- Date : 22/09/2022
- Read: 3 mins
7 tips for friction-free succession planning
Nowadays, succession planning has become necessary for people from all walks of life. Earlier it was considered that succession planning is reserved for high net worth individuals or businessmen only. But now, everyone has some form of assets that he/she wants to leave to their heir. Therefore, it is important that you plan your succession well so that there are no frictions after your death.
7 tips to plan your succession
The seven tips for planning your succession are:-
- Identify the movable and immovable assets- You might believe that you have no assets, but look around. You might have several assets that can be passed onto your heir. You might have financial assets like money in the bank, fixed deposits, mutual funds, debt mutual funds, pension funds, provident fund, post office savings, etc. Also, you might have jewellery, art, gold, insurance policies, etc. Also, your house is an asset that needs to be passed on to your heir.
- Nomination is not enough- Most financial assets ask you to file in a nominee. If you have filed in a nominee, you will think that he/she will get the asset. But it does not work this way. Your nominee is just the trustee, and he/she can only manage the funds on behalf of the heir.
- Execute a will- In all cases, you will need to manage a will. They will decide to whom your assets are passed after your death. Just having the nominee details updated is not enough, but the will needs to specifically allocate the assets to your nominee.
- Witnesses for the will- The will needs two witnesses, and if two witnesses are not present in the will, your will be considered invalid.
- Don’t transfer your assets before your death- A will gets activated after your death only. If you transfer the assets before your death, you will not be able to enjoy the asset while you are alive.
- Will can be modified before your death- A will is not the final giving away of your assets. A will is activated only after your death. Therefore, you can change your will before your death.
- Court fee on will probate- A will needs to be probated by a court. In states like Maharashtra, the fee is Rs 75,000. The entire process takes about one year, and the lawyer fees will be involved as well. In some states like Delhi, the court probate fee is as much as 4% of the asset value, which is very high. Make sure you understand the fees to avoid any unexpected expenses.
What should you do?
You should register a will by paying a court probate fee. Also, you can modify the will any number of times before your death. Make sure to get two witnesses to sign the will to avoid any problems. Also, the nominee details for your financial assets should match with the legal heir as per the will to fasten the process. Else, the process might take longer.
Succession Planning in India | Process
Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.