succession planning family settlement wills

7/29/2019 Succession Planning Family Settlement Wills

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Welcome to a Special Power Packed Seminar on

SUCCESSION PLANNING,

,

ANDTHE INCOME-TAX LAW

By

SUBHASH LAKHOTIA

TAX & INVESTMENT CONSULTANTTAX GURU: CNBC Awaaz


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For the First Time in IndiaSpecial power packed seminar on :

uccess on ann ng,Family Settlement,

s anThe Income-tax Law

By

SUBHASH LAKHOTIAHere comes to you a practical seminar dealing with practical aspects connected with

Succession Planning, Family Settlements and Wills with special reference to Tax Planning in the contextof the Income-tax & Wealth- tax provisions.

The seminar discusses various facets of tax planning benefits through Wills and explains step , , .

The Seminar would also discuss various aspects connected with Succession Planning indifferent situations as also the role of Family Settlement in planning family matters and the taxes of yourgroup.

Lakhotia College of Taxation & Management- , rea er a as ar - , ew e -

Phone : 011-29215434, 29215420, 29217768, 9810001665

E-mail : [email protected]; [email protected].


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KNOW THE SEMINARFACULTY

Subhash Lakhotia

Mr. Subhash Lakhotia is the Director of R.N. Lakhotia & Associates LLP. He isan Income-tax Practitioner for the last over 40 years. He regularly writes invar ous na ona a es. e s e rec or o a o a o ege o axa on

Management. He is practising as a consultant on tax planning, taxdocumentation and investment planning. He has also addressed a number ofseminars and lecture meetings on taxation and tax planning and is conducting

. He was selected as the best youth of India by the Lions International to

represent India at the World Youth Congress held at Atlantic City, USA in 1970.

He is Secretary General of Investors Club and President of Spiritual ClubInternational and Unite to Invest UTI . He is Chief Strate ist of Real EstateStrategy Group and is actively associated with various professional bodiesconnected with real estate. He has written books on Income-tax, Investment,Real Estate and Spirituality. He is actively associated with Lions ClubsInternational. He has been awarded the Sahityashree award and The

, .Business School. Mr. Subhash Lakhotia is conducting a very popular show Tax Guru on

every Wednesday, Saturday and Sunday on CNBC AWAAZ a popular TV.

aired on the TV Channel. The National Television Awards, 2010 for Best

Business Talk Show of the Year has been awarded to the Tax Guruprogramme.


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1(1) Intestate Succession Versus

es amen ary uccess onTwo uccession modes :-

. n es a e uccess on

- As er Cha ter II of The HinduSuccession Act. 1956.

. es amen ary uccess on- As er Will of a erson


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General Rules of Succession in the case of Male Hindus

e property o a ma e n u yng ntestate s adevolve according to the provisions of HinduSuccession Act as under :-

(a) Firstly, upon the heirs, being the relatives specified

in class I of the Schedule;, ,heirs, being the relatives specified in class II of theSchedule;

(c) Thirdly, if there is no heir of any of the two classes,then upon the agnates of the deceased; and

, ,of the deceased.


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1 3 Intestate Succession contd..General Rules of Succession in the case of Female

Hindus :The property of a Female Hindu dying intestate shall

Under :-

,children of any pre-deceased son or daughter) andthe husband;

(b) Secondly, upon the heirs of the husband;(c) Thirdly, upon the mother and father;

(d) Fourthly, upon the heirs of the father; and

(e) Lastly, upon the heirs of the mother.


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1(4) Intestate Succession contd..HEIRS IN CLASS I AND CLASS IICLASS ISon; daughter; widow; mother; son of a pre-deceased son; daughter of a pre-

deceased son; son of a predeceased daughter; daughter of a pre-deceaseddaughter; widow of a pre-deceased son; son of a predeceased son of a pre-deceased son; daughter of a pre-deceased son of a pre-deceased son; widow of a

- - .CLASS II

I. Father.II. (1) Sons daughters son, (2) sons daughters daughter, (3) brother, (4) sister.

III. (1) Daughters sons son, (2) daughters sons daughter, (3) daughters son,(4) daughters daughters daughter.

IV. (1) Brothers son, (2) sisters son, (3) brothers daughter, (4) sisters daughter. . .

VI.. Fathers widow; brothers widow.VII. Fathers brother; fathers sister.VIII. Mothers father; mothers mother.

