Is a Will Enough to Pass on Your Legacy?

We all know that writing Wills is essential. It ensures that inheritance issues don’t crop up after you die. It helps you ensure distribution of your estate according to your desire and also aids you in planning out tax efficient structures for the future.

But are your assets only confined to the money you made, the real estate you bought and shares you invested in?

Your life, your learnings, the ideas and values that made you, YOU- aren’t they valuable, hard-earned assets too?  Will you let them die out with your last breath or would you like to pass on the story of your life and make it a lasting legacy beyond money and real-estate?

If you think of that too, then Ethical Wills are the answer.

Ethical Wills help you leave behind your learnings, values and more for your survivors and future generations. Plus, they don’t need to go through any complicated laws, dense statutes and inviolable guidelines.  They add a broader perspective to your legal Will.

Ethical Wills And Their Myriad Uses:

Many family elders think hard of ways to pass on the family legacy- a legacy that is made up of beliefs and ideals enshrined in their personal stories of triumph and failure. With Ethical Wills you can pass on your personal story, belief, and ideals for the future generations. That’s not all…

In fact, people have also used the Ethical Wills concept to leave behind property that has no monetary value but is priceless nevertheless- from family recipes to old photographs and items of personal use that hold value as tokens of love.

As estate planners, we at WillEffect know that property disputes are not always about money. We have seen a family break up after the matriarch’s death because one of the sisters took the mother’s old saris as she said her ‘mother wanted her to have them’. This is regardless of the fact that an estate worth tens of crores was amicably distributed between the two sisters. The old saris created a breaking point from which there was no return.

In such scenarios too, Ethical Wills help. They can help families navigate the tricky issues of emotions and can stop family tensions from escalating by explaining intentions behind the division of property as made in the Will and passing on emotionally charged articles.

So in an Ethical Will you can share-

  • ·         Your values
  • ·         The trials and tribulations you faced and how you overcame them
  • ·         Why you decided to divide your estate in the specific way stated in your last Will
  • ·         Traditions and beliefs that you hold dear
  • ·         Old photos, recipes, old family travel DVDs and personal items- with instructions on which family member gets to keep what and why

How to start:

An Ethical Will is not a legal document and so it has no pre-set format. You can write it as a diary, a letter, a power point presentation, a collage, an audio message- anything will do. The point here is to get your message across.

As many of us find writing things down more difficult than speaking them out, maybe these guidelines will help you get started.

1.       Write down your thoughts

        Start jotting down the things you want to share. It could be how you started your business or how you met your wife or how you went through a crisis. Your life experience can give much-needed guidance to your family.

Over time as you keep writing down your thoughts you will realize certain ideas/ideals/values stand out from the rest. Expound on them and keep writing. This is the story of your life you will find things to say. Later you can crystallize the whole thing in bullet points or a letter.

As a starting point you can use these ideas

i.      The things you have loved doing

ii.      Your best memories

iii.      The thoughts that held you back/ pushed you forward

iv.      What you wish for those whom you leave behind

2.       Make use of resources

There are many free and paid templates and ideas available online. We have collected a few of them for you in this article. You can see this ethical wills worksheet, try this workbook for ideas or fill in this template. If you want something deeper, try books.

Remember your Ethical Will is your love letter to your dear ones. Make it stand out with your emotions and your thoughts. It has to be 100% you.

One more thing, an Ethical Will is not necessarily written late in your life. If you like the idea of creating a legacy document you can do it anytime and keep adding to it as you grow with each experience. Of course, writing an Ethical Will does not mean that you can do away with your legal Will. It only goes a step further than a legal Will as it reveals the thoughts and intentions of the writer and many a times have been relied on by courts to adjudicate on disputes arising from the legal Will. At the same time, an Ethical Will cannot be a substitute for a poorly drafted will. At WillEffect we know the advantages of a well-documented Will for a grieving family.

To conclude, whether your Ethical will is written as a legacy letter explaining the divisions in the Will, or to only share your vision for the future and your memories of the past, or even just to document the traditions you would love your family to follow – in every way an Ethical Will adds to your Last Will. And the best thing is that you can start writing it today… without any help!

Estate Planning After Divorce

Gone are the days where marriage meant a lifetime of togetherness and commitment. Unfortunately today divorce is no longer a dirty word but an ugly reality in India, across all age groups and irrespective of social strata too.

Most often, a divorce entails ugly wars between fighting couples and extended family. Given the scale of bitterness it is imperative to safe guard yourself not just for the present but even for the future.

An aspect of planning that most couples going through divorce overlook, is actually the most important part – Estate Planning, a process that clearly establishes your wish to transfer your self-acquired assets to beneficiaries of your choice in case of death. During the proceedings, untimely death of one of the spouses can only result in various difficulties for the families. Even if the decree has been passed but the respective spouses haven’t made their will up to date or pass away intestate, many claims can arise and bad blood can flow. Therefore it is critical that both parties safeguard and protect their assets.

In India, writing a will even otherwise is still not a common practice, but given the fall outs and long drawn cases that result, it is prudent to plan ahead. It is true that while going through a bitter divorce, death is probably the last thing on your mind, but it is better to be prepared than make your loved ones suffer.

Once divorce is granted it is assumed that the assets/ claims that needed to be split between the couple has already addressed by the appropriate court. Revoking your former spouse from being a beneficiary in any of your newly acquired assets or even the older assets unless decreed by the court, should be your key aim. Your will should be up to date reflecting your current status.

