In a rapidly evolving world, it is easy to overlook crucial matters like estate planning and writing a Will. Yet, these topics aren't merely about finances; they profoundly impact the well-being of the kin after the death of a person. People are hesitant to talk about death and many die intestate (without leaving instructions about who should receive their property). Vishnu Chundi, founder of Hyderabad-based AasaanWill, a startup that is encouraging people to write a Will through, tells about the need for a Will, its related aspects in an interview with B Krishna Mohan.
Here are the excerpts
Why is a Will needed?
An estimated Rs 35,000 crore (roughly $4.2billion) lies unclaimed with the financial institutions, bank accounts, life insurance policies, equities, and more. But why is the amount unclaimed? That is because some people tend to forget about these over time, some also opt for secrecy regarding their financial affairs. Unfortunately, many pass away without leaving behind a Will.
What are the pain points that people experience?
The absence of a Will can set the stage for bitter family disputes over sharing of assets and subsequent court cases. However, it is important to understand the inheritance laws in India. For instance, a Hindu male dies and leaves behind Rs 300 (or whatever wealth). After his death, out of the Rs 300, Rs 100 goes to the mother of the deceased man, Rs 100 goes to the wife and Rs 100 goes to all his children. A point to note is that the father of the deceased person has gotten Rs 0. This brings up a question: who is going to take care of the elderly father?
This is just the level 1 problem. The law assumes that the mother and father of the deceased are on the same page. So, if the mother gets Rs 100, she will use that to care for the father! But that may not be true for all families in India.
While it is no longer universal, men mostly control the household finances. In such cases, you're making her dependent on the man who technically cannot access the money. It is just adding more bureaucracy here.
Is it any different for a woman?
The situation is equally unfair for a Hindu woman. Upon her demise, her assets are divided between her husband and children. For the same scenario, a Hindu woman dies and out of the Rs 300 she left, Rs 150 goes to the husband, Rs 150 goes to all the children. The woman's parents, who supported her education, aided her in getting a job, supported her financially over time, get nothing. However, putting a Will in place would have ensured that her wealth was distributed as she wanted. Inheritance principles come into play only when a Will is absent.
Complexities?
We had seen a case where a woman with a flourishing career died. She left a corpus of Rs 3 crore. Of this, 50% is going to the husband and 50% to the minor children. Obviously, minors cannot operate, so naturally, the husband is going to operate it for the kids. The woman’s parents, who have taken loans from informal sources for her MBA, are now left in the lurch. They are asking the son-in-law to chip in for clearing the loans. There are several such cases. A Will in place would have avoided this phase for her parents. If there is no Will, the legal heirs will be defined in several permutations and combinations- if the person is a man, woman, single, married, widow, has kids, has no kids, has parents, has no parents, has siblings and so on.
Does religion have a bearing on inheritance rules?
Hindus, Buddhists, Jains, and Sikhs have similar inheritance principles. For Muslims, there will be specific mandates for charity donations in addition to inheritance distribution. Understanding these nuances is crucial for proper estate planning. Writing a Will isn't just a financial decision; it's a way to secure your loved ones' future and prevent potential conflicts over your assets.
Is putting someone a nominee enough?
Nominees are only custodians. They are not owners of assets and cannot consume the assets. For instance, if a bank account has a nominee, he/she can only operate it, but the ownership and distribution of assets follow legal inheritance laws. Misunderstanding the role of nominees can lead to disputes and financial uncertainty for beneficiaries. Again, Will comes into play to avoid the disputes.
Role of AasaanWill
AasaanWill's mission is to simplify Will-writing and estate planning. AasaanWill charges Rs 7500 for understanding your situation, drafting a Will, and getting it registered anywhere in India. We emphasise on updating the Wills at various life stages- marriage, having children, or when acquiring new assets. Beneficiaries and an executor (the person who is going to read the Will and make sure that wishes of the Will creator are taken care of) are the key actors. Two witnesses are needed in person. If you write a Will in India, AasaanWill we get it registered. So, it is not just a white piece of paper with your wishes and two signatures. A copy of the Will will be at the registrar's office.
