Did you watch the blockbuster Bengali movie ‘Belaseshe’? The movie is about an elderly couple. The husband is stressed due to a complete lack of financial awareness of his wife. The elderly gentleman follows an extreme path to make the lady financially independent. The veteran artists’ duo Late Soumitra Chatterjee and Late Swatilekha Sengupta do a fabulous job.
The film shows a tough ride that the couple face. However, there is an easier and better way the husband could have used to plan his estate – which probably the movie’s blockbuster director duo missed out on!
There are many more similar real-life cases around us.
For example, we may have heard of a septuagenarian couple who own an estate of a reasonable size. The husband manages the fund and the regular income flow needed for the family. They have two sons staying abroad – they have no intention of returning home under any circumstances. Life is sometimes more dramatic than the movies. In this real-life case, the wife loses her eyesight due to age-related ailments. The husband is more or less fit, apart from some common orthopaedic issues. But he is tremendously worried about how to take care of his wife in case something happens to him!
Another example. A young lady, unfortunately, loses her husband when the daughter is five years old. Fortunately, the husband had his life insurance and employee benefits – sufficient to take care of his wife and the child’s future education and marriage. The HR department of the late husband’s office as well as good family friends help the young lady to plan her funds. But, she is always scared as a single parent – what would happen to the child if something similar happens to her!
One more example. A financially aware gentleman meets an accidental death in his sixties. When he was alive, he never thought it was a time to make a Will as he had only one son. But he had nominations in all possible places.
There are many more cases similar to these – cases in which people have been unable to plan their estate. What we need to remember is that assets never persist eternally with us. Life after death counts at some points. Why not plan for the most certain event in life? There are tools that can help us take care of our estate better. Let’s see how Estate Planning could help the cases we spoke about a little while ago.
- The elderly gentleman in the movie could make a Will to create a Testamentary Trust to make his wife a beneficiary. All the needs of his wife in his absence could be handled perfectly by a few trustees defined by him.
- The gentleman in real life, worried about his wife’s loss of vision, creates a discretionary living trust to take care of their regular expenses from now on and also takes professional help for a hassle-free living.
- The young lady writes a Will to create a determinate testamentary trust if she dies before the daughter is independent. She determines the exact living, education, higher education and wedding-related future expenses of the daughter, inflation-adjusted, to mention in the trust deed. She decides to rely upon three trustees whom she could depend on in her absence to take care of her daughter’s needs until she is independent.
- Once the family could settle again, it took years to get the assets transferred to the wife and the only son of the late gentleman died intestate.
We never know when we will meet the ultimate reality of life. So, we must create a Will even if we do not register it, the day we first own a property. Dying intestate is a bane, considering the hassles and tax burdens of intestate succession. Accidental death is a double burden on the family.
Creating a Will is the easiest and cheapest mode of estate planning. A registered Will makes the life of the successors comfortable as they need to prove the legality of the unregistered Will in the Court of Law during the Probate process.
Trust is the right option when the successor or the beneficiary is a minor or not in a position to manage the inherited assets. The probate process can be avoided by forming a trust.
There are other ways like a Power of Attorney, which is useful in case of incapacity of the property owner.
The gift and partition of property are also ways of Estate Planning. A gift is an easy but irrevocable transfer of estate during the property owner’s lifetime.
Estate planning aims to preserve the maximum amount of wealth possible for the intended beneficiaries and to keep the Estate owner’s flexibility until death or incapacitation. In simple words, Estate Planning is a tax-efficient way of handing over the estate – both real and personal, to the intended person at the right time in the right manner.
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– Aditi Nundy