. o er s ro er; mo er s s s er.Explanation : In this Schedule, references to a brother or sister do not includereferences to a brother or sister by uterine blood


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Do remember the areas where Succession

Planning is needed :-

1. Succession of your Wealth.

2. Succession of Charitable Pro ects and activitiesundertaken by you.

3. Succession to your Social Activities.

4. Succession to your Ideals and Mission of Life.

5. Succession to our unfulfilled tasks in life.

6. Succession to family obligations.


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1 6 Succession Plannin contd..

-

1. To be achieved throughsuccessful preparation of the Will

. .

3. Fair and Judicious distribution ofyour Wealth amongst legal heirs.


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1 7 Succession Plannin contd..Succession of Charitable Projects and activities

undertaken by you.1. It is time to implant a successor in your place in

activities

.and societies with which you are attached.

3. Start giving more powers and responsibilities to your

successor Trustees.4. Start grooming a successor right now.

5. J udge the successor by application of aptitude test.


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1 8 Succession Plannin contd..Succession to our social Activities

1. Prepare a list of social

with..

list of persons who can be

social activities.. room suc successors n

advance.


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Succession to our Ideas and Mission of Life :

1. You wanted to bring certain Ideas/ideals to be part ofMission of your life. Now is the time to tell all about.

2. Discuss your action plan with the successors for

carrying forward your Ideas, your ideals and yourss on o e.

3. Advance grooming of the successor to your ideasand ideals specially towards your Mission of Life.

4. Prepare a Chart of your Policies for family like theCharter of a Chamber of Commerce, Business

, ,photo and signature and display it in your DrawingRoom.


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1 10 Succession Plannin contd..Succession to our unfulfilled tasks in Life :-

1. Prepare a list of your unfulfilled agenda of MoneyMatters and Non-Money Matters.

2. Groom the successor.

3. Ex lain b Share and Care to the successor todo all that remains to be fulfilled by you.

4. Do remember that your Successor is going to

inherit all that you posses, why not then heshould also become a party to execute yourun u e c er s e m ss ons w e er one ary

or Non-monetary.


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-

1. Prepare a chart of your ongoing yearly and otherperiodical family obligations and rituals. Explain

em w mone ary mp ca on o e successor.2. Explain the concept to the successor Rights

your fortune he should also be a party to your Family Obligations both Financial & Non-

.3. A Family cash Obligation Chart for various

ceremonial obligations should be prepared withgu e nes or u ure n a on a us men o ma e

life easy and smooth for the successor.


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1 12 Succession Plannin contd..-

1. Keep ready the char of placement of variousdocuments, etc. for the Successor.

2. Keep handy the copy of the Will, the original

Will, etc.. eep an y e roper y papers o e an eover to the Successor.

- with small little details of all your investments, original papers re ; the

,

mobile number of the concerned person etc.


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1(13) Succession Planning of

us ness1. Think and lan and lan and think how ou could

like your business empire to be succeeded.2. For lon -term ers ective better distribute the

different businesses to different family members

for that think ri ht now about E uit Divisionin the name of a particular family member who

will succeed to a particular business. Remove

the equity of other equity holders.

3. Think of the balancin formula for distribution of

business amongst more than one legal heir.


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1(14) Succession Planning of Businesson ..

4. If interested to retain business within the family

then put conditions for Business Buy Sell at alatter date and the terms. Invoke the concept of .

5. It is time now to stat grooming the successor well

in advance. Give more res onsibilit with owersso that you can judge the capability of thesuccessors.

. successors are no very compe en o carryforward the business then it may be worthwhile tosell and dis ose off the business durin our lifetime. Concept very popular in USA.


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1(15) Succession Planning of Business

on ..

7. Succession Plannin of a business in s ecial

circumstances and situations e.g.,(a) Only Daughters in family.

(b) Only Daughters with instable family life.

c Onl Dau hter who is a widow.(d) Only Daughter with disciplined / indisciplined

children.

(e) Only Daughter with a spend thrift and drunkardlife partner.

(f) Only Mentally Retarded child or a Handicappedchild.


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ontd..8. Succession Planning of Business with

multiple branches in India and abroad :-

(a) Business can be divided amongst legal heirs and

branches, units, factories etc in differentheirs.

