Why you should have a will NOW…
This article appeared in MoneyControl…long ago..I thought it is worth a repeat..
Why do people postpone making their will? They think they will never die? Or they are sure that all their heirs know about their inner desires? Well read on…
The current generation of clients whom I meet is inheriting nice big round amounts of money. However since their own salaries are far, far higher than their parents, the amounts do not look big. This means the `inheritors` may feel bitter about some inheritance arrangements, but it is not leading to too much of litigation. Also, making a `Will` seems to be a simple job; just download a Will, fill in the details and your Will is ready. Or so you think.
But let us look at what could be the potential problems in the Will that you create.
I have seen horror stories in the Wills and inheritances that have happened, let`s take a look at them!
Scenario 1: One child depriving the other children of their rightful share: I have seen this happen, especially if the other children did not know about the existence of the asset. Other scenarios are other children are magnanimous to let it happen, they are too old and weak to fight, or they are worried about that affecting the relationship, etc. In case you wish to make sure that some of your children do not deprive the other children of the money, make sure you say it in your Will, loudly!
Scenario 2: My brother is not even bothered about my father, I have to look after him, and so his house in Santacruz should belong to me. Excellent thought. But sister, did you know that as soon as the sun rises after your father`s funeral, your brother can go to court and claim `undue influence`. Especially now that the flat is worth Rs. 1.7 crores! Though it sounds `justified` giving all your assets to one child who took care of you may not be a great idea. Pay the `caretaking` child a nice salary : after all you will pay a full time nurse, will you not !
Let us say you think your `sacrificing daughter` deserves a salary of Rs 30,000 a month that will amount to Rs 360,000 a year, for 5 years that will amount to only Rs 18 lakh, not Rs. 1.7 crores as she claims!
Scenario 3: Will my second wife leave all the assets to the children of my first wife? If you are into `TV serial kind of relationships` or a simple second marriage, ensure that the children of the first wife, the first wife, the second wife, and the children of the second wife are not in any kind of a financial `joint relationship`. It does not work. Simple, but true, you need to separate them and your Will has to be well drafted.
Scenario 4: Your daughter wants to move in with you to look after you. How noble! But after 3 months she asks to be made a joint owner in your property. You do not like it, but grudgingly you oblige. Your daughter is of course a sweet heart. And she cannot say no. In fact she had `forgotten` to tell you that she is a guarantor to her `artist` son`s TV serial venture which ran aground 2 years back. Can the bank start chasing YOUR PROPERTY? You bet!
Scenario 5: You spent Rs 5 lakhs on your son`s education and Rs 12 lakhs on your daughter`s wedding expenses. Your son wants to know how are you planning to leave the house to them `equally`- after all there was no equality while spending! So he wants a bigger share in the inheritance. You do not need to fret and fume, just communicate.
Scenario 6: You think your `qualified` son can do with a smaller inheritance than your daughter who married the high school sweet heart. Your son is doing very well for himself, likes his sister, but knows that brother-in-law is a bum. Well ask your son, he might think differently! He might legitimately say, `look give me more, I will be there for her when my sister needs me` or say `Are you punishing me for doing well in life and leaving your money to that bum!`. Communicate with your children, do not assume.
Scenario 7: You loaned Rs 10 lakh to your son when he bought that penthouse, he knew you had the money and you gave. Now your son of course did repay in the first year very promptly, second year a little less promptly and third year only 8 cheques came. Now he is avoiding your calls! What do you do? If your relationship is important, bite the bullet. Most importantly let the other children know it, and ensure that this is mentioned in the will; now dividing the rest of the assets equally is unfair. Keep track of all your investments, loans, etc by downloading free (trial) accounting software from www.myirisplus.com
There are of course many circumstances in life which have not been enumerated here and could be unique to your case. It is necessary that you consider a financial planner for deciding how your will should be made and then a lawyer to actually draft the same for you especially it there are non-family beneficiaries. Some simple solutions that I have seen include buying a life insurance policy early on in life and making the appropriate person the beneficiary. For e.g. a client has taken an endowment policy and made his driver a beneficiary – in fact he has assigned the policy to his driver. What is the logic? Well the client is an entrepreneur with a net worth of Rs 60 crores, but he is not sure that his wife and daughter will have the magnanimity to give Rs 10 lakhs to his driver so this solution.
mahesh nadgaudi
Dear Subra,
Wonderfully written in a lucid language.. Keep enlightening with varied topics like this.
