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Wills & Probates Jairam Chandnani NOVEMBER 06, 2008 LEXIM ASSOCIATES.

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Presentation on theme: "Wills & Probates Jairam Chandnani NOVEMBER 06, 2008 LEXIM ASSOCIATES."— Presentation transcript:

1 Wills & Probates Jairam Chandnani NOVEMBER 06, 2008 LEXIM ASSOCIATES

2 What is a Will 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. 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. WILL LEXIM ASSOCIATES

3 What Happens if You Die Without A Will? 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. 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.intestate LEXIM ASSOCIATES

4 What a Will Does? 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. 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. 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.pour over willpour over will LEXIM ASSOCIATES

5 What a Will Does? 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. 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 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 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. 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. 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. Good planning can also enhance your support of religious, educational, and other charitable causes. LEXIM ASSOCIATES

6 What A Will Does Not Do? 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. 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

7 What are the Requisites of Will? 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. 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. 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. It has to be signed by the executor of the Will and has to be attested by two witnesses at least. LEXIM ASSOCIATES

8 Points to be noted while making a WILL 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. 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 isnt hard to decide who gets what. (But if you are considering leaving your spouse or children out of your will. 2. Decide who will inherit your property. For most people, it isnt 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 shouldnt come as a surprise. 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 shouldnt 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 cant. 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 cant. 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 childs inheritance, you can make him or her a property guardian. 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 childs 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 youre 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. 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 youre 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. Tell your executor where your will is and how to get access to it when the time comes. 7. Store your will safely. Tell your executor where your will is and how to get access to it when the time comes. LEXIM ASSOCIATES

9 Is Registration of Will Compulsory? 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. 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

10 Where the Will has to be Registered In the event of the person desiring WILL to be registered, he has to approach the office of the Sub- registrar 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 Sub- registrars 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. In the event of the person desiring WILL to be registered, he has to approach the office of the Sub- registrar 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 Sub- registrars 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

11 What is Probate? 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. 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

12 Where can a Will be Probated? 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. 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

13 Benefits of Probate Benefits of Probate 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. 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

14 Drawbacks of Probate Drawbacks of Probate But probate has several drawbacks, which lead many people to seek to avoid probate. 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. 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. 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. 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

15 Drawbacks of Probate Drawbacks of Probate 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. 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. 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


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