While WILL is a general way of transferring assets to any one, the more common need happens to be to bequeath to progeny or siblings. This is easily achieved by SETTLEMENT which is easy and is done at a fraction of the cost and time involved in conveying property by WILL. This aspect is mostly not being mentioned generally.
SOME TOPICS OF INTEREST FOR SENIOR CITIZENS
(Compiled from Monthly Journal of the Accountants General Offices Pensioners' Association April 2012 Issue)
THE WILL
WHAT IS WILL ?
A "will" is a disposition of property made by a person during the life time but intended to take effect after his death. The word "WILL" is defined in Sec.2(h) of The Succession Act, 1925. "WILL" means the legal disposal of the intension of the testator with respect to his property which he desires to be carried into effect after his death.
Main Characteristics of a WILL are :
1. A will must be intended to come into effect after death of the testator.
2. A will is revocable by the testator at any time.
3. Generally Wills are made for disposition of property, but they can also be made for creating Trust and appointing executors.
4. A Will may be for appointing a guardian for minor children.
When one should write a will ?
Make a will when you are in sound mental and physical health condition. It is advisable to write a will early in life, additions can be made or revised whenever the need arises. Death comes at all ages and without warning.
Why one should write a WILL?
If you want to bless your children bless them with a will and save them from harassment at the hands of municipal authorities, Banks, Insurance companies, Revenue Offices, Courts and last but not least, the greedy relatives.
Generally, every one neglects to write a 'WILL". Common reasons are :
a) I am too young to write a WILL.
b) I do not have a big estate.
c) I have nominees for my assets and hence I do not need a WILL at all etc.
But the reality in life is otherwise. Age is not a key-factor. There is nothing you can give guarantee to yourself that you can live up to ripe old age.
Size of the Estate is not at all the criteria. Even a small house costs Rs.50 lakhs in the cities in present days. Nominee holds the asset in trust and pass it on to the legal heirs. Nominee cannot replace the legal heir.
IMPORTANT FACTORS to be kept in mind while writing a WILL
a) While making a will, always consult the spouse who traveled with you leaving all her earlier friends and parents.
b) Do not neglect the married daughters. They always look at, at least, for a small piece of parental property in memory of parents.
c) Mention full identifiable details of the property, names and age of the heirs, beneficiaries.
d) Clearly mention the share of each beneficiary. It is advisable to keep the entire property with the spouse and passed on to all legal heirs only after her demise.
Whether registration of a will is compulsory ?
In general, registration is not necessary. However, registration is advisable for practical and legal reasons. Unregistered will on a white paper with two witnesses is enough if one has limited uncomplicated properties like a house and fixed deposits etc. On the other hand, if some of the properties are under litigation, having disputes in title, business property, having properties without nominations like insurance, bonds, etc., a registered will carries more weight. Registered will is an unsuspicious evidence where as unregistered will pay give scope of suspicion whether it is genuine or otherwise. In case, there is no nomination, a registered will is necessary for mutation purposes and also useful to get money from PF, Gratuity, LIC Policy, Banks, Mutual Funds, Bonds, Shares, Post Office Deposits etc. Even for transfer of a motor car, one needs preferably, a registered will. If you are a business man, you need to decide who takes over your business after your demise. In a proprietary concern, if you do not leave a registered will, all heirs will become owners of your business. At the time of presentation of an unregistered will (in the absence of a registered will), other legal heirs generally dispute and results in filing declaration suit incurring huge expenditure on avoidable litigation.
These days, a large number of parents have all their children settled abroad. For their sake, it is highly desirable and even essential to write and register a will. The properties of such parents after their demise are vulnerable to the greed of dishonest persons trying to grab the property by any means either fair or foul. Government has now permitted to send the sale proceeds of such properties to the children settled abroad. Under Foreign Exchange Management Act (FEMA), an amount up to one million US Dollars can be remitted to outside India in one calendar year, through normal banking channel provided a certificate from a Chartered Accountant certifying that tax for all transactions have been paid and evidence of inheritance of the property shown to the bankers for such remittances. Bank authorities may not be convinced with an unregistered will written on white paper.
If we go to any government department or financial organization to claim our title and at the time of mutation (changing the title) in favour of beneficiary of the will at municipal offices, electricity department, water and sewerage board office for payment of taxes, electricity bills and water bills and show a will on white paper unregistered, everyone will look at us suspiciously. If you show a registered will, nobody will question about your claim. – This is the difference.
Except in some cases as mentioned above, the will written on white paper and unregistered is perfectly valid. The essential factor on will is "signature of two witnesses" preferably young and reliable. If a person writing a will is very old, a certificate from a Doctor be obtained on the will itself regarding the physical and mental health of the writer, will have an added validity.
Most of us believe that on the demise of an individual, all property including money, shares, FDs etc., will automatically pass on to the spouse. There is no such provision in any law. Property passes to all legal heirs. Spouse becomes one of the legal heirs. So it is the responsibility of the spouse to ensure that spouse writes will and this is the only way for smooth transfer of title of property among the family members. If wife an husband have different properties, both must write separate wills. All those who are childless or single family member or unmarried male/female must write a will and get it registered to avoid future consequences of legal troubles of succession.