In the day of multiple bank/insurance and other financial accounts it is important to incorporate changes at all touch points. Other changes include revoking any Power of Attorney in favour of your spouse or his/her relative, changing nominations across the spectrum, to asset reallocation.

Whilst making these changes in your will and assets, you must also remember to update family members or people you trust of the changes and probably keep a copy with them too.

However in the midst of the divorce proceeding or just post-divorce,  if  dealing with issues of Estate Planning is the last thing on your mind, there are many law firms today dealing specifically in such matters. A firm will be able to comprehensibly guide you about various issues such as taxation, incorporate trusts if required, Government duties, registration of wills/ trusts, guide you through legalities to even providing a tamper proof safe vault for your will.

Though divorce is a painful process for couples, a little bit of prudence and planning can go a long way in minimizing further misery to all parties involved.

Our article which appeared in Morningstar

Many people spend months deciding exactly how they would divide their estate and possessions after their death but they fail to spend a minute’s worth of notice on the person who would see that their will is carried out to the letter. Yes, that’s the role of an executor. 

Simply put, the executor is the trustworthy and dependable person chosen by a testator to take on the difficult task of distributing the estate according to the testator’s will.
Can the execution of a will be a nightmare?
Execution of a will takes months and weeks of work from sorting out paperwork to clearing accounts, getting probate and much more. Even the simplest of wills require legal advice and documentation. Cases where large assets and one or more real estate properties are involved require extra caution as the executors of such wills can get involved in messy legal battles that can eat into their personal finances too, if they are not careful enough. It took late Bollywood actress Parveen Babi’s executor almost 12 years of intense legal battles to get her will ratified by the Bombay High Court.
Did you know that keeping in mind the issues faced by executors, certain developed countries offer executor insurances? In UK, a survey by Executors Insurance found that 12% of those who in the past had executed a will said it was “a complete nightmare”.
Whom does the testator choose as executor?
Sometimes people appoint themselves as executors of their own wills. Needless to say, that’s completely wrong. (In such cases since there is no valid executor, the court will appoint an executor. As you might imagine that is not the most desirable of solutions.)
We came across this situation recently. Mr. Saxena (name changed), a well-heeled businessman in South Bombay died leaving his property to his two sons. Both his sons were settled in America. Pratik, the elder son was named the executor. In order to fulfill his duties, Pratik took a sabbatical from his job and came to Mumbai. It took him more than 1 year to get things in order. He eventually lost his job, as his company couldn’t wait for him to return. He then had to take over/unwind his father’s old business. Pratik had recently got married and his wife was not open to staying in Mumbai – they got divorced. By the time he came to us for help, he felt he was in a nightmare because in less than a year after his father’s death and after taking on his responsibilities as an executor- Pratik was in Mumbai, without a job and without his wife.
As Indians become more global, sons and daughters rarely live in the same city as their parents. Most of them usually live in different countries. In such situations, becoming executors to their parents’ wills is not taken as a sign of esteem – it becomes an added burden in their hectic lives. They not only have to leave their well-settled lives for months, they also have to deal with unfamiliar laws and situations. Making them executors is not the best solution.
How long does it take to execute wills?
In our earlier example, it took Pratik more than one year to settle his father’s estate. That was a fairly simple settlement without any legal dispute. In cases where legal complications and disputes arise, you can expect more months and even years to go by.
The duties and responsibilities of an executor are very time-consuming. Usually, wills that arise from estates require probate, closing of accounts, payments of creditors, finding potential beneficiaries and much more. Bigger the estate, bigger the problems.
Can a financial adviser act as executor for his client? 
At times, your client may want to appoint you as an executor of his/her will as you are the trusted advisor for his/her financial matters. In light of the above challenges, an IFA should have thought through the following questions before agreeing to be the executor:
  • Am I willing to commit significant time and efforts to this role which could jeopardise my primary role as a financial adviser?
  • If I refuse my client, would it upset him and therefore risk losing my years of efforts in earning his trust and building goodwill?
  • Would acting as his/her executor improve my chances of continuing to be the adviser for the next generation?
Is there a way of finding a judicious balance whereby you could oblige your client without jeopardizing your main profession as a financial adviser?
Get professional help
Mr. Goyal’s (an IFA; assumed name) client had made him the executor of his will wherein he left his three siblings a three-storied house and various other assets. The three siblings live on different floors of the same house with their families. One of the sisters wanted to sell the house, while others were not open to the idea.
Now, Mr. Goyal’s troubles began. He had a very successful IFA practice and he realized that he would have to first spend months getting the will probated and then dealing with the distribution of assets. It was taking up a lot of his time and affecting his IFA practice as other clients began complaining of the poor service they were getting. What was he to do?
In this case Mr. Goyal can seek help of professional firms which offer advice and support to IFAs on these matters so that he can fulfil his executor role without jeopardizing his IFA practice. Getting professional help makes sense for you as it:
  • Allows you to seek support of professionals who are specialists in these matters. Creates a contract. Professional executors sign a contract with you so they will not opt out when the responsibilities arrive.
  • You can be sure that client’s wishes will be carried out exactly according to the will. It reduces the possibility of legal suits where any of the disgruntled beneficiaries try to question executor’s intentions.
  • The professionals equip you to deal with complicated situations. E.g. when one or both the witnesses die before the will comes into force. This leads to even more issues that simple individuals are unable to deal with.

Thus, while offering executorship is an invaluable service which an IFA can offer to his/her clients, without professional help, it could become a nightmare.