Why Will-Writing Matters, and How to Do It
As you cross the milestone of retirement, you can begin to enjoy the fruits of your financial planning – but the planning doesn’t end here. New responsibilities and tasks emerge as you begin to build your legacy and the future of your family, by drafting a will and pursuing estate planning. This is a continuation of your goal-based financial planning journey, designed to ensure your post-retirement personal finances are secured.
Jan 2022
4 mins read
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Many people delay will-writing, for understandable reasons. Drafting a will appears morbid to some as it raises fears of death. You may be worried about disputes with your family if they are unhappy with your plans. Some even think it’s futile to make a will so early as they still expect to live several years, and a lot can change in this period (though actually, until you register your will in court, it can be easily revoked and modified as per changes in your life).
Despite these apprehensions, you should not delay your will any further. It is a critical component of your financial goal planning, and an important step that will help secure your legacy and the future of your family, preventing ugly disputes and uncertainty in the future.
Let’s look at some of the benefits of drafting a will in time:
● It helps make bereavement less painful and complicated – Losing a close person is always a traumatic experience for the family. Having to deal with lawyers at this difficult time can be a huge, unnecessary burden. A will protects your family from unwanted legal hassles at a time of sorrow.
● It eases the transfer of assets – A valid will makes the transfer of assets and investments faster and cheaper. It also helps you protect your savings and investments from draining legal fees, ensuring they end up in the right hands, according to your wishes.
● It offers financial security – A will can help provide financial security for your family. If you don’t have an existing Will before you pass away, then your assets and investments will be divided as per the law. This can lead to long, messy disputes that will drain your family’s resources and leave them in financial limbo.
● It helps protect your business – A will is also a good way to ensure that your business or company is handed over to your heirs and co-owners securely. When you’ve spent years building something, it is especially important that its future is not jeopardised because the formalities are incomplete.
Now that we’ve established the importance of drafting a will, we examine a common misconception – that this is a one-time exercise. However, this is not true – writing a will is just the beginning, and you must take several more steps to ensure a seamless transfer of your assets and investments.
That is why will planning should be seen as part of a financial planning journey. This covers steps such as developing contingency funds for your loved ones (so that no one feels left out), ensuring availability of liquidity funds and communicating the opportunities and challenges of the will to your family-members.
Keeping all this in mind, here are 8 simple steps to create a will for yourself:
● Drafting a declaration – You can start by formally drafting the opening declaration, stating that this is your Last Will and Testament. It’s essential to declare that you’re putting together the will in your proper senses and without any sort of coercion. You should also mention details like your name, age and address.
● State the extent of your property – You must provide a list of all your property assets such as land, houses, bank deposits, shares, investments and mutual funds, along with their value. You must also communicate where these are held.
● Enlist mutual fund beneficiaries – Mutual fund investments for retirement planning are incomplete without a plan for their transfer. Mutual funds can be held singly or jointly. The mode of operation can be set as either-or survivor or joint. If it’s a joint investment, then the mutual fund is passed on to the second holder after the first holder expires. If a nomination is mentioned but there’s no joint holder, then it passes on to the nominee. For the transfer to be processed, the nominee or the joint holder will be required to draft an application. A will is one of the documents that eases this process, helping transfer mutual fund investments to the rightful heir as per your instructions.
● List all other beneficiaries – Next, you can name beneficiaries for all your other assets and wealth. In most cases, the beneficiaries will be your spouse or children. Whoever it is, it’s best to clearly list them in your will.
● Appointing legal guardians for your children – If your children are still minors, you may need to appoint legal guardians for them until they turn 18.
● Choosing an executor – An executor helps carry out the wishes mentioned in your will. They will ensure the transfer process occurs smoothly and will be responsible for the distribution of your assets and investments to the beneficiaries.
● Signing the will – You will have to sign the will yourself as well as get two other witnesses to sign it.
● Registering the will – This is the last and the final step in the will creation process. You may want to get your will notarised. Although it’s not compulsory to register your will, you may choose to get it registered with a sub-registrar. For this, you must take two witnesses to the sub-registrar’s office and get the will registered after paying the fee. It then takes about a week for the process to be completed. Registering your will has several advantages – it’s difficult to tamper or steal a registered will, and by virtue of being in the custody of the registrar, it cannot be accessed without your permission.
As a conscientious investor, you’ve followed all the guidance and tips for investment and money management through your life, and this is the last piece of the puzzle. A properly planned will ensure that all your wealth, assets and investments are distributed to your rightful heirs smoothly, securing your legacy.
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All the Mutual Fund investors have to go through a one-time KYC (Know Your Customers) process. Investor should deal only with the Registered Mutual Funds (RMF). For more info on KYC, RMF and procedure to lodge/redress any complaints, visit https://www.pgimindiamf.com/ieid.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY. Read more
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