Long time not met. Will love to catch over coffee sometime.
Warm Regards as ever,
Mahesh.
Vidya
Seems a little heartless in Scenario 2 – to relegate the care of a daughter ( or even a son ) to that of a nothing but a nurse !!!! I mean taking care of an elder person in one’s home involves more than that … right ?? Social life, Emotional life … everything is different .. vs that of the sibling who does not pay anything in this department. Especially if the parent is completely home bound / bed ridden!!
Another thing I came across which a doctor told me .. was methods of treatment in the hospital.( Yes it is morbid but … something to think about ). He mentioned that they encourage senior citizens to mention in their wills if they want to go in for aggressive methods of treatment [ dialysis, ventilator, shock treatment etc ] or just supportive treatment.
While this wish so mentioned has actually no legal standing it helps the children make a decision in the treatment. It can be over ridden by the wishes of the children. However if the elder does not want to be hooked onto machines for days on end … this line gives the children an idea of what to do if the scenario looks less than hopeful.
subra
Vidya did not get your drift..does it mean the daughter should get the Santacruz flat as a ‘favor’ for looking after her parent?
You are talking about a ‘Living Will’ it is still not recognised in India. Moreover in a world where most people live for others the living will will be ignored. People treat their parents in hospitals also because ‘what will people think’ kinda shit. So how many people have the guts (a cousin did it) to say ‘My dad is in complete control of his senses, and I will only use homeopathy for treating his cancer – and reduce pain instead of chemo..etc.’. My uncle was 82 and lived for 3-4 months after being diagnosed for cancer. But a week before his death when I saw him..he was still cheerful and talking…NOT all kids have so much sense.
Vidya
I agree with the “what people will think” attitude too. The doctors/hospitals also pressurize the patient’s relatives if they consider anything other than the regular mode of aggressive treatment !
I did not know it was called “Living Will”.
No I did not mean the daughter ( or son for that matter ) should get the house ) as a ‘favor’ for taking care of the parent.
I feel that both items are actually independent.
But taking care involves so much more than just nursing. So if I were to reduce it to money shouldn’t the compensation be more than just that of mere nursing w/o it being labelled as “undue influence” ??
Vidya
Ok I don’t think I have mentioned what I am asking very clearly.
In Scenario 2 – If I were the father/mother with the property I would want the daughter who took care of me to get more compensation w/o it being labelled “undue influence” !! I would most preferably not want be in that position of gratitude ( would want to be in a senior citizen home if possible ) but if I did end up in one child’s home while the other did not bother … I would want one to be compensated for more than the other !
If I were the daughter/son who was taking care I would want more compensation. In an ideal world we would take care of parents w/o expecting benefits but we do not live in an ideal world nor do we have ideal feelings !
If I were the other son who did not bother I would cynically want a piece of the pie simply by virtue of being related by blood.
Can these 3 ideas be reconciled via a WILL w/o being contested in court ? Is it even possible ?
subra
Hey Vidya did I touch a raw nerve? Sorry. Of course if I am the owner of the property, I CAN decide what to do with it. If I see my kids fighting over who will look after me, I could sell the property and use the cash to move into a old people’s home and will the balance to them!
Most important thing is to communicate. If the solution is other than just a simple 50-50 split, it is necessary to document it and convey it without any ambiguity, that is all.
But to say ‘I looked after my parents, so I deserve the house’ will not stand in a court of law. So if one sibling went to court when there is no WRITTEN intention of the parent, this argument will not hold water.
Vidya
No no .. you did not touch a raw nerve. I wanted to know b’cos to me it sounded like there was no way out !!! Even with a will .. say one in which I wanted to ‘reward’ one child over another for whatever reasons … and it could be contested …. then it seemed like there would be no point in making the will anyway !!! This puzzled me.
But your last entry clarified things for me.
T K VANI
Hi subra and others,
Wanted to share a interesting anecdote .A famous doctor from chennai migratred to US after having a successful carrier to live with her sons there in her old age. She wanted to pass on her wealth (her life earnings and savings) roughly some 20 lakhs (that was in 1990-91) after retaining some of it for herself.So she gave 5 lakhs to her elder daughter in law who used it to buy a diamond choker .the second daughter in law an American, bought home a nude painting with the money!