Photograph by Menty Jamir

When we speak of estate planning, what comes to mind is that it is a complex process or that one needs to have substantial wealth to really need a plan. Our thoughts are often hesitant: “I have nothing much to leave behind — let me become wealthy first.” “Even my dad hasn’t done it yet — there’s still a lot of time for me.” “My family gets along, so I don’t need estate planning.”

Estate planning can seem intimidating, but simply put, it is the process of deciding what should happen to your money and other assets when you die. It involves listing out all the assets you hold, which can even be done with the help of online portals, and specifying how you would like them to be distributed. For instance, you might want to split your assets equally between your spouse and child, or allocate certain assets to specific beneficiaries. If you already know how you’d like to distribute these assets, estate planning is a quick, 30-minute exercise.

In India, a handwritten will is also considered acceptable, provided you have witnesses — ideally, a doctor and a lawyer. For it to be foolproof, especially if you anticipate family disputes over assets, you should consult a lawyer to create a will and register it with the relevant authorities. If you make changes to the will, you will need to draft another will and register the new one. You will also need to plan for who would inherit your assets in a scenario where your beneficiary — for instance, your spouse — also passes away. Additionally, it’s important to note that having a nominee is not the same thing as making a will. A nominee is authorised to receive the estate and hold it on behalf of all the beneficiaries, but a person’s wealth need not necessarily be passed on to the nominee — unless the will explicitly mentions it.

Over the years, my experiences with clients have included examples where the consequences of not making a will are not so pleasant. Here are a few of them: 

Bequeathing Property to Unintended Beneficiaries

How is property distributed in the case of death without a will? The answer depends on the religion one follows. For example, according to the Hindu Succession Act, if a Hindu man dies intestate (without making a will), his property will be divided between his wife, children and mother in equal proportion. While this may seem fair, consider that the mother may herself be old — post her death, the property she inherited will be passed on to her surviving children. Not making a will could therefore mean that you will be leaving behind a part of your wealth or property to your siblings, which may not be your intent. Making a will helps avoid such situations — and is especially important because religious laws may not always consider the interests of women.

Leaving Dependents without Financial Support

In 2021, during the pandemic, I met a young woman who had lost her husband, in his early 30s, to COVID. She had a two-year-old child and had chosen to leave the workforce to take care of the child. When her husband passed away, his family froze his bank account and filed a case on her for the proceeds from insurance. Since she was not working and had no access to funds or the insurance amount, she was in very bad shape financially. Her husband would never have imagined that he would die young, and may have believed that he did not have enough assets to warrant making a will.


Creating Opportunities for Family Disputes

I recently met a man in his late forties whose father had passed away after having accumulated substantial real estate holdings in his lifetime. When he passed on, the family realised that there was no will in place. When someone had brought up the need for estate planning to the father while he was alive, he had ignored it, saying that his family was close-knit and hardly likely to fight over property. Sadly, that is exactly how things panned out. 

Estate planning is important irrespective of your age, amount of wealth and family ties. While people are generally reluctant to make a will and tend to associate negative connotations with it, it is a fairly simple process that saves your loved ones from unnecessary hardships and ensures that your wealth ends up in the right hands instead of being randomly distributed. As the saying goes, “hope for the best and prepare for the worst.” — so set aside some time to put your will in place.

Prathiba Girish is a Certified Financial Planner and the founder of Finwise Personal Finance Solutions.

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