Q3. How to plan wealth transfer to the next generation?

Most of us share the same primary goal in our financial lives: to build wealth. However, have we ever considered what will happen to this wealth if we are not around to ensure it goes to our loved ones?
Estate planning, in simple terms, refers to the passing down of assets from one generation to another.
Most of us are under the impression that estate planning is only for the very wealthy. But the fact is that estate planning is essential for all, regardless of the size of their portfolio. And it should be done from the very first day we have an asset to bequeath (for example, our first investment in a mutual fund). This prevents the addition of financial and legal grief to the emotional grief your loved ones will already be facing upon your absence.
Here are some advantages of Estate Planning:

• You can decide who receives a share of your assets
• You can choose how and when your beneficiaries will receive their inheritance
• You can decide who will manage your estate in your absence
• Estate planning saves your family and loved ones from going through the additional burden of reverting to the law to distribute the assets to the legal heirs in case of an intestate (dying without a legal will) demise.

Some things must be kept in mind while writing a will:

• A Will should be Simple, Precise, and Clear. Otherwise, there may be problems for the legal heirs. It is always advisable to seek the advice of a trusted professional when drafting your will.
• A Will must always be dated. If more than one Will is made, then the one having the latest date will nullify all other Wills.
• It is better to make a Will at a younger age. As and when events or changes in the family necessitate changes, the Will can be changed.
• A Will can be handwritten or typed out. No stamp paper is necessary. You can write a Will on a simple A4 piece of paper, sign and date it with witnesses, and keep it in a secure place.
• Each page of the Will should be serially numbered and signed by the Testator and the Witnesses. This is to prevent the Will being substituted, replaced, or pages being inserted by people intending to commit fraud. At the end of the Will, you (the Testator) should indicate the total number of pages in the Will. Corrections, if any, should be countersigned.
• If there are too many changes in the Will, it is better to prepare an entirely new Will rather than make modifications to an old Will.
• It is not compulsory to register a Will with the Registering Authority; however, if any property or asset is given to a charitable organization, registration should be done.
• A Will becomes operative only after the demise of the person making the Will, i.e., the Testator. There is no restriction on the way you can deal with any assets, even after making a Will.

Remember, this is one of the most important documents you will ever create – detailing the distribution of the wealth you have worked so hard to build – to your loved ones. It is vital to ensure that it is done correctly –take qualified professional assistance as required, as with all your financial planning decisions.

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