(b) Better to create right separate Tax entities

,so that succession of business is smooth.c To think of closin down little less rofitable

branches and units with the aim of consolidating

for effective management.


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on ..

9. Succession Planning of Registered Trade

Marks, Secret Formulas, Logos etc., etc.(a) Let free use be made available to all legal heirssu ec o cer a n norms e err orydemarcation etc..

(b) Let Trade Mark be owned by a separate entityand a s ecific condition that onl le al heirs

the blood relatives alone would be entitled to bethe Shareholder/Partner of such tax entity.

(c) Pay and use Trade Mark based on Turnover.


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ontd..

10. As far as possible clear cut demarcation of

business activities amongst son and daughter. Trynot to make them joint owners of a business or ,

decade later.

.Shareholding and appointment of Directors etc., inthe process of Succession Planning.

12. Never let go your control right now in Businessby share transfer etc., or else shatteredsuccess on p ann ng. ust peep nto t e rea e

business instances to shock you.


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ontd..

14. Start roomin in advance.

15. Start judging the aptitude of the legal.

16. Continue on regular intervals theevaluation of successors.

. your business from amongst

successors or e se s ar n ng

about the substitute for the same.


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Contd..

.

plan or not to plan depending upon-

(a) The Capacity of handling business by wife.

e nc na on o w e o run us ness.

(c) The control by wife on the emotions front.

(d) The Capacity of handling finance andinvestment related business decisions

(e) The strong task master or otherwise.


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ontd..

19. Watch the size of the famil

of the successor and other .

. me o o n our n rospec onCam for our clear cut road

map to Succession Planning of.


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ro ess onAll professional persons to Carefully craft the

roa map o success u uccess onPlanning of the Profession by considering :-

Succession.

forward the Profession.

(c) If family member not found suitable for

success on o your ro ess on en n oalternatives including taking of a new.

(d) Time to follow the American concept ofsuccession of Profession.


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..Close your Eyes .

(A)Yes, for your own Bliss and Happiness closeyour eyes to what the successor would do :

Would the successor waste the money? Would he really

implement your desires; would he take care of your

emotions and sentiments.

(B) Just do your duty to groom the successor, think not of

how much of what you wanted would be achieved as per

Krishnas message in Gita.

(C) Just surrender to God and relax.


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eneral Princi les

1. In case the Family arrangement /settlement is reduced in writing as a

formal record of the arrangement asper the Registration Act the same

2. In case the Family Settlement order bye our en ere s no separa e

Registration required.


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2 2 F mil l m n n

Family Settlement :In case a Family Settlement or a Family

continuous family friction and to maintain

there would be no Transfer in terms of

ap a a ns, ence no ax a y as per

section 47 of the Income-tax Act, 1961


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2 F mil l m n n ..The essentials of Family Arrangement as per the

Supreme Court of India :-

1. The Family Settlement must be bonafide one so

a fair and equitable division or allotment of

ro erties between the various members of thefamily.

2. That the said Settlement must be Voluntary and

s ou no e n uce y rau , coerc on or undue influence.

.SC 807


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2 4 F mil l m n n ..Important Court Decision

Consequent to family dispute assessee was toreceive certain sum of money and certain landsand in return he was to Transfer half shareholdinin certain companies. Assessee claimed that theagreements were in pursuance of Family

Arran ement and hence the Ca ital Gains fromthese transactions could not be assessed toCapital Gains Tax. The Income-tax Officer was ofthe view that the Transaction amounted to transfer

o e n respec o w c ap a a n wasexigible to tax. Finally the High Court came to theconclusion that the Family Arrangement involvedn e a ove case no amoun o rans er

v. Ramanathan 245 ITR 494


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2 F mil l m n n ..Important Court Decision

Though conflict of legal claims is generally a condition for

the validity of a Family Arrangement, it is not necessarily so.

, ,

involve legal claims will suffice. Members of a joint Hindu

Family to maintain peace or to bring harmony in the family,enter into such a family arrangement. If such an arrangement

is entered into bonafide and the terms thereof are fair in the

,

give assent to such an arrangement then to avoid it.

-Supreme Court of India in the case of Maturi Pullaiah v.

Maturi Narasimhan AIR 1966 SC 1836.


