A will is a legal document setting forth one’s wishes regarding the distribution of all the properties and taking care of minor children, if any. Apparently, when an individual dies without making a will, those wishes are not carried out. Over and above that, the legal heirs end up fighting for their rights. A lot of time, energy and money is spent along with emotional turbulence to settle the affairs in a lawful manner after the death of their near and dear one. Failure to make a will leaves it open to disputes and the estate goes in the hands of judges or other state officials and their decision is finally given effect to instead of one’s own wishes. To make a will does not need any expertise. The person making it can distribute his/her assets among his legal heirs in case of death.
The importance of making a will should be understood irrespective of any gender bias. Even a woman who is survived by her spouse, children or other family members should make a will. In this article we try to focus on why estate planning is needed for women and how to go about it.
It is normal for a human being to feel uncomfortable while planning for things that will take place after death. But that seldom reduces the importance of securing the future of the loved ones in the event of death. Women too have an equal share in the family wealth and other inheritance matters. They also earn, hold higher positions and run their own businesses successfully. Women are in a different situation today than they were a few decades ago when it was believed that they could not and should not be in charge of financial decisions. Women are not only empowered but also are clearly building personal wealth and they also need to secure their assets by adopting legacy planning. This way the assets or wealth is passed on to the rightful heirs.
To have a nominee does not mean that there is no need to make a will. Because a will specifically mentions how the assets stand distributed among the nominees, who gets how much and when. Succession planning is impossible without a will and thus makes it a powerful tool. The person making or writing a will is known as the ‘Testator’. Women should not wait until they have a health crisis to consider estate planning as their priority. As a woman you do not need a big house or billions of money in your bank account to do your estate planning. It is as important as financial planning. Women should be encouraged to be testators and document their will.
Also, waiting to get old for the sake of making a will is not a good idea. Women too should take into account all these common understandings pertaining to will. And write one while they are young or physically and mentally fit. This saves a lot of ambiguity and reduces the chances of it being challenged in a court of law. Note that in our country when inheritance is not decided by way of will, the religion of the deceased woman shall decide about succession. Thus, as per the Indian Succession Act, if a woman dies intestate, the Hindu Succession Act and the Muslim Personal Law become applicable depending upon the facts of the individual case. Once you go through how it looks like when laws of your religion decide about your succession, you may better understand the significance of having your own will.
Let’s understand how the laws of inheritance work.
- Succession for a Hindu (Sikh, Buddhist,Jain) woman has wider consequences in absence of a will. A Hindu woman who does not leave behind a will, the property will be inherited by the spouse and children. In absence of both, the property gets divided into three categories,
- Property inherited from parents:Inherited by the heirs of the father
- Property inherited from husband and father in-law: Inherited by the heirs of the husband and
- Other property which includes self earned property, the husband is predeceased and there are no kids then it will go to the husband’s heirs and not to her parents, siblings or other relatives.
Other specific situations have been discussed here,
A Widow: A widow, even if in a case where she has accumulated wealth all by herself, shall pass on her assets to the heirs of the husband as per law if there is no will. Despite having no contact with husband’s family after his death will not change the scenario. The assets will belong to the parents only if the deceased husband does not have any legal heir.
A married woman without a child, leaves behind no will:On death of a married woman who does not leave any will, nor has any children, the property will be inherited by the husband. If he too dies without making any will, his property will be passed on to his mother. But if he is not survived by his mother, then the property will pass on the father followed by siblings. In the same example if the woman makes a will, but her husband does not, the same succession pattern will follow upon his death.
A married but separated woman: Those couples who seek a divorce or are in the process of separation, it should be noted that still the relationship of husband and wife exists in the eyes of law and if anything happens to any of them, the estate will pass to the spouse and the children.
A divorced woman: The children will inherit the property and in absence of children, parents will inherit the same.
An Unmarried woman: If an unmarried woman without any children dies and has not made any will, her assets will be inherited by her father’s legal heirs.
