. These rules vary depending on gender and religion. For example, in the case of a married Indian woman, her parents are not first-degree heirs and it is highly likely that they will receive nothing.
Areas that require proficient transfer of assets include: financial assets, non-financial assets, real estate, creditors, debtors, memberships, real assets, retirement benefits and investments.
Application
Estate planning isn’t just for the luxurious. This is vital for anyone who has assets and wants to make sure they are distributed properly. Whether you own a enormous estate or a modest one, having a well-developed estate plan is crucial. This will ensure that your loved ones receive their fair share according to your wishes. Effective estate planning goes beyond securing a financial legacy; it can also promote peace and harmony among family members once you are gone.
In conclusion, estate planning is a crucial part of financial management that cannot be overlooked. By taking proactive steps to create a comprehensive estate plan, you can protect your legacy, minimize taxes, and ensure the future of your loved ones. Whether you are a seasoned investor or a novel homeowner, estate planning is an vital aspect of securing your financial future and providing peace of mind for you and your family.
Dilshad Billimoria is the founder of Dilzer Consultants, a Sebi registered investment advisor.
