It is crucial to have a well-prepared document to avoid misunderstanding between heirs
"Death is not the end. There remains the litigation over the estate," said Ambrose Bierge. Any litigation over an estate erodes not only the family wealth but also family relations. A well-crafted estate plan and with a well-drafted will could avoid such litigations.
A will puts down the wishes of a person for distributing her or his estate. As the will-maker would not be around to testify those intentions, it is crucial to have a well-prepared document. Some common mistakes one should avoid while preparing a will are:
Drafting errors: Penning down your intent very clearly in a legal language is most important. Any ambiguity could lead to different interpretation by the court and family, leading to disputes. For example, a common drafting mistake is when people write:
My properties shall pass on to my wife and after her to my children.
This sentence unknowingly creates a life estate favouring the wife. However, she only gets the right to enjoy the property and curtails her absolute freedom to deal with it. Most of the time, the intent is to pass on the entire property's absolute rights to the wife. However, if she predeceases, then properties are passed on to the children. Similarly, there are several instances where inappropriate use of language causes confusion.
Omitting essential clauses: If residual clauses like the appointment of an executor, or a guardian for minor children are left out, courts may be required to intervene for making such appointments.
Bequeathing assets, you are not allowed to: Some assets may have restrictions. These may not be allowed to be disposed under a will. Making a bequest of assets such as ancestral properties or tenancy rights in pagdi properties, where the tenant is also a co-owner of the property, could lead to legal disputes.
Not exercising appointment powers: You may be a trustee of a private or charitable trust and may have the authority under these documents to appoint your successors, trustees or beneficiaries. One should check these documents and exercise such rights under their will.
Being too specific while distributing financial assets: Normally, a person who has a few bank accounts, mutual funds, demat accounts and investment portfolios would keep shifting funds from one account to another to maximise returns. Giving away a specific bank account to one child and another account to another child may not be the best way of distribution. One may instead look at dividing the financial assets in a particular ratio. However, there would be exceptions to this.
Being too generic while distributing immovable assets: Dividing all immovable assets in any ratio amongst children would result in all of them inheriting the property jointly. If any child wishes to sell or lease these assets, all other siblings' consent would be required. This may not come very easily. Those with several immovable assets may consider bequeathing specific ones to different children, if possible, after considering the valuation and location.
Partial involvement of spouse: Often, when couples prepare a will, one takes the lead. The couple may broadly discuss that all assets should pass to each other and then to children in a particular manner. However, one should involve the spouse in discussions along with a lawyer. This is especially applicable when the husband and the wife have separate wishes. This could be providing for a parent, other relatives, charities, etc.; Both may be able to provide valuable feedback in the entire exercise.
Incorrectly witnessing the will: For a will to be legally valid, it must be signed in the presence of two witnesses. These witnesses cannot be named beneficiaries in the will and should be over 18 years; or, the will is considered void.
Not explaining your decisions: When you exclude some of your heirs or make unequal distribution between them, it is prudent to spell out the reasons, to avoid any disharmony and misunderstanding. You may also consider involving them in the will writing process.
Not accounting for debts or liabilities: Before an estate is distributed, the deceased's debts shall be paid off. The details of the loan or obligations, the assets which shall be used to discharge these liabilities and whether the estate or a beneficiary shall be responsible for discharging the liabilities shall be specified.
Simple mistakes like not dating the will, not numbering the pages, or handwriting some contents while printing the rest create suspicion as to the valid execution of the will as seen in Kavita Kanwar v. Pamela's case Mehta.
The author is AVP, Succession Planning at Emkay Wealth Management
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