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The Family arrangement brought about byn erven on o anc aya ars. e

assessee found it worthwhile to settle thespu e e ween erse , er sons andaughters by making the family arrangement,

e sa am y arrangemen cou no eignored by a tax authority and there was norans er o roper y was nvo ve .

- CIT v. R. Ponnammal 164 ITR 706


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The consideration for a Family Settlement is

result in establishing or ensuring amity and

transfer does not amount to a

.-Supreme Court of India in Ram Charan Dasv. r a an n ev

SC 323.


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2 F mil l m n n ..Im ortant Court Decision

The amount received by the assessee on Transfer of

at the price determined by the Arbitrator would not

the Income-tax Act as it did not amount to a

.

- Mrs. P. Sheela v. ITO 308 ITR (AT) 350


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Im ortant Court Decision

It is a settled law that when parties enter into a familyarrangement, the validity of the family arrangement is not toe u ge w re erence o w e er e par es w o ra se

disputes or rights or claimed rights in certain properties had

in Law any such right or not.Rearranging shareholding of assessees to avoid

possible litigation amongst themselves for necessity tocontrol com anies effectivel b ma or shareholders to

produce better prospects and active supervision hence sucha family arrangement could not be transaction, which was

-CIT v. Kay Arr Enterprises & Others 299 ITR 348.


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A will is an ex- arte document and is written from

one point of view; it is the expression of the wishesof the testator regarding the work of a lifetime; upon

its legality depends the future happiness and

welfare of the persons and objects most dear to thees a or; an w e er v ewe rom a proper y or a

family standpoint, it is often the most important

called to make. - The Internet definition


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of intention of a Testator withrespect to his Property which he

after his death.

-Section 2 (h) of the Indian

Succession Act, 1925


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3 3 Will The Definition Contd.In Del Grande v. Sebastien(1999) 27 ETR 2d 295, theOntario Court endorsed this definition :-

A will is a document which is of no effect until the

of his intention and is at all times until such death

sub ect to revocation or variation. The execution ofa will leaves the testator free during his life todispose of his property as he pleases and operates

the other hand, a person named as a beneficiary in awill takes no interest whatever under it until thedeath of the testator and he will not then take any

interest unless he is alive at that time.


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,

3rd edition :-

A will is an instrument in or by

legally and intentionally directs the

disposition of his or her property, to

death of the person.


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3 5 Will The Definition Contd.The Uniform Probate Code of USA defines Will as under :-

mus e n wr ng, s gne y e es a or or n e

testators name by some other individual in the testatorsconscious presence and by the testators direction, and,

within a reasonable time after having witnessed either thesigning of the will or the testators acknowledgement of

that si nature or acknowled ment of the will.A will that does not comply with (the above) is valid as aholographic will, whether or not witnessed, if the signatureand material ortions of the document are in the testators

handwriting.Intent that the document constitute the testators will may beestablished by extrinsic evidence, including, for holographicwills, portions of the document that are not in the testatorshandwriting.


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3 6 Will The Definition Contd.

Definition of Will as per Virgil-

In short, a will may be a mans monument or his. , ,

testator plan wisely, and frame his testamentary

provisions with great care.That is, he should, ifposs e, use suc wor s a s p an s a nobe misunderstood and shall be carried into effectwithout dis ute or liti ation for unlike

instruments between living persons, it is onlyafter the testator is dead and cannot explain his,

to dispute.


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3 7 Will The Definition Contd.The Holograph Will-A will written entirely in the Testators Handwritingand not Witnessed. In USA some states recognizethis Will. In India non witnessed will not reco nised.The Mystic Will

- A sealed and secret will requiring strict formalities.ven rom nesses e con en s o e arekept hidden.The Unnatural Will

- Will which differs from what might been otherwiseexpected of a Testator like large gift to a stranger, or

.Unnatural Wills are not illegal.


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3 8 Will The Unnatural Will

In the Estate of Lacey case, the Supreme Court of Oklahoma held :-The will of the testator was an unnatural will. He left the bulk of his estateto one child, Agnes Mielke, to the exclusion of his seven other children.

