Will can include details of guardians for children

In India, a person's wish to transfer his/her wealth after life time reveals the inherent values of our culture. Below are some expectations people have when making a will or creating a succession plan.

Younger generation more open to making a will

While elderly people resist making a will, many professionals of 40 – 50 years are preparing one. These professionals have accumulated considerable wealth and their family structure is simple with spouse and minor children, which leads to quick implementation. They prefer bequeathing 100% of their estate to their spouse and if the spouse does not survive, then equally amongst the children.

One question that nine out of 10 married couples in this age group want to know is, "If I bequeath 100% wealth to my spouse and if my spouse remarries after my demise, how will my children be protected?" Also, they don't wish to bequeath any wealth to minor children at an early age. Creating a private family trust could be a solution for them. The spouse and the children can be named as beneficiaries of the trust with an added condition that if the spouse remarries, he/she would cease to become a beneficiary of the trust.

Dividing assets a bigger concern for elderly couples

While making a will, an elderly couple has a more detailed wish list. They divide their assets amongst the spouse and children, with a larger portion for the spouse to make provision for the old age. Though the Hindu Succession Act gives equal inheritance rights to the son and daughter, in many cases, the son is still an inheritor by choice because he is supporting his parents in old age.

For Indian women, their jewellery is an important asset class and while preparing a will they have an elaborate list on dividing it between their daughters, daughters-in-law and granddaughters.

Some elderly people, who are dissatisfied with their children, don't take the harsh decision to disinherit them completely. Intuitively being a parent, they want the best for their children, irrespective of unpleasant relationships. They even fear that if one child is disinherited, he/she would create unnecessary disharmony with other siblings. The parents need to understand that it's their wealth and they can dispose it as per their wish. In such cases also, a private family trust could help which offers privacy protection as against a will which becomes a public document.

Leaving money for charity

Initially while preparing a will, a client often allocates a considerable portion of wealth to charity. But this reduces gradually and before the will is finalised, the charitable allocation is negligible. With increasing life expectancy and early retirement, it becomes important to have sufficient wealth for one's old age, minor children and dependent relatives. They prefer doing charity during their lifetime as an ongoing activity.

Choosing guardians for children

In most cases for guardianship designation, the first preference is the mother's brother, while alternate preferences would be mother's sisters or father's sisters or brothers.

A few years ago, a discussion on funeral rites was uncommon, but now clients wish to specify their preference whether its organ donation, electric cremation or as per religion.

Apart from passing on one's financial legacy, it's far more important to pass on the legacy of our rich values and provide good education to our children so that they can create wealth for themselves.

LIFE AFTER DEATH

• Family trust offers privacy protection against will which becomes a public document
   
• Trust’s beneficiaries should be those to whom you want to transfer your wealth 

The writer is AVP-succession planning, Emkay Wealth Management