- Muslims-Under Muslim Law, the distinction between ancestral and self-acquired property does not exist. Legal heirs are divided into sharers and residuary. Sharers get priority over residuary. Any property inherited by a woman from her husband, father, mother or son is absolutely her share and she can dispose of it. By making a will, she cannot give away more than one third share of her property. In cases where the husband is the only legal heir, she can give him two thirds of the property by will.
- Chirstians-The widower gets one third property and the balance goes equally among lineal descendants. In absence of lineal descendants, only the kindred, the widower gets half the property and the balance is distributed among kindred. If there is no kindred, the widower gets the entire property.
After reading the above situations, it becomes clear that making a will is inevitable if you do not want to distribute the property predetermined by succession laws. Every woman has her own choice, and the smartest way out is to act upon it now by specifically putting it into a written will. Otherwise whatever the law permits shall become applicable whether you want it to happen after your death or not.
The apparent benefits of making a will by a woman are further highlighted as under:
- Safeguarding the interests of children: A mother always puts her child/children first. It is important to mention specifically who will take care of the children in case of her demise. When the children are minors and the surviving parent gets custody of the children, it becomes important to think about the well being of the kids. Where the mother is a single parent or is a widowed mother, the guardianship becomes more important. It is necessary to name the guardian who will take care of the kids in mother’s absence. Since nobody will be there to take care of the children, the guardian has to be someone who is capable and close enough to take care of children’s daily care and long term well being. Failure to do so will put the children’s future in danger as the caretaker will be decided by the court, who may or may not be a person otherwise wanted in the picture. By making a will a woman might want to give a portion of her assets to someone who took good care of her but is not a related person.
- Rightful heirs entitled to the assets: The succession rules in India go in favour of males. As already discussed earlier in this article, under various situations the husband and his heirs stand to gain if the female member fails to draft a lawful will. If you want to distribute your wealth as per your wish to the rightful heirs of your choice, do not rethink about making a will. Do it now. There are legal professionals who can help you if you find this task difficult. But once there is no will, there shall be no choice, especially when you are a widow, a divorced woman, or a woman without a child. Husband and his family will be legal heirs in most of the cases if there is no will.
- Avoid family disputes by making a will: There is always a potential for disputes when there is more than one child to inherit the property. In India the families usually believe in sharing common interests and thus it is very important to specify the rights in case of inheritance to avoid misunderstandings and probable disputes among them. Each of the children needs to know what they get from their parents. Financial future of the children is a serious matter and only a will can save their interest. Bitter legal tussles and long drawn battles can be avoided only when a written will decides on who gets what. It is the duty of the parents to maintain the balance between the two generations and also among their children by making a will.
- If you own a business: The number of working women is growing in the country. Self employment is on a rise among women. If you are part of this new wave of entrepreneurs, you should not only safeguard your assets but also plan for the succession of your business considering the probability of a health crisis or death.
- Women tend to outlive men and hence they need resources that will last longer to cover their living expenses, long-term care and other lifestyle needs. When you have control of your money and assets, it gives you liberty to live your later life the way you want to live without being dependent on others.
The above points emphasise the fact that a well-documented will lower the probability of litigation. However, making a will poses a lot of questions. A woman might be having doubts like does she have a stake in the ancestral property? When she has more than one child, could she give a larger portion to one of her children? When a woman is unmarried and has no kids, could she bequeath her assets to a person of her choice who is not related? There is no uniform law to govern the will and in absence of it religious succession rules will apply. Making a will might sound as a complicated process, but that doesn’t mean that it should not be done.
Making a will includes an updated list of your assets-your investments in stocks, bonds, PPF, real estate, life insurance plans, family heirlooms, gold and other art-collectibles etc. it also spells out how you should be taken care of and what medical treatment you want or do not want in case you are likely to have some serious health issues and cannot enunciate yourself. You can also enlist an executioner or estate planning attorney to manage your affairs, name the legal guardian for children and their responsibilities if required, stipulating the amount if any to be set aside for charity and welfare causes.
It is understandable that women often are concerned about preserving their family relationships and ensuring that children become their first beneficiaries after their death. Telling your wishes and sharing with your family is a welcome approach, but documenting it is critical. The work is simple yet it has a list of things that would surely make you ponder.
