Saturday, October 15, 2011

Making of a Will

Recently I attended a seminar hosted by Moneylife Foundation, delivered by Adv Dr S D Israni. Dr Israni clarified during Q&A that Will/Personal Law etc are not his area of expertise but as a student of law he has interest in it; and would like to share his views with the audience. Seminar was oversubscribed and many were asked to join the next seminar. Unfortunately many did not turn-up. It happens. That's why overbooking is a standard practice in some service industries.

Any way, coming back to the subject of will, there is already an article on the seminar at this site.

I'll just add few points based on notes that I took during the seminar, mainly to record the important points for future use.

First, writing a will is neither complicated nor expensive. In fact, it could be done any time, any where on a simple plain piece of paper! What one requires is that, after it is written down - in language of your choice, when you put your signature - there should be two witnesses.

Practically, any adult can be a witness. But, if the property value is more; or if there is a likelihood of  a dispute among beneficiaries then it is preferable that one of the witness is a Doctor and other a Lawyer.

Do I have to reveal to the witness about content of the will?
You need not tell or show the witnesses what you have written in the will. They are merely a witness to your signing the will by putting down their name, address and signature. Of course, if you like, you may show the will to them; and give them a copy if you wish.

Will is not required to be registered. But, if it is registered with Sub-registrar of Properties (same department that registered property deeds / agreement of sale etc.) it helps as an independent verification / evidence of the will - should a dispute arise later on. There is no stamp duty on will. But registration fees will have to be paid.

Of course, one can write number of wills during his life time, registered or not. Only last will (registered or not) is taken in the account, while considering the claim by the beneficiaries. Will can be revoked any time without any formality by just writing a fresh will on a piece of paper with two witnesses.

Person making a will is called Testator in legal terms. When a will is made, legal heirs can not have any claim over the Testator's property; except what is given to them in the will.

What if no will is left by the deceased? 
In legal terms, this situation is called by a term - person died Intestate. In such a case, some times, succession certificate is required to be got from the High Court or District Court (for interior areas of a State), should a dispute arise over a property.

If a person has died Intestate then legal heirs have rights to the properly. Class-1 heirs are immediate relatives like Wife, Children and Mother. Class-2 relatives are Father, Brother etc. How much each can claim is decided by the Personal Law of the Religion of the deceased. So, religion plays an important part in deciding who will get what, when a person dies without a will. This being a very involved subject, it is best to take lawyer's advice on matters related to this aspect.

What is a will?
Will is a legal declaration of intention of the testator with respect to his property (including rights), which he desires to be carried into effect after his death.

Will is possibly the only legal document that has no legal validity till the person who has written it, is alive. Strange but true!

How to write a will?
Dr Israni said that J F Kennedy's will is famous for its simplicity and clarity. [I've seen J F Kennedy Jr's will. It's just two page long and comprehensive. It's only when reads a real will that we realise that it is not easy to write a simple will!]

Will should be written in any language, preferably in mother tongue - making it less vulnerable to mistakes of interpretation. Any way, it should be simple and clear i.e., there should not be any ambiguity with respect to its interpretation.

There is no prescribed format i.e., it could be in any format. It can be hand-written in a legible hand-writing. If it is typed and testator is unlettered then it should say 'text of the will was explained to me'. One can put thumb impression also.

Preferably, it should give list of each tangible and intangible property. It should state clearly the distribution i.e., who will get what. If one wants to divide the property among few then clear percentage should be mentioned in the will. Of course, total should be 100% or else there will be a dispute for sure.

It could mention how the property could be disposed off, if it is divided among two or more people.

Testator can give his property and rights to any one. It's not necessary to distribute it to his legal heirs. He can give it to any one including a trust. In fact, he can create a trust and then make a will.

The distribution can be conditional also. For example, When so and so attains an age of 25, he would get so and so amount etc. Logic of the same should be unambiguous. [There are many complications here when one actually sits down to write his will. This is because the will should provide for all possibilities. For example, say you have mentioned that after your death all properties should go to your wife. But what happens if she dies before you? Then you will have to make another will. But if both dies together, then what happens? Things become complicated when you have a son, two brothers, father etc. It's not easy. Just read J F Kennedy Jr's will - which is supposed to very simple.]

It is preferable:
  • if will is written on a green ledger paper because it has more life than ordinary white paper
  • if testator mentions his religion in the will
  • if witness is younger than the testator
  • if process of signing and attestation by witness is recorded on video
In case a will is written again, it should say clearly that it supersedes all previous wills, particularly those dated so and so.

Testator can appoint Executor of the will, if he so wishes. Executor can also be one of the beneficiary of the will. Executor is like a trustee, who ensures the distribution of property as written in the will. Executor can appoint/hire people to look after property and recover expense for the same from the property.

For making small changes will could have a section called 'codicil'. Codicil is an addendum that allows changes/addition of small nature to the will. It helps by avoiding the process of making a fresh will.

Some times Executor refuse to carry out his duties. In that case, matter goes to the court and court appoints an Administrator. Administrator will see the distribution of the property as per the will.

In case, a dispute arises then court issues a certified copy of the known last will called Probate. Also, court may appoint an administrator.

