Inheritance: How to draft up a will that cannot be easily challenged

Many people tend to overlook the importance of a will in financial planning, considering it the least prioritized document.

Any individual can draft a will that outlines how they would like their assets to be distributed after their deaths. Having a will can simplify the inheritance process for family members of the deceased and spares them from lengthy and costlier legal procedures.

Where a will exists, an appointed executor oversees the asset distribution, making the process smoother. Nowadays, digital will services are available, which make writing and saving a will much easier, unless there are complexities like cross-border transfers or family businesses.

Yet, there are certain guidelines for drafting a will that many people are not aware of. Rishabh Shroff, co-partner and head-private client at Cyril Amarchand Mangaldas, addresses some of the frequently asked questions (FAQs) on succession planning in an interview with Mint.

What are the most basic requirements of drawing up a will?

As per the Indian succession law, the fundamental requirement is to have a will that is signed and witnessed by two individuals who are present when the testator or testatrix signs it. Apart from this, there are no other specific legal formalities for creating a will. Additionally, there is no strict requirement regarding the format in which the will should be written. It is completely open to you to craft your will as you may choose to do.

What is the purpose of registering a will?

Registered wills are not very common in practice, accounting for a handful of cases compared to unregistered wills. Registration serves only to authenticate the signatures of the individuals who sign the will and is used to ensure a will is a genuine one, and not forged or fake. It does not provide any comment on the contents of the will. From a practical or legal perspective, registration is not mandatory but it can give absolute certainty that the will was made by a person of sound mind and eliminates the possibility of future challenges to its authenticity.

Should an executor’s name be mentioned in the will?

An executor is an individual appointed by the person creating a will (referred to as the testator) to carry out the instructions and wishes stated in the will after their death.

It is highly recommended to include the name of the executor in your will. This individual can be your surviving spouse, eldest child, youngest child, best friend, or anyone you choose.

Are there any rules that an executor cannot be a witness?

It is advisable to maintain separation between the various parties involved. By having a doctor certify your sound mind and body on the day you sign the will, and the physician acting as a witness, a major challenge to will can be mitigated. The second witness can be a lawyer. They can act as an independent set of witnesses.

Is it necessary to mention the current value of assets in the will?

No, it is not required as the value of assets tends to fluctuate over time. However, it is advisable to provide an itemized list of your when the will is made. assets as of the date when the will is made.

The valuation of during the probate process, which varies depending on the court where the filling takes place.

What succession law would be applicable in the case of interfaith marriages?

In the event of interfaith marriages, such as a union between a Hindu and a Muslim, the applicable succession law in India would be the Indian Succession Act.

Can we revoke or amend the will?

This situation is actually quite common. People may create a will at a certain point in their lives when their family is young or small, and it serves their needs at that time. However, as circumstances change with major life events, the family often chooses to either create a new will to replace the old one or make an amendment known as a codicil.

A codicil allows for specific clauses in the existing will to be modified, such as changing the beneficiary of a property. There is no definitive regarding how often it should be done. The key is to revisit and update the will whenever significant life events occur or when changes to the estate are made.

Are there any special rules applicable if legal heirs are NRIs?

If the legal heirs are non-resident Indians (NRIs), specific rules come into play under the Indian Foreign Exchange Management Act (FEMA) 1999. FEMA imposes certain limitations on the transfer of assets, including restrictions on the amount of cash that can be taken out of India and regulations governing the transfer of shares (in any business) between NRIS and residents. So, these rules have to be complied with during the succession.

Can someone abroad prepare a will for his/her Indian properties?

Indeed, it is quite common. When individuals reside in countries such as the US or UK, they often possess two categories of assets. Firstly, they may have assets located in the country they reside in, including a local bank account, properties, and more. Secondly, they may possess assets in India, which could consist of self-acquired assets or inherited assets from their extended family. In such cases, it is advisable for individuals to prepare two separate wills. One will pertain to their global assets outside of India, while the other will specifically address their Indian assets. These two wills operate concurrently. The Indian will must comply with Indian laws.

Can a registered will be challenged too?

Absolutely possible, a registered will can still be subject to challenges. In fact, this is a common aspect of many disputes in India. However, the advantage of a registered will lies in the fact that its authenticity is not called into question. Whilst registration does not prevent challenges, it does help to mitigate challenges.

At what point does establishing a private trust become cost-effective?

We commonly observe that a trust is used among business families when the assets include not only liquid wealth, residential properties, and real estate assets, but also an operating family business and other significant assets. Setting up trust during the person’s lifetime ensures transfer in a cost-effective manner. In addition to a will for assets like immoveable property, a trust would be highly advisable for their business assets such as shares in their family business. The structure also offers a certain level of protection against bankruptcy and creditors at the time of implementation. If you gift a property in your name to a trust, there would be a requirement to pay stamp duty depending on the property location.

What is a probate and when is it mandatory?

A probate is a copy of will that is certified under the seal of a court of competent jurisdiction. This helps the executor to distribute the estate as mentioned in the will.

As per the Indian Succession Act and the Hindu Succession Act, a probate is required for wills signed in Mumbai, Chennai, and Kolkata, as well as for assets located in these places. Additionally, depending on specific circumstances, other state laws may come into effect and may specify how a voluntary probate can be filed, e.g. in Delhi. In practice, it is generally advisable to obtain a probate, especially when dealing with real estate properties that have been inherited through succession. Having probate provides certainty of titles and is particularly important for high-value assets such as flats, apartments, agri-properties.

Can a housing society demand a probate order?

When it comes to transferring the ownership of a society flat to a legal heir such as a spouse or children, it is common for housing societies to request a probate order issued by the court. This requirement varies from society to society but is particularly prevalent in Mumbai.

What are the points to note when writing a digital will?

Nikhil Varghese: For the will to be legally valid in India, it has to be printed on a plain paper and requires the signature of the testator along with at least two witnesses is mandatory. Digital signature is not valid for wills currently in India, currently. Before initiating the online will-making process, gather all the necessary information, including identification proof and address proof. Choose a reliable online will provider who can facilitate review and edit the will periodically.

(Nikhil Varghese is co-founder of Yellow, a digital will & estate planning app.)

Courtesy: Satya Sontanam, Mint Publication