Like most key financial goals such as buying a house, marriage and children’s education, one occurrence that is more than certain is the end of life. It is undoubtedly a grim reality but nothing short of a gospel truth. Some investors tend to defer their plan to write a will to a later stage.
The procrastination continues and finally it is put on the backburner. However, it should certainly be avoided. Let us explain why. These are a few key reasons for which writing a will is not only considered vital but also recommended:
1. Heir versus nominee: In the absence of the will, a nominee may consider himself/herself to be the legal heir which may not be true.
Ideally, there is a difference between an heir and nominee. A nominee is a mere custodian of the asset until it reaches the rightful legal heir. The nominee and heirs can be the same person but it may not necessarily be the case.
2. More than one legal heirs: When an asset is meant to be transferred to more than one legal heir, there could be chances of avoidable legal battles. By writing a will, the owner of an asset can eliminate any such occurrence.
3. Immediate transfer of assets: Losing someone close in the family is an emotional denouement that could take your attention from everything else including money matters. It is natural to grieve the loved ones instead of deliberating over the wealth they left behind.
However, when there is a clearly-defined will written by the deceased, then it makes more sense (and seen as a duty) to transfer the asset at the earliest instead of waiting for a long time in the future.
4. For minor kids: In case there are minor children in the family, a clearly-drafted will protects them and ensures safety and protection of guardians to the little ones.
5. For donation to charity: In case you want to leave a small or significant part of your money for charity, you can mention the same in your will. This will ensure that the asset (s) allocated to the charity are not transferred to someone else.
6. Managing your financial affairs: When you have a slew of financial assets, it is incumbent upon you to appoint a nominee to look after your financial affairs so that all the assets are transferred as per your wish, and that too in the right proportion among your legal heirs. Therefore, nominating a nominee is imperative to make all this happen.
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Published: 22 Dec 2023, 11:22 AM IST