While not conclusive, and unnatural disposition of property by thetestator may be considered in determining his testamentary capacity.The fact that the will is un ust or unnatural does not of itself establishtestamentary incapacity, but it is a circumstance which may beconsidered in connection with other evidence, and which may haveweight in determining the capacity of the testator; and an unnatural orun ust dis osition cou led with other evidence indicatin inca acit ma

justify a verdict against the will.It is natural for a person to make provisions in his will for those who wereparticularly close and helpful to him during his lifetime, and more

, . ,

member of the family has completely devoted his efforts and energies tothe care and attention of a testator, it is only natural that this one bepreferred in the will. But in the instant case the record does not show

,bulk of his estate to his daughter, Agnes Mielke, and to disinherit hisother children.


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3 9 Will The Unnatural Will Contd.The writing of an unusual will is not per se invalidun ess c rcums ances s ows a e es a or s

disinheriting one of his sons or daughters is due tothe undue influence exercised on him by his pet sonor daughter.In the case of Smt. Sushila Devi v. Pandit Krishna

bequeather his property to only one of his twodaughters. The attesting witness advised him to

.Testator silenced him by saying No, I wont, giveher property. I have already given some money. I

, .evidence the Supreme Court held that there wasnothing unnatural and the Will was valid.


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3 10 Some S ecial Will Be uestsReal estate mogul leaves dog $ 12 m

ew or : eona e ms ey s og w con nue o ve an

opulent life, and then be buried alogside her in a mausoleum.But two of Helmsleys grandchildren got nothing from the late .

Helmsley left her beloved white Maltese, name Trouble, a $ 12million trust fund, according to her, which was made public in

. ,Rosenthal, who was named to care for Trouble in her absence, as well as two of four grandchildren from her lateson Ja Panzier so lon as the visit their fathers rave

site once each calendar year.Otherwise , he wrote, neither would get a penny of the $ 5million she left for each. Helmsley left nothing to two of JayPanzirers other children Craig and Meegan Panziere forreasons that are known to them, she wrote.- Financial Express Dated 30-8-2007

3(11) Some Special Will Bequests


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on .1.A leadin Advocate in Rome in his Will

wrote that any person who laughsmaximum at his Death should be appointedthe Chairman of his Assets and those whoweep should be paid nothing.

2. Wilson from Texas engraved the contentsof Will on his back.

. ea ng urn ture ea er n on on notlike moustache and beard and so in his Will

who were without moustache and beard.



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on .4. Anderson loved his Cats. He had in all 17 Cats.

After his death, his Will was read out. The 17Cats were each paid US$ 600000. His total assets

.of all relatives. His son Alice died due to shock as

he did not receive even a sin le enn .5. Madam Kalara of France donated all her assets to

someone who returns from space.

6. Fedrik Richard of Finland wrote all his assets inthe will in the name of a ghost. After a long time

ost not turn up so t e overnment got

hold of his entire estate.



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on .7. A leadin businessman of Scotland distributed his

assets amongst his children on the basis of theirweight.

8. Italy's Vetinary Doctor Baromareio had 135 sheep.

He loved them so much that half of his assets were

g ven away or e ene o eeps.

9. Valdekar a Photographer from Denmark gave away

.

10. James Moore of Australia died on 23rd July, 1988. Asper his desire all his assets were given away for theWelfare of Kangaroo.



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on .11. One London based Craftsman killed a

snail with his motor cycle. He felt verysorry. He gave away all his assets for thewelfare of snails.

12. A heavy drunkered man in Yugoslavia inhis will wrote that after his demiseeveryday his coffin be washed with wine

drunkers of the town be served wine as.



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.13. Jacquies Chickad from Switzerland, an

engineer by profession gave away hisentire assets to an Animal Hospital.

.a Will to give away all his assets for the

.

15. Now, what is your action plan Well, as you

like it.

3(16) TAX PLANNING BENEFITS


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3(16) TAX PLANNING BENEFITS

1. Tax Plannin vs. Tax Evasion

& Tax Avoidance.2. Tax Planning of Will for

max mum ax ene s or

, ,

3 (17) Easy Distribution of ones


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3 (17) Easy Distribution of one s

w v v x.

1. Desired distribution of wealth byWill is possible.

2. New tax entities can be created by

Will.3. Gift to spouse and daughter-in-law & no section 64 clubbing

through Will.4. Charitable trust via Will.

3(3(18) IT FILE of a Dead Person can be


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.

