May 17, 2024

Planning for what happens to your wealth after you’re gone can seem overwhelming, especially when there are so many myths floating around. It’s important to understand these myths and their realities to make informed decisions about estate planning. Here are some of the most prevalent myths: I’m too young: Many people believe that Wills are only for older individuals or those with significant assets. However, life is unpredictable, and anyone, regardless of age, can benefit from having a Will to ensure their wishes are carried out in the event of their passing. I have a nomination: Having designated a nominee, it’s common to assume that they automatically inherit the assets. However, it’s important to clarify that a nominee doesn’t become the legal heir; rather, they act as a custodian of the specific asset. The authority of a Will overrides the nomination, and if there’s no Will, the laws of intestate succession take precedence over the nomination process. Joint ownership with spouse: In cases of joint ownership of immovable assets with a spouse, each holder typically owns a 50% share. Upon the demise of a joint owner, their share is inherited by their legal heirs, not automatically by the surviving joint holder. This is due to the presumption of a tenancy-in-common unless specified otherwise in the purchase agreement, meaning that each joint holder has a fractional interest in the property. My family knows my wishes: While it’s essential to communicate your wishes to your family, relying solely on verbal agreements or assumptions can lead to misunderstandings or disputes. A well-documented succession plan provides legal clarity and ensures that your intentions are legally binding. I can do it later: Procrastination is a common reason for not preparing a Will. However, life events can occur unexpectedly, and having a Will in place provides peace of mind and avoids potential complications for your loved ones. It’s expensive: While legal fees may vary, the cost of preparing a succession plan is typically reasonable considering the potential benefits and peace of mind it provides. Moreover, the cost of not having a succession plan, such as legal battles or unintended asset distribution, can be far greater. My estate will automatically go to my spouse/children: In some cases, people assume that their estate will automatically pass to their spouse or children. However, without a Will, the distribution of assets may follow legal guidelines that may not align with your wishes or the needs of your family members. Furthermore, in a nuclear family where your spouse and child are your only legal heirs, your assets, whether immovable or movable, will typically be split equally between them. However, you may have preferences to distribute your assets differently, such as transferring them initially to your spouse before eventually passing them on to your child. I don’t have enough assets: Even if you don’t have a lot, whatever you do have is important for your family’s support and well-being. It’s essential to make it easy for your family to access and benefit from your assets without any complications so they can use them as intended. A Will can address not just financial assets but also other important matters such as guardianship designation for minors.

Many Indians now hold assets in both India and other countries. When creating a plan for how these assets will be passed on after your death, you have two main options: Separate Wills for Each Country (Situs Wills): This approach involves creating a separate Will for each country where you own assets. Each Will is drafted according to the specific laws of that country, making it easier to enforce and interpret in local courts. Single Will for All Assets (Multi-Jurisdictional Will): This option involves creating one Will that covers all your assets, regardless of location. Here’s why separate Wills (situs Wills) are often preferred: Easier Execution and Interpretation: Local laws are followed, ensuring smooth handling by courts. Faster Probate: Each Will can be directly submitted to probate without waiting for it to be probated in your home jurisdiction and then probating it in second jurisdiction which is a two-step time consuming process. Problems may also arise if the original Will is retained by a foreign court Reduced Fees: You only pay probate fees in each country where you have assets, not duplicated fees across jurisdictions. Increased Privacy: Only assets in the specific Will are disclosed during probate, not your entire global estate. If there are discrete assets in a jurisdiction which are intended to be left to different beneficiaries in that jurisdiction, it will be better to deal with those assets in a separate Will. Avoiding Ambiguity: Problems can occur when different interpretation for important terms is made. For example, will the term “children” under local law include or exclude step children, adopted children or illegitimate children? Does the term “spouse” refer to only legally married spouses or live-in-partner’s or same sex spouses? Flexibility for Different Asset Types: Inheritance rules for specific assets can vary by country. E.g. in India if an immovable property is held jointly, the joint holder can bequeath his/her share under a Will. In some countries in case of joint ownership the asset automatically passes on to the surviving joint holder. Your local attorney would have knowledge of such issues. Accommodating Local Laws: Forced heirship laws or community property rules in some countries restrict how assets can be distributed. In India, the Muslim personal laws and the state of Goa has certain restrictions. Such local laws shall be considered while preparing a Will. Important Considerations When Using Separate Wills: Revocation clauses: Include clear revocation clauses in each separate Will to ensure that they do not nullify Wills from other jurisdictions. Both Wills should acknowledge their simultaneous validity so that a later Will doesn’t automatically revoke an earlier one. Residuary Clauses: These clauses deal with leftover assets. Wording needs to be precise to prevent conflicts. Consider that liquid assets in a jurisdiction may not cover all taxes and liabilities. Decide how tax burdens will be allocated among estates, as this can be a significant issue. Specifying Governing Law: Each Will should explicitly state which governing laws apply to the properties it covers to avoid legal ambiguities.