What happens when there is no "Will"?
If one dies in testate (without telling his desire), the individual's property goes to all legal heirs as per law. If there is dispute among legal heirs, they have to approach court for obtaining a succession certificate.
After the matter is settled, "legal heir certificate" on stamped paper of 2.5% of the value of the property is issued. If total property is worth Rs. One crore, stamp duty shall be two lakh fifty thousand and some more thousands in advocate fee and delay of five or six years, coupled with disturbance in peaceful life of the children, could be caused.
In case of properties purchased from Housing Boards, Municipal Development Authorities or from Power of Attorney Holders, please get the mutation done as early as possible. Many people are reluctant to get lease hold property be converted into free hold property thinking that they are in possession or having power of attorney/a will in their favour. But they must know that power of attorney lapses with the death of executor. "Will" comes into effect only after the death of the person who writes it. Even after his death, finding the witnesses may become difficult. More important at the time of transfer of property from lease hold is that the seller (MDA or Housing Board etc.,) may insist a "no objection" affidavit from legal heirs, if will is in favour of someone other than legal heir. In such circumstances, it is doubtful if any legal heir gives a no objection affidavit to a power of attorney holder or beneficiary of a will. Cost of conversion from lease hold to free hold is increasing day by day due to increase in land prices. So conversion from leasehold to freehold at the earliest is the best.
What can be bequeathed (mention) in the will?
All self earned properties, movable or immovable can be bequeathed. For ancestral properties, the law of succession will apply. The property inherited from a person other than father, grandfather, great grandfather etc., is considered to be self-acquired, therefore, can be willed. Give the full details of the property, name, age, full address and location, full description from whom it is bought etc. Similarly give description of business, shares, FDs etc. One should consider proper care in using the words. Generally, all properties bequeathed first to spouse and after spouse's demise distribute to sons and daughters. One can also mention that spouse has full right to sell the movable or immovable property. One can straight away distribute the property to all legal heirs including spouse.
Drafting the Will?
One should take proper care in using the words. I will mention one or two cases brought to my notice about the usage of words in the will and consequential effects. --- One has written a will equally distributing the properties between his two sons. He also mentioned "My wife will have right to stay in the house owned by me". Can you guess what happened? She has been forced to live in a small car garage, since is also the part of the house owned by her husband.
Another case: A person had seven portions house. He had seven children (4 sons + 3 daughters). Gave the seven portions to seven children through a will. He also writes "My wife lives on her pension". He did not mention any separate portion of the house to wife thinking that she will stay along with their children in any portion/portions as she likes. Hence, no specific mention is necessary. After his demise, all the seven children gave their respective portions of the house to rent and gone to their work places located at other cities. Mother has practically no place to stay as per the will. She is now in a rented house spending nearly more than 50% of her pension towards rent. No child wants to lose their rental income from gifted property, which caused her homeless.
I recollect one saying which is popular in Rayalaseema area.
"You think all the people, including your wife and children are bad, it is for them to prove otherwise." It appears, in these days, a very valuable saying.
T. Bhaskara Sharma
TRAIN YOUR WIFE AS A WIDOW :
"JAATHASYA MARANAM DHRUVAM"
1. The senior citizens – at the advanced age, should be prepared to face any eventuality with ease and grace.
2. AGOPA NEWS, January 2012, has listed out certain "End of life issues" with the courtesy of "Bharat Pensioners". The following few lines are supplementary to the list. They are for the benefit of those few who are confined to the four walls of the house.
3. If you initiate a talk before your wife about the courses of action to be taken by her after your death, she may not relish and it will not be palatable. The sentiments are strong and sensitive. But you must educate her indirectly and make her do some practical exercises so that she may gain experience and confidence.
4. Drawal of pension from the bank account – operation of the account by your spouse
Government of India have issued orders in 2005 for payment of pension by credit to joint bank account operated by a pensioner with his/her spouse. If your wife is not aware of the process of writing cheques, tell her a small story as follows:
Smt. "X" was not aware of the process of writing a cheque. She took the pass book and cheque book to the bank and sought the help of somebody in the bank for withdrawal of Rs.1,000/-. Smelling her innocence, the stranger drew the cheque for RS.10,000/-, took her signature and withdrew the cash. He gave only Rs.1,000/- to her and returned the passbook for presenting it later for entries. The innocent lady was duped.
Then encourage her to make out a cheque for a small amount. Do not get annoyed even if one or two cheque leaves are damaged. Take her to the bank and guide her to complete the encashment. Throw a smile on her face and appreciate and applaud her capacity. Induce confidence in her and let her continue the process whenever cash has to be withdrawn. Tell her the power of drawing cheques is delegated to her. She will gain strength and will be elated. The procedure for withdrawing money from the Post Office Savings Bank account should be explained and she must be encouraged to do so practically.