1. Section 168 : Will & executor of a Will for the estate

2. Separate assessment of execu or o apar romones personal assessment

3. Rate of tax, etc. like the testator.



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(( )

.4. In calculating the total income the Executor isentitled to deduct an s ecific le ac distributedor applied for the benefit of a specific legatee.However, the legacy amount shall be included in

168(4)].

until and unless the estate is completelyadministered. Therefore, the assessment of the

un s r u e por on o e ncome o e es a eof the deceased would be on the executor as pers.168 of the I.T.Act Gobindlal Ban ur v. ITO 79ITR 364



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con nue .

.

beneficiary, it does not necessarilyo ow a e rece ves e ncome n

latter Capacity. The executor retains hisdual Capacity and hence he must beassessed as an Executor

- CIT v. Bakshi Sampuran Singh



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.7. No deduction of ex enses on

obtaining probate of Will. Likwise, no

in pursuance of the obligation imposed

estate coming to their hands.

- V. Ramaswamy Ayyangar v. CIT 11

- P.C. Mallick v. CIT 6 ITR 206



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con nue .

.

beneficiaries mentioned in the Will from out

directions mentioned by the Testator

Executors chargeable income of the estate

and not diversion by an overriding title of

- Re. P.C. Mallick & D.C. Aich 8 ITR 236

3 23 N dditi f Gift th h Will


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3 23 No addition for Gifts throu h Wills

Rs.50,000 in a year from Non Relatives

of the Income-tax Act, 1961 but allGifts both movable and immovable

a Willor by Inheritance is not taxed as.


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-a licable on ifts throu h

Will to Spouse and

aug ter n aw.

3(25) Discretionary Trust


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( ) y

roug .

1. One separate I.T. entity & file is possible through

Will as per section 164 for the discretionary trust.

.AOP / individual : exception to section 164 (1)

3. Conditions of section 164.

4. CBDT Circular No. 577 dated 14.9.90 for no maximum rate.

. . . . .

(Gawhati H.C.). Also see CIT v. Brig. Kapil Mohan (2001) 252 ITR 830(Delhi HC)

2 N H F Th h WILL


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2 N w H F Thr h WILL

.

Will is possible.Will is possible... . . . . . . .. . . . . . .

(SC)(SC) Intention of maker/authorIntention of maker/author

of Will is important.of Will is important.

3.3. Several tax advantages of a newSeveral tax advantages of a new

HUF fileHUF file-- separate exemption,separate exemption,sections 80L &sections 80L & 88 benefits.88 benefits.

2 N H F Thr h WILL


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2 N w H F Thr h WILL

1. Transfer to a new HUF throughTransfer to a new HUF throughWill is ossible.Will is ossible.2.2. M.P.P. Chettier v. C.I.T. 99 ITR 1M.P.P. Chettier v. C.I.T. 99 ITR 1

SCSC Intention of maker/authorIntention of maker/authorof Will is important.of Will is important.

3.3. Several tax advanta es of a newSeveral tax advanta es of a new

HUF fileHUF file-- separate exemption,separate exemption,

sections 80L &sections 80L & 88 benefits.88 benefits.

3(27) WILLS - WHEN, WHY, WHERE AND HOWTO DO IT


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TO DO IT

When to do the WILL

(1) Get ready with your Will, generally if you are.

(2) If you are critically ill or suffering from any

serious illness, it is time to do your Will

irrespective of your age.

(3) If you are going to have a major surgery it istime to do the Will.

3(28) When to do the Will-


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( )

con .4 If ou are in the rocess of

developing marital problems with

(5) If you are expecting a threat to

(business rivalry, bitterness of

.

(6) If you are going to a foreign land

or service).

3 (29) Why the WILL ?


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(1) To express in words your emotions to be

translated into money only through the

preparation of the Will.

(2) To provide a financial safety net to your

wife as well as to weak and financially not

so strong relatives.

(3) To translate into action your financial

rights in favour of exclusively those whomyou like.

o con nue prov ng ree om o

residence to wife through life interest.

3 30 Wh the WILL- contd


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3 30 Wh the WILL- contd.

(5) To enjoy the full financial freedom to

put your all movable and immovable

assets in favour of all those whom

you es re o g ve n e ra o you

desire.

from all your assets.

(7) To confer the monetary benefit even

to those persons who are not yourrelatives.

