Process
The main purpose of creating a Will is to break away from the Succession Laws and enables you to choose the beneficiaries of your wealth. Will writing process involves the following steps:
Preliminary Discussion with the Lawyer on the following issues:
- Ascertainment and Appointment of the Executors, who would take control of the assets for distribution amongst the beneficiaries as per the wishes of the Testator/Testatrix. The Testator/Testatrix can choose his/her Beneficiary as the Executor of his/her Will.
- Understanding the requirements and finalization of the wishes of the Testator/Testatrix
- Identifying the beneficiaries, Contingent Beneficiaries and Final Beneficiaries
- Allocation of Assets and conditions, if any, in respect of the same
- Identifying any specific personal law related to succession which shall be addressed while drafting in the Will.
- Appointment of a Guardian and Guardian for minor beneficiaries.
- Guidelines regarding the upbringing of the minor beneficiaries and investment guidelines for the assets that would devolve upon them
- Creating a life estate for any particular asset.
- Inclusion or exclusion of HUF assets in the Will.
- Where the assets are held outside India, identifying any restriction on transfer of such assets.
- In case a person is NRI/PIO/foreign citizen, identifying the international law applicable to him with respect to succession?
Consolidation of all assets, tangible or intangible, movable or immovable, through a pre-defined Questionnaire. The said Questionnaire is an exhaustive one and one of our team member will assist you in getting all the details relevant to your case and will fill up the Questionnaire.
On the basis of the kind of assets you hold, the Lawyer will discuss the distribution of assets in order to prevent any misunderstanding and dispute in future.
The first draft of the Will is created by the Lawyer based on the previous steps.
Lawyer makes changes to the draft based on the client’s feedback and further discussions.
Final Draft of the Will is settled by the Lawyer. Any further amendments, reviews and additions to the Will or any Codicil, as required, will be carried out absolutely free of cost.
Guidance towards Execution and Registration of the Will.
While Will is the most basic form of Estate Planning, in many cases writing a Will may not be sufficient and a Private Family Trust may be the recommended option. It is a flexible and legal structure that can be utilized for the benefit of family members during their lifetime as well as provide guidelines and conditions for the utilization of the assets and their income for the benefit of the beneficiaries named in the trust.
While the biggest advantage of a trust is the flexibility it offers to the Settlor in determining the distribution of the trust property, a Private Family Trust to provides a mechanism whereby the needs of the entire family are met, including one’s old age needs, the future needs of a special child, young or unborn children / grandchildren, while allowing the flexibility to provide appropriate benefits to different family members at different points in time, taking into account changing necessities, opportunities, etc. It also offers several other benefits, not the least of which is ring-fencing of assets against possible losses due to business liabilities, family related liabilities arising from divorce / maintenance claims, tax claims, and / or actual or potential creditors. While private trusts may be managed by family members, they also provide the flexibility to appoint an unbiased independent person for taking decisions on distribution of wealth to various family members and others. Further, private trusts offer families the ability to bypass the probate process, give heirs the benefit of property without losing control of it, create a large pool of funds for making investments, structure business succession which may be based on a balance of merit and family control, and facilitate philanthropic activities all through one centralized and cost effective administrative body and if structured properly, least tax burden can be achieved if a trust is formed.
Preliminary Discussion with the Lawyer for understanding of the structure of the family/business and requirements of the client. On the basis of the information gathered, broad architecture of the Trust is discussed.
Kick off meeting where some of the broader issues are discussed to identify the right structure for the client. Understanding the objectives that the client wishes to achieve through the structure, what is the family vision, any particular dispute/instability that the family is experiencing and needs to be considered, etc.
Multiple discussions around the following issues for drafting of the Trust Deed:
- Who will be the Settlors of the Trust and what will be their powers?
