This pandemic year has shown us how uncertain is life. There is one certainty that is death. I recently came across so many cases which has issues of funds/investments/bank accounts etc. just because the nomination, will etc of a deceased where not in place. Today, you not only need proof of death but also who actually is the true legal hire of your properties etc. If the documents of the deceased are not proper or don't mention the successor or the legal heir, then it becomes a huge problem to clear the legality of the assets. On the other hand, liabilities get transferred easy. So it is very important for us that post death documentation is prepared as soon as possible.
Even your spouse would need clear title on your assets, which is possible only once you have actually mentioned them as nominee or mention in a will or in a legally binding document that your spouse will be your successor. Especially when ancestral property is involved it becomes very important to clear title. Most of the assets are lying in property disputes due to claims of possession.
So what can you do to help your family members to avoid such unpleasant situation. The solution to this is as under:
1. Nomination
The most simple for of securing rights of your loved ones is by nominating them as your successors in case of your death. Now the question is how to do that?. The answer is very simple file a nomination forms available with banks, investment institutes, insurance co., for houses, etc.
Almost all the investments etc have made it mandatory to mention a nominee while opening account or making investments. The requirements of a nomination form are simple. One needs to submit basic identity proofs of the intended nominee along with the nomination form of organization where nomination needs to be submitted. This is hassle free and helps where there is no will as these days it forms as a basic KYC requirement to nominate someone to your bank accounts, EPF, PF, mutual funds & other investments.
2. Will
A will is a legal document which defines one's legal heir's, successors or person of interest on death of that person. In certain cases a will may override nomination of an asset made. In event of death of a person will comes into force and assist in asset distribution without any major conflicts. To prepare a will one to keep the following in mind:
- List done the assets held.
- List done the people of interest.
- Make a list of distribution as per preference.
- To draw a will take help of professional's like financial advisor/lawyer/or anyone with expertise.
- Provide the matter to the for draft will to the professional.
- Proof read the draft and ask for it to be in stamp paper for signing.
- Once the will is ready sign along with two witnesses who have signed the will in the presence of the testator and the testator has signed the will in their presence.
- It is advisable to get it notarized and registered for making it a more impacting document.
Kindly note a person should be of sound mind, above 18, not under influence of any substance and in mentally fit medical condition to sign a will.
3. Probate
A probate is copy of a Will certified under the seal of a court of competent jurisdiction with a grant of administration of the estate of the testator. A probate can be granted only to the executor appointed under the Will. Further, a probate is essential if the Will is for immovable assets in multiple states.
4. Power Of Attorney - POA
A power of attorney or letter of attorney is a written authorization to represent or act on another's behalf in private affairs, business, or some other legal matter. The person authorizing the other to act is the principal, grantor, or donor. The relationship between parties is that of an like a principal and agent. The one who gives POA is principal and the one to whom POA is given is agent. There are 3 types of POA general POA, limited POA and durable POA. A genaral POA is given to handle assets on behalf of the owner of assets. A general POA won't transfer assets to the person handling the assets. A limited POA is task bound POA given to POA agent. A durable POA specifically says otherwise, agent's power ends if principal become mentally incapacitated. However, a power of attorney may say that it is to remain in effect in the event of future incapacity of the principal. A POA can be revoked by principal any time he needs.
5. Trust
A Trust is an obligation annexed to the ownership of the property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner. There are 3 parties to trust.
- Author/Settlor/Trustor/Donor: The person who wants to transfer his property and reposes confidence on another for the creation of the trust.
- Trustee: The person who accepts the confidence for the creation of the trust.
- Beneficiary: The person who will benefit from the trust in the near future.
Let's walk through this with an example:
Mr. A wants to pass his bungalow (property) to Mr. Y for the benefit of his minor granddaughter. Mr. A passes his property to Mr. Y, because he reposes (has) confidence on Mr Y. This is nothing but the essence of a trust. A trust deed is a legal document that sets out the conditions, terms and rules for creating and managing your trust. They will ensure that the execution of the trust complies with all relevant state or territory laws, as well as review and update the trust deed as necessary.
In simple words, a trust is nothing but a transfer of property by the owner (Mr. A) to another person in whom the owner has confidence (Mr. Y) for the benefit of a third person (Granddaughter of A).
The property doesn’t just mean real estate. It could be cash, shares or any other valuable asset. Further, the instrument by which this entire trust is declared/created is called "the instrument of trust" or the "trust deed". A trust deed is a legal document that sets out the conditions, terms and rules for creating and managing your trust. They will ensure that the execution of the trust complies with all relevant state or territory laws, as well as review and update the trust deed as necessary.
6. Advance Health Care directive
The rights to physical integrity and self-determination are fundamental rights which are available to all human beings. In the event of a terminal disease, a person's decision to utilize or not employ a life-sustaining treatment is a significant personal decision. The concept of an Advance Medical Directive is gaining popularity around the globe. In this regard, various countries have enacted required legislation.
People in several jurisdictions around the world have the right under common law to refuse medical treatment which might be unwanted at a certain age, and no one can be forced to continue such treatment if they do not want to. It is a violation of a person's right to personal liberty to begin a medical treatment against their will.
Advance directives generally fall into three categories: living will, power of attorney and health care proxy. The right to die with dignity has recently being legalized in India and this really is helpful in cases of terminal illness.
These options can help your loved ones to get what is rightfully their and avoid unnecessary hardship or conflicts. Being ready for future is most important in times like today and if you are a parent this is a small parenting tip to help your loved ones in future when you won't be around.
Disclaimer: Above mentioned are just options you may seek help from professional. Leave comment to get such help.
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