(8) To sell a property on Power of Attorney.

3(31) Yours first lesson in the


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prepara on o your .1 Will is on a lain white a er.

(2) Will can be Typed or Handwritten.can e wr en n any anguage.

(4) It is not necessary that the person

preparing the Will must himself write

can be written by any person and

signed by the Executor.

3(32) Your first lesson in thepreparation of your Will - contd.


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preparation of your Will contd.

(5) The Will may be Registered or

Unregistered but the legal effect.

(6) If is always better to Register

the Will.

(7) Will can be Registered in any

part of India and not necessarily.

3(33) Your first lesson in


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prepara on o your .8 You can even notarize the Will b a

Notary Public- a cheaper solution for

Registration.

ou can c ange you as many

times as you like. The new WILL

supersedes the old WILL. Do write

latest WILL.

3(34) What should the WILL


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con a n1. Preliminary details about the person

preparing the Will, namely Name, Age,

reli ion caste Profession

and address

2.The name and address of theExecutor or Executors or Executrix

3. Broad list of Movable and

writing of the Will.

3(35) What should the Will


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con a n4. Distribution lan of Movable &

Immovable Assets- item- wise or

on ercenta e basis.

5. General clause about distribution of the

mentioned.

. , ,

Gift- tax and other liabilities.

.

of two witnesses.

3(36) Practical display of Wisdom


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n s.1. Dont over a reciate some one.

2. Dont add superlatives and adjectives in.

3. Do write in the Will the Asset distribution

execution of Will.

. e s r g t o es ence to sa eguar with clear cut guidelines.


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1. It is ossible to refix conditions in the Will asper your desire.

2. The Husband can ut conditions on

Daughter-In-Laws behavior to achieve

.3. Conditions for Gifts to staff, servants, workers.

.

otherwise particularly for matters relating to Re-marria e etc.

5. Illegal conditions should not be part of the Will.


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1. Yes it is ossible to Re ister a oint Willby Husband & Wife.

. .

3. Please mention clear cut details of

.4. Clear cut division of Assets.

5. Also do write Asset distribution plan if thespouse were to pre-decease.


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comply with procedure for Probate of your Will.

o ro a e orma es o e

Certain other states of India.

3(40) Let Will safeguard


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your r mary ouse

uidelines in the Will

relatin to TITLE

preservation.

3(41) Reverse Mortgage


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e

ro ert he can still asson the Property to a legal

heir with the bundle of everse ortgage.

3(42) Disinheritance


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oss e roug

to the le al heirs the eneraltheme.

However, through Will, one can

Disinheritance amongst all or aparticular group of legal heirs.

3(43) One Million Dollar advice on


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that it is our last Will and thatany new Will prepared byyou will be recognised only i

.

-

fabricated Will.

3(44) A to Z procedure about


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Registration o the WILL.1. Get the Will t ed or hand written on a lain

paper.

2. Please sign on each and every page of theWill. Also the Thumb impression to be affixedon the Will.

.last page.

-

Registration 2 copies of the Will are required.The Registrar would keep one copy for theirrecord and return the original.

3(45) A to Z procedure about Registrationof the WILL- contd.


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5. Please carr two co ies of our Photo ra h tobe affixed on the Will. Also carry a copy of your

Voter Card for identification.. resent t e or eg strat on n t e o ce othe Sub-Registrar- the place where we

property.7. After receivin our WILL for Re istration in

the office of Sub-Registrar, the dealing clerkwould give you a receipt on the basis of whichyou would get back the original Registered Will

after about 15 days.

3(46) Special new innovative


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ea or your :-

-

.

3(47) Miscellaneous


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aspec s o e .1. You can write in the WILL all you want

to write. Length of the WILL is not

relevant.

2. You can write about your emotions and

feelin s in the WILL with reference tofamily members, relatives and friends

3. You can write in the WILL the reasons

legal heirs.

3(48) Miscellaneous aspects


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o e .4. You can also write in the WILL the reasons

of not giving assets to some of the legal

heirs.

5. You can also put various conditions in

your Will with special reference to.

(a) The cremation ceremony.

(b) The charities to be give to various

charitable and religious organisations.

(c) The obligations to be discharged by

var ous e rs o n er e asse s e

marriage etc.

