A will is a legally binding document that allows you to decide how your assets and property will be
distributed after your demise.
More than just dividing up your
money and possessions, drafting a will allows you to protect your family’s interests and
respect your final wishes.
It is shocking to believe that less than 10% of Indians have a registered will, often due to cultural taboos around discussing mortality.
Far from dividing families, the process of drafting, registration and execution of a will can open meaningful conversations and provide comfort through difficult transitions. In today’s newsletter, let’s discuss how to approach will-making with awareness and wisdom.
But before we start, let’s take a minute to clear up common misconceptions on Wills.
Common Misconceptions on Wills in India
Despite their significance, wills remain underutilized in India. Contrary to popular belief, wills are not exclusive to the affluent in the society.
“Only wealthy people need a will”
Everyone, regardless of wealth, should have a will to protect their loved ones and avoid legal complications.
“My family will naturally know what I want”
Unfortunately, this can lead to misunderstandings and disagreements, especially in complex family situations.
“Making a will is expensive and complicated”
Many online platforms, like JJ Tax offer simple will-making options with its registration as well as its execution at affordable costs. It is always advisable to seek professional legal assistance for a better start.
“Religious formalities are necessary for a will to be valid”
Indian law governs will-making, and specific religious practices are not required for a valid will. Consult a lawyer if you have concerns about specific religious customs and their relation to your will.
“Only sons inherit property”
This is a misconception based on the outdated traditions. Inheritance laws in India ensure equal rights for all legal heirs, including daughters and spouses.
“A will cannot be changed or modified”
Wills can be easily amended or modified as per your wishes at any point of time. You may simply create a new will with the updated information and the previous one automatically stands revoked.
Types of Wills in India
Testamentary Wills: The most common type, written and signed by the testator (person making the will) in the presence of two witnesses.
Holographic Wills: Handwritten by the testator and signed at the end, without witnesses. Less common due to stricter validity requirements.
Registered Wills: Testamentary wills can be registered in the office of Sub-Registrar of your district for added security and proof of authenticity.
Conditional Wills: Come into effect only if certain conditions are met (e.g., surviving an accident.) More complex and requires legal advice.
Mutual Wills: Made by two individuals (usually spouses) where both agree to bequeath everything to each other, with the remaining estate going to designated beneficiaries after both pass away.
Privileged Wills: Wills made under special circumstances, such as during war or at sea, with relaxed formalities but still requiring specific witnesses.
Tax Planning Through Wills
Strategic Estate Planning:
Wills serve as a cornerstone in strategic estate planning, allowing individuals to structure their assets tax-efficiently.
By carefully considering the tax implications, one can optimize the distribution of assets to minimize tax burdens.
Establishing Trusts:
Wills enable the creation of trusts, a powerful tool in tax planning.
Trusts can be tailored to specific needs, providing flexibility in distributing assets while minimizing tax liabilities for beneficiaries.
Making Charitable Donations:
Wills offer individuals the opportunity to include charitable donations as part of their estate planning.
Charitable donations not only contribute to social causes but can also serve as a strategic way to reduce the overall tax burden on the testator.
Utilizing Gift Deeds:
Another effective tax planning technique facilitated by wills is the utilization of gift deeds.
By strategically gifting assets during one’s lifetime through a will, individuals can reduce the taxable value of their estate, ensuring a more seamless transition of assets to heirs.
Minimizing Tax Burdens:
The overarching goal of tax planning through wills is to minimize the tax burdens of the estate.
Careful consideration of available techniques ensures that more of the estate’s value is preserved for the intended beneficiaries, facilitating a smoother transition of assets.
As Rabindranath Tagore said, “Death is not extinguishing the light. It is putting out the lamp because the dawn has come.” Your will leaves a lasting glow - a legacy of love and care to light your family’s way forward.
Our doors at JJ Tax stand wide open, ready to guide you through the process, clear misconceptions, and
draft, register as well as execute a tax-efficient will.
Let’s embark on this journey
together, ensuring that your legacy speaks not only of wealth but of love, wisdom, and enduring
care.
After all, a well-crafted will is not just a legal document;
it’s a legacy of love.