Jurisdiction
In case of dispute of an immovable property location of property decides the jurisdiction. And, in case of moveable property jurisdiction is decided by the location of the person in possession of the moveable property.

Transmission / Nomination
It would be prudent to appoint nominee for each property in such a way that nominee is same as beneficiary of that property as per your will (also called Legatee). In case, one decides to change the will then all such nominations also needs to be changed.

In case, one is sure of not changing his will then testator can include beneficiary's name as joint holder of the property. But, matter becomes complicated for adding / removing joint holders from legal point of view because both addition and removal of name requires joint holder's signature. And also transfer fees or stamp duty may become payable, if name is added later on.

With possible exception of shares, all nominees are legally speaking only a trustee i.e., upon death, they get the property in their name but they are supposed to transfer it to the beneficiary of the will. In 2010, Justice Dalvi of Bombay High Court has given a contrary view in case of shares claimed by a nominee.

Is Income Tax payable by the beneficiary upon receipt of property?
No. [This aspect needs to be checked by a Chartered Accountant.]

------------------------------oOo------------------------------

The Will of John F. Kennedy, Jr.

I, JOHN F. KENNEDY, JR., of New York, New York, make this my last will, hereby revoking all earlier wills and codicils. I do not by this will exercise any power of appointment.

FIRST: I give all my tangible property (as distinguished from money, securities and the like), wherever located, other than my scrimshaw set previously owned by my father, to my wife, Carolyn Bessette-Kennedy, if she is living on the thirtieth day after my death, or if not, by right of representation to my then living issue, or if none, by right of representation to the then living issue of my sister, Caroline Kennedy Schlossberg, or if none, to my said sister, Caroline, if she is then living. If I am survived by issue, I leave this scrimshaw set to said wife, Carolyn, if she is then living, or if not, by right of representation, to my then living issue. If I am not survived by issue, I give said scrimshaw set to my nephew John B.K. Schlossberg, if he is then living, or if not, by right of representation to the then living issue of my said sister, Caroline, or if none, to my said sister Caroline, if she is then living. I hope that whoever receives my tangible personal property will dispose of certain items of it in accordance with my wishes, however made unknown, but I impose no trust, condition or enforceable obligation of any kind in this regard.

SECOND: I give and devise all my interest in my cooperative apartment located at 20-26 Moore Street, Apartment 9E, in said New York, including all my shares therein and any proprietary leases with respect thereto, to my said wife, Carolyn, if she is living on the thirtieth day after my death.

THIRD: If no issue of mine survive me, I give and devise all my interests in real estate, wherever located, that I own as tenants in common with my said sister, Caroline, or as tenants in common with any of her issue, by right of representation to Caroline's issue who are living on the thirtieth day after my death, or if none, to my said sister Caroline, if she is then living. References in this Article THIRD to "real estate" include shares in cooperative apartments and proprietary leases with respect thereto.

FOURTH: I give and devise the residue of all the property, of whatever kind and wherever located, that I own at my death to the then trustees of the John F. Kennedy Jr. 1983 Trust established October 13, 1983 by me, as Donor, of which John T. Fallon, of Weston, Massachusetts, and I are currently the trustees (the "1983 Trust"), to be added to the principal of the 1983 Trust and administered in accordance with the provisions thereof, as amended by a First Amendment dated April 9, 1987 and by a Second Amendment and Complete Restatement dated earlier this day, and as from time to hereafter further amended whether before or after my death. I have provided in the 1983 Trust for my children and more remote issue and for the method of paying all federal and state taxes in the nature of estate, inheritance, succession and like taxes occasioned by my death.

FIFTH: I appoint my wife, Carolyn Bessette-Kennedy, as guardian of each child of our marriage during minority. No guardian appointed in this will or a codicil need furnish any surety on any official bond.

SIXTH: I name my cousin Anthony Stanislaus Radziwill as my executor; and if for any reason, he fails to qualify or ceases to serve in that capacity, I name my cousin Timothy P. Shriver as my executor in his place. References in this will or a codicil to my "executor" mean the one or more executors (or administrators with this will annexed) for the time being in office. No executor or a codicil need furnish any surety on any official bond. In any proceeding for the allowance of an account of my executor, I request the Court to dispense with the appointment of a guardian ad litem to represent any person or interest. I direct that in any proceeding relating to my estate, service of process upon any person under a disability shall not made when another person not under a disability is a party to the proceeding and has the same interest as the person under the disability.

SEVENTH: In addition to other powers, my executor shall have power from time to time at discretion and without license of court: To retain, and to invest and reinvest in, any kind or amount of property; to vote and exercise other rights of security holders; to make such elections for federal and state estate, gift, income and generation-skipping transfer tax purposes as my executor may deem advisable; to compromise or admit to arbitration any matters in dispute; to borrow money, and to sell, mortgage, pledge, exchange, lease and contract with respect to any real or personal property, all without notice to any beneficiary and in such manner, for such consideration and on such terms as to credit or otherwise as my executor may deem advisable, whether or not the effect thereof extends beyond the period settling my estate; and in distributing my estate, to allot property, whether real or personal, at then current values, in lieu of cash.
------------------------oOo-----------------------