5. Remittance into SB A/c.
Tell her a small story about a lady who went to bank for remittance of cash into the SB Account and sought the help of somebody for making out the "Pay in Slip". Who prepared the pay-in-slip, took her signature and pretended as if he is helping her from the ordeal of standing in the "Q". He scribbled something on the counterfoil – gave it to her and disappeared, without actually remitting the cash.
Then explain how the "Pay in Slip" should be prepared and remittance made. Continue the process whenever cash has to be remitted into the SB Account, in bank or Post Office.
6. What she should do immediately after your departure ?
Tell a story that Mrs. "X" is suffering for want of money after the death of her husband Sri "K" or she is not getting her family pension. Tell her that people were coming to Sri "K" during his life time for advice and guidance and that nobody turned up for rendering any help after his departure.
Tell her that after the initial grief and completion of rituals, she should muster strength and courage to go out to obtain the "Death Certificate" from the Municipality/Panchayat. Take her out for a stroll and show the Municipal/Panchayat Office. Prepare the following when you are alive and give her 3 or 4 sets of each to be signed by her as and when occasion arises :
i. Covering letter to be given to bank along with the death certificate leaving only the date of death blank.
ii. Form 14, i.e.,. Application for grant of family pension duly filling in all the columns except the date of death.
Tell her that these documents should be given to the bank duly obtaining acknowledgement.
At this hour of distress, she will thank you in her heart of hearts, how much you cared for her.
7. Family Pension to the Unmarried/Widowed/Divorced daughter
God forbid such situation should not arise. Pension rules have been liberalized to provide social security to the members of the family. Many pensioners (including some in service) are not aware that the unmarried/widowed/divorced daughter and parents are eligible for family pension after the death of the family pensioner in Category 1. (Please see relevant orders issued recently). Therefore, when you are live, you make out a case, write to the competent authority and obtain a letter of sanction. Make out copies along with Form 14 and instruct your unmarried/widow/divorced daughter, if any, to be acted upon when occasion arises. Tell her that nobody would advice and help her when a situation arises.
8. Nomination
In the absence of valid nomination, legal heir certificate may have to be produced to withdraw amounts from the bank etc. Obtaining legal heir certificate involves effort, time and money. Therefore, when you re alive, make sure that nominations have been given for all your bank accounts, term deposits, Post Office SB, RD, MIS, SCSS, NSCs etc. Bank/Post Office may not record the name of nominee as furnished to the bank/PO in the document and tell your wife/children that so and so is nominated for different investments, as it need not be a secret at that age.
9. Family Contingency Fund
Create a contingency fund of say Rs.5,000/- or 10,000/- from out of your savings and keep it safely in hard cash in the house. Tell her that the amount may be utilized under emergency circumstances on a Saturday/Sunday or a Public holiday when banks are not functioning or till payment of the family pension is commenced.
10. Recording signature
Giving illustrations of fraud, tell her emphatically, repeatedly and impressively that she should not sign any document, cheque or any other paper without taking a second opinion, and not to sign on a blank paper under any circumstances. You must be dinning this instruction into her ears frequently.
11. The Will
Take her into confidence and explain the contents of the WILL executed by you. At the advanced stage of your life, nothing should be secret, at least in so far as your wife is concerned, discuss with her putting forth your ideas, desires etc., and write the WILL, if no WILL was executed till then. If any changes become necessary at a later date, in view of the developments in the family, after execution of the WILL, make out a CODICIL. Speak out your desires and opinions frankly and openly to her. Explain how she should proceed in dealing with your hard money property and in implementing your desires.
M. Narayana Murthy
Retd. Sr.Audit Officer
Always take a small fridge magnet on your holiday, they come in handy at the end of it. Never even thought about key cards containing anything other than an access code for the room ?
Ever wonder what is on your magnetic Hotel room key card?
Answer:
a. Customer's name
b. Customer's partial home address
c. Hotel room number
d. Check-in date and out dates
e. Customer's credit card number and expiration date!
When you hand them back to the front desk your personal information is there for any employee to access by simply scanning the card in the hotel scanner. An employee can take a hand full of cards home and using a scanning device, access the information onto a laptop computer and go shopping at your expense.
Simply put, hotels don't erase the information on these cards until an employee reissues the card to the next hotel guest. At that time, the new guest's information is electronically 'overwritten' on the card and the previous guest's information is thus erased. But until the card is rewritten for the next guest, it usually is kept in a drawer at the front desk with YOUR INFORMATION ON IT!
The bottom line: Keep the cards, take them home with you, or destroy them. NEVER leave them behind in the room or room wastebasket, and NEVER turn them into the front desk when you check out of a room.
For the same reason, if you arrive at the airport and discover you still have the card key in your pocket, do not toss it in an airport trash basket. Take it home and destroy it by cutting it up, especially through the electronic information strip!
OR,
If you have a small magnet, pass it across the magnetic strip several times. Then try it in the door, it will not work. It erases everything on the card.
Information courtesy of: Metropolitan Police, London.
PLEASE FORWARD to all those friends & family who travel.
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