Transcript Slide 1

Wills & Probates
Jairam Chandnani
NOVEMBER 06, 2008
LEXIM ASSOCIATES
What is a Will
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WILL is a legal declaration of the
intention of a person with respect to his
property or a state, which he desires to
take effect after his death. WILL is an
untitled document which state after the
death of a person making the deposition
an it is document which can be revoked ,
modify or substituted by the person
executing the will at any point of his time
during his life time.
LEXIM ASSOCIATES
What Happens if You Die Without
A Will?
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If you die intestate (without a will), your state's laws
of descent and distribution will determine who receives
your property by default. These laws vary from state
to state, but typically the distribution would be to your
spouse and children, or if none, to other family
members. A state's plan often reflects the legislature's
guess as to how most people would dispose of their
estates and builds in protections for certain
beneficiaries, particularly minor children. That plan
may or may not reflect your actual wishes, and some
of the built-in protections may not be necessary in a
harmonious family setting. A will allows you to alter
the state's default plan to suit your personal
preferences.
LEXIM ASSOCIATES
What a Will Does?
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A will provides for the distribution of property owned by you at the time of
your death in any manner you choose (subject to the forced heirship laws
of some states that prevent disinheriting a spouse and, in some cases,
children). Your will cannot, however, govern the disposition of properties
that pass outside your probate estate (such as certain joint property, life
insurance, retirement plans, and employee death benefits) unless they are
payable to your estate.
Wills can be of various degrees of complexity and can be utilized to achieve
a wide range of family and tax objectives. If a will provides for the outright
distribution of assets, it is sometimes characterized as a simple will. If the
will establishes one or more trusts, it is often called a testamentary trust
will. Alternatively, the will may leave probate assets to a preexisting inter
vivos trust (created in your lifetime), in which case it is called a pour over
will. In either case, the purpose of the trust arrangement (as opposed to
outright distribution) is to ensure continued property management and
creditor protection for the surviving family members, to provide for
charities, and to minimize taxes.
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What a Will Does?
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Aside from providing for the intended disposition of your property to spouse, children etc.,
there are a number of other important objectives that may be accomplished in your will.
You may designate a guardian for your minor child or children if you have
survived the other parent and, by judicious use of a trust and appointment of a
trustee, eliminate the need for bonds and supervision by the court regarding the
care of each minor child's estate.
You may designate an executor of your estate in your will and eliminate the
need for a bond; in some states the designation of an independent executor will
eliminate the need for court supervision of the settlement of your estate.
You may choose to acknowledge or otherwise provide for a child (e.g., stepchild,
godchild, etc.) in whom you have an interest, an elderly parent, or other
individuals.
If you are acting as custodian for the assets of a child or grandchild under the
Uniform Gift (or Transfers) to Minors Act, you may designate your successor
custodian and avoid the expense of a court appointment.
Good planning can also enhance your support of religious, educational, and other charitable
causes.
LEXIM ASSOCIATES
What A Will Does Not Do?
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A will does not govern the transfer of
certain types of assets, called non probate
property, which by operation of law or
contract pass to someone else on your
death. For example, real estate and other
assets owned with rights of survivorship
pass automatically to the surviving owner.
Likewise, an IRA or insurance policy
payable to a named beneficiary passes
outside the will.
LEXIM ASSOCIATES
What are the Requisites of Will?
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For executing the Will the person must be fully
competent, as much as he should not be a
minor and should not person of unsound mind.
The Will has to be in writing and has to state
that the person executing the same is making it
out of his own free will and in a sound disposing
state of mind.
It has to be signed by the executor of the Will
and has to be attested by two witnesses at
least.
LEXIM ASSOCIATES
Points to be noted while making a
WILL
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1. Decide what property to include in your will.
To get started, list your significant assets. Then decide which items should (or must) be left by other
methods, outside your will.
2. Decide who will inherit your property.
For most people, it isn’t hard to decide who gets what. (But if you are considering leaving your spouse or
children out of your will.
3. Choose an executor to handle your estate.
Every will must name someone to serve as executor, to carry out the terms of the will. Be sure that the
person you have in mind is willing to serve -- the job shouldn’t come as a surprise.
4. Choose a guardian for your children.
If your children are under 18, decide who you want to raise them in the very unlikely event that you and
their other parent can’t.
5. Choose someone to manage children's property.
If you leave property to children or young adults, you should choose an adult to manage whatever they
inherit. To give that person authority over the child’s inheritance, you can make him or her a property
guardian.
