You work hard throughout your life building assets. And you probably do this to ensure financial safety and security to your loved ones.
But what would happen to these assets on your sudden demise? Have you given a thought to it?
That’s where estate planning comes into the picture.
Estate Planning is not only for the Rich and the Old. And it is not an exercise to be looked after post retirement.
Estate Planning simply refers to passing down of your residual assets from one generation to another.
Succession planning is a process by which individuals are scanned to pass on the leadership role within a company. The process ensures that business continues to operate efficiently without the presence of people who were holding key positions as they must have retired, resigned, etc.
Succession Planning, specifically termed as Management Succession Planning, involves coaching and development of prospective successors or people within a firm or from outside to take up key positions in an organisation through an organized process of assessment and training.
A will, also known as a last will and testament, is a legally enforceable declaration of how a person wants their property and assets distributed after death. In a will, a person can also recommend a guardian for their minor children and make provisions for any surviving pets.
A will is an important component of estate planning. A will ensures that the person's wishes are carried out and can make things easier for their heirs. If an individual dies without a will, the distribution of their property is left up to the government, and may even end up becoming state property. The format of wills can vary, but most follow a fairly uniform layout.
The document usually begins with a statement that the writer is of legal age and making the will freely and without duress. It also attests to the writer's mental soundness at the time the will was made. This section establishes the writer's identity and includes an explicit statement that this final will rescinds all previous documents.
In the will the writer names an executor, who oversees the liquidation and distribution of the decedent's assets according to the terms of the will. The executor must also pay off any outstanding debts and taxes on the estate. The executor may be an attorney or financial expert, or anyone the writer of the will trusts to act responsibly. The executor may be entitled to receive a reasonable fee for services rendered. Fee guidelines may be mandated by the state.
DISCLAIMER: WealthHealth is an AMFI registered mutual fund distributor. No content on this website should be considered as investment advice. The above information is for education purpose only. The views, opinions, reviews and analysis are not to be used as a measure of recommendation to buy or sell any investment asset.