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7/28/2019 Wills Trusts and Succession Planning
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LawQuest 2009. All Rights are Reserved.
Wills, Trusts and Succession Planning
By Poorvi Chothani, Esq.
LawQuest, Mumbai
www.lawquestinternational.com
http://www.lawquestinternational.com/http://www.lawquestinternational.com/7/28/2019 Wills Trusts and Succession Planning
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LawQuest 2009. All Rights are Reserved.
LawQuests Areas of Practice Media, Technology and Entertainment Law
Intellectual Property Law
Immigration Law (Global, US immigration and Indian
immigration)
Corporate and Commercial Law
Dispute Resolution
Real Estate Law
Personal, Testamentary and Family Law
Employment Law
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LawQuest 2009. All Rights are Reserved.
Topics
Wills
Trusts
Succession Planning
Business Succession Planning
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General Rules of Succession Under
The Hindu Succession Act, 1956
Daughter by birth becomes coparcener and has the same right as that of theson in the intestates property;
Daughter is subject to the same liabilities as that of the son in respect of the
intestates property Heirs related to intestate by full blood are preferred over half- blood
relatives;
Two or more heirs who succeed to the intestate property, shall take it is asper capita and not per stripes and as tenants- in common and not as jointtenants.
A child, who was in the womb at the time of intestates death andsubsequently born alive, shall have same right to inherit as if born before thedeath of the intestate.
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Intestacy
When a person dies without making a Will, his property devolves upon hisheirs as per the laws of inheritance/succession applicable to him/her.
When this occurs, the Intestates assets are frozen until a court appoints anadministrator and they are then distributed according to a rigid legalformula.
Until the administrator is appointed, it is possible that no income will beavailable for the intestates dependants and a legal battle may follow if the
distribution is contested in court.
Hence the possibility of any dispute surfacing between dependents could begreatly reduced just by drafting the Will.
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Intestate Hindu Male
Equal Share of the property devolves upon following persons:
Mother being alive
Widow;
Living Son;
Living daughter;
Son of a pre-deceased son;
Child of a pre-deceased son;
Child of a pre-deceased daughter;
Widow of a pre-deceased son;
Son of a pre-deceased son of a pre- deceased son;
Daughter of a pre-deceased son of a pre-deceased son;
Widow of a pre-deceased son of a pre-deceased son.
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Intestate Inheritance Under the Indian
Succession
a widow and lineal descendants (children and children's
children, born out of lawful marriages), if any, 1/3 of his property
shall belong to the widow, and the remaining 2/3 shall go to the
lineal descendants.
no lineal descendants, but has left persons who are of kindred
(blood relatives) to him, of his property shall belong to the
widow and the other shall go to those who are of kindred to
him.
None kindred to him, the whole of the property shall belong to
the widow.
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Intestate Christian Widow / widower1/3 of the property
Lineal descendantsequally to share 2/3.
In the absence of lineal descendant, to all grand children, -
equally
In the absence of grandchildren, to great grant children
equally
Lineal descendant of a predeceased child or lineal descendant
of a predeceased child of a predeceased child if present -division is based on equal shares, taking the predeceased child
to be alive, and a downward distribution amongst the lineal
descendants.
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Intestate Christian (cont)
With no lineal descendant:
Widow /widower 1/3
Father the Remaining Estate
If Father is dead, to mother, sisters and brothers-
equally
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Intestate Hindu Female
Equal Share of the property to be divided between each of the
following persons
Son
Daughter Husband
Son and daughter of predeceased son (equally together one
share)
Son and daughter of predeceased daughter (equally together oneshare)
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Intestate Parsi
Widow / Widower and Children get equal share
In the absence of widow/widower or children each parent
shall get a share equal to half of a Childs Share
Widow and children of a predeceased son, shall take the
share of the predeceased son
Share of predeceased daughter will be equally distributed to
her children.
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Wills - Terminology
Will - The legal declaration of a man's intentions of what hewills to be performed after his death.
Codicil - A supplement or addition to a will that explains,modifies, or revokes a previous will provision or that adds anadditional provision. A codicil must be signed and witnessedwith the same formalities as those used in the wills
preparation.
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Terminology (contd..)
Testator - the one who makes a will or a testament.
Executor - The person or entity named in a will who has theresponsibility of carrying out the terms of the will (that is,
collecting the will maker's assets, paying the debts, and
distributing the remaining assets to the beneficiaries)
http://www.lectlaw.com/def/e060.htmhttp://www.lectlaw.com/def/e060.htm7/28/2019 Wills Trusts and Succession Planning
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Terminology (contd..)
Legatee - Also known as a beneficiary. A legatee is a person
to whom a legacy is given by a last will and testament.
Administrator - A person appointed by a court to manage
and to distribute the estate of a person who has died without a
will; and is distinguished from an executor of a will.
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Capacity to Make a Will
Anyone of legal age (18 years old) and sound mind can make
a Will. When you have property which you wish to distribute
after of your death, you need to have will.
Under the Indian laws minors (below 18 years) and lunatics
(people of unsound mind) are considered incompetent to make
a will
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Functions of a Will
Implement the wishes of the testator
Distribution of the assets as per the testators desire
Method disposing property
Appointing executors, crating trusts and Appointing testamentary guardians of minor children
Avoid inheritance disputes after the death of the testator
A Will is a secret and confidential document that needs to be
safe and accessible to the executor or next of kin.
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Essentials of a Will
Will should be
o In writing;
o Signed by the testator; and
o Attested by two witnesses
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The Most Important Issue
To Ascertain Whether It Is In Fact TheLast Will Of The Testator
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After the Death of the Testator
Obtain Probate if there is a Will
Executor
Beneficiary
Apply for Letters of Administration if there is no Will
Heirs
Court Appoints an Administrator
Processing time
About 6 months if the Will is not Challenged
Indefinite if the Will is Challenged
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10 Tips to be Considered While Drafting a
Good Will
Choose who draws up your will wisely
Choose your executors well
Appoint a default or substitute executor
Appoint guardians Appoint trustworthy trustees /executors
Make specific legacies
Make sure you leave a residual legacy
Save tax with a trust (no estate tax in India)
Sign your Will
Get it stored safely
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Should You Have A Trust?
Depends on the size of the estate and the purpose of the trust
A trust will help avoid a court hearing in the event the
testator becomes incompetent or are rendered unable to
provide for yourself
A trust also helps to provide for minor children,
grandchildren, or relatives with a disability that makes it
difficult for them to manage money
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Business Succession
Succession Planning for Businesses
o To stay successful, Businesses need to define their objectives
o Separate family interests from business interests
o Incremental separation of management from ownership
o Creation of an environment of transparency and meritocracy
o Grooming talent
o Interaction between three groups of stakeholders: family managers,professional managers and family shareholders
o Guide and supervise the executive management in the best interest ofits shareholders
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Certain Points to Remember Before Planning
Personal Succession
Obtain written consent of executor, trustee or guardian
Be specific and provide comprehensive, identifying details
It is a good idea to video record the process of executing yourwill
Copies of the recording should be given to decision makers
Registering your Will is Optional
Choice of witnesses
Presence of Both witnesses not required but recommended
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LawQuest 2009. All Rights are Reserved.
General Tips
Making nominations (property, bank accounts, insurance policies andshares)
Important - A nominee is only a trustee for legal heirs and the right of
the legal heirs cannot be taken away by nomination
Seek professional advice
Revise documentation whenever circumstances change
Find willing and capable trustees
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Family Office
Asset Reporting
Record Management
Taxation Legal
Private Equity
Overseas Investments
Alternative Assets
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LawQuest 2009. All Rights are Reserved.
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