Not Making Will

Last week in one of my blog, I had written about  making a WILL, and today I am writing about WHAT HAPPENS WHEN WE DONOT MAKE A WILL .

Often, we Indians find umpteen excuses for not making a will that can smoothen the legacy planning in our absence. What are the excuses?

• I am too young
• It is too tedious and not worth the effort.
• It is costly
• I will make it later. There is enough time.
• My family thinks it is inauspicious to make a will.
• I do not think I have enough property to make a will.

Of course, there could be many more reasons why we do not want to make a will. It is as close to thinking about what happens after us. And we mostly want to avoid that question. For some, it can cause anxiety too. However, here is little something to prompt you towards creating that will.

Unclaimed amounts

Here are some facts and figures available in the public domain but something  which most of us are not aware of:

• A whopping Rs 25,000 Cr of unclaimed money is lying with various insurance companies ( figures are of May 2022) by the Insurance Regulatory & Development Authority (IRDA). The maximum amount is because of policy holder’s death which their family did not claim.
• In Financial Year 22, the unclaimed amount in Indian Banks across various states was Rs 48,262 Cr. This money is across amounts not operated for 10 years, term deposits not claimed within 10 years from the date of maturity.
• As of March 2022, the Employees Provident Fund Office (EPFO) had over Rs 58,000 Cr lying unclaimed in its accounts.

In 2021, The Economic Times article pegged the total unclaimed investor amount as more than Rs 82,000 Cr. This amount included the post office & mutual fund investments, and others. The question one need to answer is, do you want to add to this amount, or can you ensure that your wealth goes to its rightful owners without any issues?

The Possible Scenarios

Here are some possible scenarios after your death, depending on your status, if you have not created a will.

1 You are single– If you are single and childless and your parents are alive, they will receive your entire state. If only one parent is living, your property will get equally divided among your siblings and surviving parent. If neither parent is alive, it gets divided among your siblings. If there is no surviving siblings, nieces, or nephews, then the maternal and paternal side relatives get equal share. If you are single with surviving children, the property goes to your children. If a child has died and there are grand children, they get a share.

2 You are married– If you are married and survived by your spouse and children, the entire state will go to your spouse and children. If not, it will get divided among your spouse, parents, siblings, and relatives, depending on the nature of the property. For example, self created, inherited or ancestral, etc.

3 You have been in unmarried relationship– Indian laws only consider relatives for property inheritance and not unmarried partners. Hence, it is big issue for the surviving partner to get share from the deceased partner’s estate.

4 You are in domestic partnership– The domestic partnership rules of state  you were in, will apply as such each state has different rules.

All the above scenarios tell you why it is essential for you to make a will to avoid delays, legal fights, and confusion after your death. And for those who are grieving, this adds to the trauma. Even if you do not own property and only financial assets, you should ensure nominations for all financial assets such as FDs, bank accounts, post office accounts, Demat accounts, etc.

What should you do?

Start with estate planning as early you can, it is never too late. Making a will is not cumbersome as many think it to be. Did you know that you could even hand write a will? Or the Indian laws do not consider a nominee as a legal heir and only a caretaker. Indeed, a lot of such information about our inheritance laws is not known to people, and they feel it is a cakewalk for their family to sort out their affairs after their death. There are no excuses for not making a will, whereas making a will is highly beneficial for the family. After all, you want the right people to get their share and  not add to unclaimed kitty that seems to growing by the day.

So friends, if you have still not created a will, please do at the earliest.

Waiting for your feedback on this blog.

Anil Malik

Mumbai, India

13^th March 2024