Know everything from it’s importance to rule of inheritance.
Creating wealth is just one aspect of financial planning. Under the Indian Succession Act 1925, a Will is a legal declaration of the intention of the testator, with respect to his/her property which he/she desires to be carried into effect after his death.It is complete only after the death of the maker of the Will, who is known as the Testator. It is important to have a wealth succession plan in place. What is the best way to do it? The smoothest way is leaving behind a will to ensure that the final allocation of your wealth happens according to your wishes.
What is a will?
A Will is a legal declaration containing disposition of the properties of the testator, which comes into effect after his/her death. The essential features of a Will are-
- It must be a legal declaration.
- The declaration must be with respect to his/her property.
- The desire of the Testator that the said declaration should be effectuated only after his/her death
There is no standard format of a valid Will. However, certain formalities must be complied with in order to make a valid Will.
a. Testator must be competent to make the Will-meaning thereby that s/he must be of sound mind;
- The Will must be signed by the Testator- this process is known as Execution of the Will
- It must be attested by at leaser two witness (Attestations)
b. A Will becomes enforceable only after the death of the testator. It gives absolutely no rights to the legatee (the person who inherits) until the death of the testator. It has no effect during the lifetime of the testator)
Why a Will? Importance of a Will?
The concept of Will is not alien to us, but how many of us actually make the effort to write one? Most of us don’t bother based on the assumption that it is required only for those who are rolling in wealth. Succession planning can be done through wills, corporate entities, and trusts.
A Will does not only distribute wealth; it can also offer responsibilities. Who will take care of your children in absence of you and your spouse? Should they be raised by your brother who is in a financial mess or you want your elder sister to take care ofthem? One can writea will appointing a trusted person as the guardian of their children when neither of the parents survives.
What Can Be Willed?
The succession of property is governed by complex laws of inheritance and religion as well as customs. Any individual can write a will for any property earned and owned by him.
A will also allows you to direct assets to a charity (or charities) of your choice. Similarly, if you wish to leave assets to an institution or an organization, a will can ensure that your wishes are carried out.
Transfer of property through a will
A transfer of any property can also be made by way of execution of a will but the vesting of the property will take effect, after the death of the person executing the will. As per the prevalent laws, a will is neither required to be stamped nor is it required to be registered. So, a will is the cheapest mode of transferring your property, to the persons whom you wish to.
After one’s death, the assets can be inherited by people in two ways.
- The assets owned by the person at the time of his death will pass on to his relatives as per the provisions of succession applicable to the deceased, in case no will is executed.
- In case a will is executed by the deceased, the assets will be inherited by the people named in the will. In case all the assets are not covered under the will, the assets that are not covered will be inherited by the legal heirs of the deceased as per the succession law.
Under the law of succession applicable to Hindus, there are no restrictions on a person in bequeathing his assets to anyone to the exclusion of his legal heirs. Under the Muslim laws, a Muslim cannot bequeath more than one-third of his assets under a will.
What to look for during SALE AND PURCHASE OF PROPERTY
The most valid form of purchase of property is through a registered sale deed which transfers title as well as possessory rights to the purchaser. However, these days there are several tactics being employed by people to sell their properties and one needs to be careful to ensure that they are entering into a valid sale.
You must ensure that the seller gives you a Registered Sale Deed as it is the best document to ensure a complete sale of the property. A sale being effected through Power of Attorney is not a valid sale as it does not convey any title. A sale through Agreement to Sell is valid (though not complete) only if the document is registered. An agreement for sale is an agreement to sell a property in the future. This agreement specifies the terms and conditions, under which the property in question will be transferred. According to the Transfer of Property Act, an agreement for sale, whether with possession or without possession, is not a conveyance. Section 54 of the Transfer of Property Act enacts that the sale of immovable property can be made, only by a registered instrument and an agreement for sale does not create any interest or charge on its subject matter. A sale being made only through an Agreement to Sell which is registered protects the possessory rights of the purchaser and the purchaser can not be dispossessed from the property. However, an unregistered document will extend no such rights to the purchaser, If property is being transferred through a combination of documents – most commonly Power of Attorney, Will and Agreement to Sell- then it is not a valid transfer till the time the Agreement to Sell is registered.
To put it simply, without a will you could leave behind a great deal of confusion and stress at a time when your loved ones are in emotional distress, not to mention high legal costs, while rights and shares are being determined by the courts. Thus, it becomes very important for someone to make a Will.