Why Is a Will Important in India?

Why Is a Will Important in India? Protect Your Property, Savings, Investments and Family’s Future

Have you ever thought about what will happen to your property, bank deposits, shares, mutual funds and other investments after your lifetime?

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Most of us spend our entire lives working hard, earning money, buying properties, saving for retirement and building financial security for our families. But one important responsibility is often overlooked: making a Will to ensure that our hard-earned assets are passed on according to our wishes.

 

Why Is a Will Important in India?, nomination, will creation

Making a Will is not just for wealthy individuals or senior citizens. Every person who owns property, financial investments or other valuable assets should consider preparing a legally valid Will.

Why Is a Will Important?

A Will is a legal document that explains how you want your assets to be distributed after your death. It allows you to specify who should receive your property, savings, investments and other belongings.

Without a Will, the distribution of your assets may be governed by the applicable succession laws. This can sometimes create confusion, delays and disagreements among family members.

A properly drafted Will can help avoid unnecessary complications and make the inheritance process easier for your loved ones.

Which Assets Should Be Included in Your Will?

Many people think a Will is required only for houses, land and other immovable properties. However, your financial assets are equally important.

Consider including the following:

1. Immovable Properties

  • Residential houses and apartments
  • Independent houses and villas
  • Agricultural land and residential plots
  • Commercial properties, shops and offices

2. Bank Deposits and Savings

  • Savings and current bank accounts
  • Fixed deposits and recurring deposits
  • Other eligible bank investments

3. Shares and Stock Market Investments

  • Listed and unlisted company shares
  • Demat account holdings
  • Exchange-traded funds (ETFs)
  • Government and corporate bonds

4. Mutual Fund Investments

  • Equity mutual funds
  • Debt mutual funds
  • Hybrid and multi-asset funds
  • SIP investments and existing mutual fund folios

5. Insurance and Retirement Benefits

  • Life insurance policies
  • Eligible provident fund benefits
  • Pension-related benefits
  • Other financial assets that can be dealt with through a Will under applicable laws

6. Other Valuable Assets

  • Gold and jewellery
  • Vehicles
  • Valuable personal belongings
  • Eligible digital assets

Is Nomination Enough? Understanding Nominee vs Legal Heir

This is one of the most important questions every investor and property owner should understand.

Many people nominate their spouse, children or other family members in bank accounts, mutual funds, shares and insurance policies. They assume that the nominee automatically becomes the owner of the entire asset.

However, a nominee is not necessarily the ultimate legal owner.

The rights of nominees differ depending on the type of financial asset and the applicable law.

For example, in shares and securities, nomination does not automatically override the succession rights of legal heirs. In mutual funds, the nominee may receive the units subject to the applicable rules and the rights of legal heirs or beneficiaries under a valid Will.

Life insurance has specific beneficial nomination provisions for certain close family members.

Therefore, updating your nominations is important, but it should not replace proper estate planning and Will preparation.

What Happens If You Die Without Making a Will?

If a person dies without leaving a valid Will, it is called dying intestate.

In such cases, the assets are distributed according to the applicable personal succession laws.

This process can sometimes involve:

  • Legal heir certificates or other succession documents.
  • Additional documentation and verification.
  • Delays in transferring financial assets.
  • Disagreements among family members.
  • Legal proceedings where inheritance disputes arise.

A properly drafted Will can help communicate your wishes and reduce the possibility of such complications.

Important Things to Remember While Writing a Will

  • Clearly list your movable and immovable properties.
  • Mention your bank accounts, shares, mutual funds and other investments.
  • Clearly identify the beneficiaries.
  • Specify how each asset should be distributed.
  • Appoint an executor to administer your Will.
  • Appoint alternative beneficiaries where appropriate.
  • Have the Will properly signed and attested by two witnesses.
  • Review your Will whenever there are significant changes in your family or financial circumstances.

Under Indian law, registration of a Will is generally optional. However, it must satisfy the applicable legal requirements to be valid.

Don’t Just Create Wealth. Plan Its Transfer!

You may have spent 30 or 40 years building your wealth. Take a little time to ensure that your family can inherit and manage it with fewer complications.

A Will is not about expecting the worst. It is about being responsible towards the people you love.

Shakti Yezdani v. Jayanand Jayant Salgaonkar (2023) – Particularly relevant to investors

Citation: 2023 INSC 1076, decided on 14 December 2023.

This judgment is especially useful for your article because the underlying family dispute involved shares, fixed deposits and mutual fund investments.

The Supreme Court upheld the principle that nomination under the Companies Act and Depositories Act does not create a separate mode of succession or automatically override a valid Will and applicable inheritance laws.

The judgment specifically dealt with shares and securities. Although mutual funds were part of the factual dispute, do not describe its ruling as a blanket decision on every type of mutual fund nomination.

Official Supreme Court judgment: Read the full judgment (PDF)

Remember: Nomination helps facilitate the transfer of assets. A Will communicates your wishes about inheritance, subject to applicable law. Both are important parts of financial and estate planning.

Protect your hard-earned wealth. Prepare a Will and keep your nominations updated.

For legal advice on Will preparation, inheritance and succession planning, consult a qualified lawyer.

Disclaimer: The information provided on this page is for general educational and public awareness purposes only and does not constitute legal or financial advice. Nominee and legal heir rights may vary depending on the asset type and applicable laws in India. Readers are advised to consult a qualified lawyer before preparing a Will or making inheritance-related decisions. The website owner is not responsible for decisions taken solely based on this information.