6. Sign your will in front of witnesses. After making your will you'll need to sign it in the presence of
at least two witnesses. If you’re using a document called a “self-proving affidavit” with your will (to make
things simpler when the will goes through probate court after your death), your signature must be
notarized as well.
7. Store your will safely.
LEXIM ASSOCIATES
Tell your executor where your will is and how to get access to it when the time comes.
Is Registration of Will Compulsory?
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The WILL under law is not required to be
compulsory registered. It can be executed
even on a plain paper and it can be fully
valued even if unregistered.
LEXIM ASSOCIATES
Where the Will has to be
Registered
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In the event of the person desiring WILL to be
registered, he has to approach the office of the Subregistrar and has to be accompanied by the person who
have signed as witnesses on the said WILL .The
executor of WILL as well as the attesting witnesses have
to put their signatures and thumb impressions in the
register maintained by the Sub-registrar. There are Subregistrars defined for various district and you have to
inquire for in this regard from the concerned office as to
which Sub-registrar you are required to get your WILL
registered. The Sub-registrar would be as per the place
of the residence of the person executing the WILL.
LEXIM ASSOCIATES
What is Probate?
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Probate is a legal process during which the will is
validated; the assets of the deceased are inventoried;
and all debts, creditor claims (including applicable
lawsuits) and taxes are paid. Then, once it is determined
who is entitled by the probate proceedings, the
remaining assets that were left in the Will are distributed
to the named beneficiaries and heirs. The process is
generally overseen by an executor, if there is a will, or
by a court, and a court appointed personal
representative, if there is no will. Probate can take
anywhere from four months to a number of years to be
completed, depending on state laws and varying
circumstances.
LEXIM ASSOCIATES
Where can a Will be Probated?
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A will is probated in the county and state in which the
testator (person who wrote the will) died. If the testator
owned any property in another state, another probate
proceeding will be started in that state and county.
Assets that do not pass directly to a surviving spouse or
other heir through a community (joint ownership or joint
tenancy) property agreement, right of survivorship, a
payable on death (POD) bank account, an "in trust for"
account with named beneficiary, other trusts with named
beneficiaries, life insurance, retirement accounts [e.g.,
IRAs, Keoghs, and 401(k)], or annuities are subject to
formal probate proceedings. If the decedent dies without
a will (intestate), and no beneficiaries are named, the
courts will determine the hierarchy of heirs.
LEXIM ASSOCIATES
Benefits of Probate
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Probate does provide some important benefits.
Most important, it provides some court
supervision to make sure a deceased person's
property is accounted for and distributed as
intended. Once the probate "creditor's claim
period" expires (generally four months after the
executor is appointed) it is very difficult for
creditors or others to claim any interest in the
estate. For a professional (such as a doctor,
accountant, or attorney), probate may bar later
lawsuits that would otherwise be difficult to
defend without the help of the deceased person.
LEXIM ASSOCIATES
Drawbacks of Probate
But probate has several drawbacks, which lead many people to
seek to avoid probate.
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Probate Delay: Formal probate takes at least six months to a year.
Sometimes, probate can drag on for several years, or in extraordinarily rare
situations, for decades.
Often, these delays are not important. The surviving family members
usually have immediate access to joint bank accounts, and rapid access to
life insurance proceeds. If special needs exist, the probate court will usually
allow preliminary distributions or payment of an allowance to family
members.
However, in certain situations, probate delays can create problems. For
example, a small business or professional practice must often be sold
quickly after death to avoid losing clients. If a deceased person owned
stock options related to employment, those options may lapse if not
exercised quickly.
LEXIM ASSOCIATES
Drawbacks of Probate
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Probate Fees: Second, probate can be expensive, because of court
fees, fees paid to the attorney and to the executor. The actual fees
paid to the probate court are limited to maximum of Rs. 75,000/for filing fees. For property other than cash or its equivalent, a
usually (if there is dispute) the receiver appointed by court or any
other qualified person must appraise the property, for a fee which
may equal to one-tenth of 1 percent (0.1%) of the value of the
property.
Finally, even if probate is avoided, the fees might not. An attorney
and/or accountant usually must be hired to help administer a
deceased person's trust or non-probate estate. In addition, the
trustee of a "living trust" is usually entitled to claim a reasonable fee
for managing the trust, although many family members do not
actually request fees.
LEXIM ASSOCIATES