3(49) Miscellaneous aspects


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o e .6. Time eriod can also be mentioned

in the WILL when the assets have to

be distributed.

7. The WILL should contain distribution

plans of whole-world assets.

8. Separate WILL can be prepared for

separate property if the person

desires to divest real estate to

different legal heirs and desires

original WILL to be kept with each

co-owner.

3(50) Miscellaneous


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9. An illiterate person can also executethe WILL by merely affixing the Thumb

Impression. In such cases these-

and explained by me: and then the

adviser who has explained thecontents.

10. If the WILL is written in English butthe person executing does notun ers an ng s en a so o owthe above formalities.

3(51) Miscellaneous


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aspec s o e .11.The ownershi of Joint Bank Fixed

Deposits, Joint Shares & Mutual Fund

Holdin can be chan ed throu h the WILL

12.The NOMINATION of Life Insurance

policies etc. can be changed through the

WILL.

13.WILL should be kept in a very safe place-

Bank Locker, Almirah, with the Lawyer,etc. Prepare an extra zerox copy of the

WILL to be kept with the Lawyer and /or

your Spouse/Executors.

3(52) How to implement the


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1. After the death of the Executant of the

WILL the Executor to the WILL should

roceed to distribute the assets of the

deceased in terms of the WILL.

2.The executor after distribution should

prepare an affidavit to this effect.

3. Bank, Income-tax Dept- and others to be

informed.4. Better prepare a file-What my family

should Know giving details of

assets, original papers, lockers etc.

3(53) SAMPLE DRAFT OF WILL


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I, Shri/Smt. .son/wife of Shri .. aged , ,

housewife, residing at declare this to be

my last and final Will (revoking all previous Wills) which I make this,the.day of ..2012 (.2012) without any persuasion orcoercion and out of my own Will only.

1. I hereby revoke all former Wills and Codicils made by me includingmy earlier Will dated .

2. I appoint Shri of..tobe the executor of my this Will. In the event Shri were to predecease me, then Shri, .

3. The executor will be incharge of my entire estate after my demise.4. The Executor will have all the powers under the law to

for the administration of the Estate in accordance with theprovisions of this WILL.

The following are my assets:The following are my assets:--


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.

(a)

(b)

....

(c)...

B. Movable Assets.


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(a) Cash & Bank Balances.

(c) Gold & Diamond Jewellery.

(d) Household Goods & Personal effects.

(e) Bank Fixed Deposits.

(f) Bonds and units of Mutual funds.

g e e on s o eserve an o n a.(h) Capital Account with Partnership Firm of M/s

...

(i) Shares and Debentures of various companies.

(j) Silver Utensils.

.

(l) ..

I have provided the under-

t d i t f


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spent and given out of my

carried out by my Executor. Idesire that after my demise

all m Immovable andmovable assets shall be

manner and my desire shall

Executor:-

A. Property atto be

given to


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given to..

B. Property at.

to be given away to .

C. My share in the partnership firm ofM/s. .. shall be given away

to

D. The shares of various companies owned byme as on the date of my death shall begiven away to

E. The Gold & Diamond Jewellery to be given away


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Name Item. ..

. . ....

F. My household goods and personal effects shall

be iven awa to m .....

.

shall be given away to ...

Income tax Wealth tax and Gift tax liabilities if any


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Income-tax, Wealth-tax and Gift-tax liabilities, if any,shall first be paid out of my Estate.(8) I further declare that this is my last and final

Will and that no other Will, if unregistered, shoulde rea e as my a any po n o me an a n

future I will continue to have full right and power

now onwards my subsequent Will would be validonly if the same is a Registered Will. I am making

my intention very clear that none of my unregisteredWill should be treated as valid.

In WITNESS WHEREOF, I the said SHRI, put my signature to this Will, theday, month and year first above written.


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SIGNED BY THE ABOVE NAMED TESTATOR.

in the joint presence of himself and us who at

his request and in such joint presence haveereun er su scr e our names as w nesses:-

1. Shri Subhash Chandra LakhotiaIncome-tax PractitionerS-228, Greater Kailash-2,New Delhi-110048

2. .


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Tax Consultant & MotivatorTax Guru CNBC AwaazLakhotia Niwas,

S-228, Greater Kailash-2,New Delhi-110048Ph : 011-29215434, M-09810001665E-mail : [email protected]

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