The following are the points that should be kept in mind while making a will-
- A will should state all the minute details of the manner in which the assets would be distrubed and when they will be distributed.
- Also, it is advised that the manner of distribution should be stated to minimise the probability of litigation. When one of the kids is given a bigger portion, and/or someone is completely left out of the will, the reason about the same should be clearly mentioned to explain the intention behind doing so.
- Ensure that there are at least two witnesses when you make the will. It should be kept in mind that those two witnesses should be younger than the one making the will.
- The witnesses should be individuals who are not the beneficiaries of the will in any manner.
- When any unrelated person is included in the will, giving a clear cut reason for the same will save many disputes from happening. Clarity is very important in succession planning.
- Include only those assets which are in your name directly. The assets which are bought by you but are in someone else’s name cannot be included for obvious reasons as they do not belong to you.
- Make the will irrespective of your age once you think it is necessary. Waiting to get old to make a will does not serve any purpose. Making it while you are physically and mentally fit will reduce the chances of it being disputed or challenged. A common belief that writing a will is something to be done in old age is totally an absurd idea.
- Reviewing the will is necessary if any life changing event takes place which has a direct effect on your succession plans. Birth of a child, death of a beneficiary, acquisition or sale of your business etc need reworking the strategy. Sometimes changes in tax laws also need attention. You may remove or add your spouse to your estate depending upon your marital status. Accordingly you may further make changes to retirement accounts, insurance policies etc.
- Critical health issues of your spouse or yourself may result in long term costs and that will have an impact on your future. You need to include such aspects in your will without fail.
- If possible, discuss the will with the beneficiaries as this will eliminate the surprise and will also reduce the probability of litigation. If they have any doubts, they can ask you. You have the chance to let them know why you made your will the way you made it.
- If beneficiaries know about the will, they should also know about the place where the will is safely kept so that it can be easily found in case of any sudden demise.
- For women with larger asset bases, a Private Family Trust can help to ensure a full proof protection for their wealth after their demise. Private Family Trusts are flexible when it comes to naming beneficiaries and controlling how wealth is disbursed among them. They are robust and do not need the process of a probate.
- As we all have witnessed the global pandemic and a woman can never have enough safeguards for her children in absence of a will. A will or a Private Family Trust are the all-encompassing ways to secure the financial future of a child and make sure that wealth is passed down to the deserving beneficiaries in a hassle-free manner.
Role of professionals in legacy planning: It is in your best interest to obtain as much education as possible about wealth planning, investments, insurance, taxation and related matters. Whether you are involved in making important financial decisions or not, have knowledge in all these matters in order to communicate with professional advisors charged with these duties. Professional advice sure matters as opposed to family and friends affecting your financial well being. Attorneys and accountants are there to offer you guidance in this matter including retirement and legacy planning. They help in identifying the areas where special assistance is needed like creating trusts, developing and implementing personalised wealth management plans, reviewing plans periodically and suggesting changes when required and minimising taxes and planning costs. There are many accounting, business, legal and other financial tools to help women in mapping and implementing a plan of action.
Conclusion: Women are in an influential position and also holders of great wealth. They maintain the family’s moral and philanthropic vision. Their will makes a difference. Just as documenting a will is necessary, it is also important to make it at the right time and with great care. Estate planning guidance can always be taken and it can also address other legal and taxation aspects. Your personal and financial decisions will be taken care of as per your vision and that will give you a peace of mind. A will is a very important tool to manage your assets. Earning, investing, saving and insurance are part of the financial management process, so is estate planning. Without it your hard work, your hard earned money, property and other belongings will get divided in a way which you may have never thought of. So better to envisionalise it now and write it down than let your death be followed by legal battles and other unwanted disputes. Your legal heirs and other beneficiaries will respect your choice and shall remember you for your vision. Better be remembered like that than somebody who left behind bitterness and disputes among your own family members. Remember both your will power and your will are game changers.
As per a famous saying “Estate planning is an important and everlasting gift you can give your family. And setting up a smooth inheritance isn’t as hard as you might think. “
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Smrutirekha Bhoi