- Trustees of the Trust – The discussion will revolve around the processes for appointment and removal of trustees, what will be the maximum and minimum number of Trustees for convening a meeting or for decision-making, etc., whether there should be an external Trustee who can act as an Advisor and who may be a close family friend or a Corporate Trustees, what will be his powers and to what extent he will be involved in the Trust. The powers of the Trustees like Administrative, Decision-making, and Fiduciary Powers will also be discussed and whether all the Trustees will enjoy same powers, what will be the investment guidelines for the Trustees and whether any discretionary powers has to be given to them?
- Successor Trustees – In what situation, will the Successor Trustees be appointed, who will appoint them and when will they start to function? Whether they will be from the same family or not? What kind of powers will they exercise, whether it will be same as that of the original Trustees?
- Beneficiaries - Who will be the Beneficiaries? – Settlor, their spouses, children, any other? What powers will Beneficiaries enjoy? Whether any Beneficiary will be enjoying restricted benefits?
- Funding of the Trust – What assets will constitute the Trust Fund, will there be any restrictions? How will additional transfer take place? For what purposes will it be used – Maintenance, education, marriage, business, loans any other expenses of the Beneficiaries? Whether this will apply to all Beneficiaries? How will the benefit of Trust Fund flow to all the Beneficiaries and will there be any limit? In case of dissolution of the trust, how will the Trust Fund be distributed amongst the beneficiaries?
- Vision of the Trust – Identifying the vision of the Trust – this can include the idea of keeping the family together, segregation of responsibilities of all family members, charitable causes as well as taking care of all family members whether involved or not. It can also incorporate any other vision that the client has pertaining to his family/business.
- Incorporation of Family Values is another feature that can be included in the Private Family Trust Structure. This may range from emphasis on education of children to whether there should be a limit on marriage expenses to donation for charitable or religious purposes.
- In case the client is a business family, there can be guidelines for continuing the business in the trust, ideas and areas to be explored for expansion of business, some do’s and don’ts in the business or family or both. Discussions regarding the Shareholding pattern – holding, distribution, etc. can also be carried out to get clarity.
- It is important to have some method for deciding the beneficial interest like how will the expenses vis a vis education, maintenance, health, etc. be taken care of, whether they will be borne by trust or individual. Criteria to differentiate between active and non-active member and an assessment on how the processes work in the family at present and guidelines to improvise them in future is also essential.
- It is significant to identify the Goals of the Settlor and the other family members, to analyze if they are similar, to mitigate the gap, if any. The owners should identify their personal goals for their future annual income, their level of involvement in the business, if applicable, their investments both inside and outside of their business, their legacy for the future, and their values. This needs to be associated and compared with the needs, goals and expectations of family members, other owners, and key employees? Consideration of their expectations would ensure that the plan will meet the goals outlined above.
- Discussion around the tenure of the Trust – whether it will be a revocable or an irrevocable Trust. If it is an irrevocable Trust, under what conditions will the Trust come to an end and who will have the powers to decide on the termination of the Trust? How the Trust Fund will be distributed when the Trust stands dissolved?
- In the event any dispute arises between the Trustees and the Beneficiaries, there has to be a mechanism for resolution of the same.
Based on the discussion on the above steps and the discussions held, first draft of the Trust Deed is created by the Lawyer and shared with the client for his feedback.
Once the client shares his feedback, next round of discussion takes place and on the basis of the same, the changes are incorporated and a revised draft is shared further.
After the client peruses the draft and approves the same, the Lawyer finalizes and settles the Trust Deed which is then printed on a stamp paper of requisite value and the documents are readied in order to get the same registered.
Execution of the Trust Deed in front of the Witnesses and the Sub-Registrar at the Registration Office. The Settlors and the Trustees along with the Witnesses have to be present at the time of the registration.
An Application for PAN Card on the basis of registered Trust Deed is submitted and a rubber stamp in the name of the Trust needs to be made.
A Current Bank Account is opened in the name of the Trust and the initial fund is deposited in the account for the Trust to become operational.