A proper estate planning protects your family and your assets if you die or become incapacitated. Following things shall be kept in mind while planning your estate:
- deciding who will get your things when you die
- naming guardians for your children and their property
- naming an executor to wrap up your affairs
- avoiding probate, or
- preparing for a time when you may not be able to make your own financial or medical decisions.
To accomplish this task, you might need a (living) will, (living) (revocable) trust, and power of attorney. The choice of execution and document(s) will be different on case by case basis.
Wills:
A basic Will can be written to determine who will get your property, who the guardians of your (minor) child(ren) be, and who the executor will be. These are imperative estate planning goals and hence it is recommended that all people shall make a will. If a Will is not made, the Indian intestate laws would come into play and your property would be accordingly devolved based on the intestate act applicable on you.
The Wills, in most cases, can be made without a lawyer but if certain conditions are to be placed on your gifts, such as, a condition to bestow everything on your son if they stay sober, or if you want the property to devolve on your wife first, but after her death, on your other legal heirs, advise of a lawyer would be imperative.
Probate is the process through which Court certifies the Will for distribution, by the Executor in your Will, of your property amongst the beneficiaries under your Will after your death. Probate is often time consuming, expensive, and a big hassle for the family. In order to avoid this, get your will registered.
Living Trusts:
The Living Trusts can be used to keep your property out of probate. Probate is the process through which Court enables distribution of your property amongst the beneficiaries after your death. Probate is often time consuming, expensive, and may be a big hassle for the family. In order to avoid this, a living trust can be created, and all the assets and properties are transferred in this trust. The beneficiaries and trustees of the trusts are explicitly named.
Living trusts are ideal for people who own significant property, and want to keep that property out of probate. But, unlike the Wills, which have been explained above, the trust is not for everyone as not all the estates would benefit from the same. Even if you create a living trust, a Will would still be imperative in which you shall name the guardians of minor children or other dependents. The Will would also contain the beneficiaries of the residue assets which have not been transferred to the trust.
Financial Powers of Attorney:
A financial power of attorney has to be used to authorise someone to take care of your finances, in case you are not able to. If this power of attorney is made ‘durable,’ the validity of the same would continue even when you become incapacitated. The power of attorney can also be made ‘non-durable,’ which would only be valid with respect to the specific needs, for example: your father’s ability to sign cheques on your behalf. You would want to create a durable power of attorney in case you want someone to takeover your financial affairs in case you become incapacitated or unable to take your financial decisions.
When you create a durable (financial) power of attorney, you appoint someone as your ‘de-facto attorney’ or your ‘agent.’ In case you do not want to give broad powers to the person, you have to specifically state what kind of powers have been given to them. This de-facto attorney will have control over your finances and would be responsible for your well being in case you become unwell or incapacitated, so a trustworthy reliable person should be named your de-facto attorney.
Health Care Directives (Health Care Powers of Attorney and Living Wills)
The Living Wills are used for two purposes as follows:
- name a person who will make health care decisions for you when you cannot, and
- state your wishes for health care, organ donation and final arrangements.
Living Will documents require due process to be followed and advise of your legal counsel shall be sought before drafting the same.
By:
Vijay Pal Dalmia, Advocate
Supreme Court of India & Delhi High Court
Email id: vpdalmia@gmail.com vpdalmia@vaishlaw.com
Mobile No.: +91 9810081079
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