Need for succession planning and creating a Will. The details could be more on Indian context.

1. Succession Planning
J. Venkatesh
10/2/2017 1

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Best efforts have been made to ensure accuracy of contents in this presentation.
Information available in the internet have been verified and has been presented in
this presentation with relevant references.
However if there is a different view or information please share the same (Mail to:
ven_hal@yahoo.com) with the REFERENCE. I would research it further and suitably
modify this presentation.
This presentation is intended for creating awareness about the need for ‘Succession
planning”.
The author shall in no way be responsible to any one (directly or indirectly) for any
kind of loss that might arise from use/sharing of information from this presentation.
DISCLAIMER

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Topics in the Presentation
Succession Planning
SUCCESSION PLANNING
JOINT ACCOUNT AND NOMINATION
INVENTORY OF ASSETS
CREATING A WILL
WHO? HOW MANY?... HOW MUCH?

4. 10/2/2017 4
SUCCESSION PLANNING
Succession Planning
Have you thought about this?
 All of us spend a huge portion of life in earning money, sacrifice many a happiness (and even basic needs
in our life) to save money and invest them to earn a higher returns. But that is not the end of it...There is
a knot missing in this loop. It is about SUCCESSION PLANNING.
 SUCCESSION PLANNING
o We must leave a legacy... A clear succession planning and some measures that will support the
dependents in case of the unfortunate departure of the person running the show.
o Many would not even have given a thought about it in their life times.
o This about creating a legacy for our hard earned wealth.
 This topic is not something one feels comfortable to read or even think about... But it is a must. Suggest
to think about the contents of the presentation for a day or two, and take the necessary ACTIONS.
 Succession Planning is not about only creating/writing a 'Will'. It is much beyond and a person needs to
put some thoughts and have a proper planning. Even a few minor things would make a lot of difference.
We will see this planning aspects, in the next few slides and discuss the 'Will' part at last.
Don’t Waste Further Time. Put your thoughts today for SUCCESSION PLANNING

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WHO…? HOW MANY…? HOW MUCH…?
 The first step in Succession planning is identifying ‘Who’ are
your beneficiaries. This is a key task.
 If there are more than one beneficiaries, then comes the next
question ‘How’ much for each beneficiary.
 Identifying ‘Who’ is the beneficiary and ‘How much’ for each
beneficiary, though may appear simple…is not always.
Parents
 Are they still in service?
 Do they have a stable and abundant pension?
 Would interest from their PF accruals be good enough to meet their expenses?
 Are they backed with assets like rent from property or earnings from business?
Children
 What is their age? (If Minor, you need a guardian)
 Have they completed their education?
 Based on a individual our dependents could be Parents, Brothers, Spouse, Sisters, Son,
Daughter or even Minor children.
 Have these considerations or questions in your mind when you identify your beneficiaries.

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WHO…? HOW MANY…? HOW MUCH…?
Spouse
 Does your spouse go to job?
 Have you gone for a huge housing loan, which would be your spouse responsibility in your
absence?
 The age range of your children and their future education needs
Brother/Sister
 Would there be a possibility of mis-use by In-laws in case the beneficiary is your Sister?
 Are they still studying or going to a job?
 Are they married?
 If they are beneficiaries, will they support your parents as you would have?
There is no correct answers…It depends on an individual.

7. 10/2/2017 7Succession Planning
JOINT ACCOUNT AND NOMINATION
The next step is you need to do is link the details of beneficiaries to your investment
instruments.
Adding Nomination
 Every investment option will have a nomination facilty/column.
 Be it your SB account, FD, Insurance, Post office schemes like NSC etc.
 Fill the details of nomination without fail.
 If you have not done so far, go to the bank.. get the nomination form and update the
nomination details.
 For SB account, you can even see nomination details in your net banking account.
 If those details are empty, please go to the branch in person and update the nomination
details.
 This should be done on PRIORITY.
 This detail is what helps the beneficiary or your nominee to get the invested amount
smoothly, in a unfortunate event of the person passing away.

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JOINT ACCOUNT AND NOMINATION
Joint Account:
 This is another route and a favorable route.
 Any future accounts that you open must be a joint account with your beneficiary.
 Say if you are going to do a Fixed deposit for 5 Lakh. Do it in a Joint account, with your
beneficiary (i.e. Spouse or Parent or Brother or Sister).
Note: I am not sure if for existing accounts this can be done.
IMPORTANT: When opening joint account there would be one section in the application form to
fill. This is about what should be done to the money on maturity. There would be 3 options as
below.
1. First Account Holder Only
2. Second Account Holder Only
3. Either or Survivor
Choose the last option ‘Either or Survivor’, without which the whole exercise is a waste.

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INVENTORY OF ASSETS
This is all about sharing the details of our investment, savings and insurance with the
beneficiaries/nominees whom we identified.
HOW DO YOU SHARE IT? There are a couple of ways.
1. Tell your beneficiaries verbally about the details of investments. But our memories are
limited and would forget it.
2. Write down all financial details in a paper (Or Type and Print) and give it to your
beneficiaries. This is the most effective method. Call this as the Knowledge Sharing
Document.
3. One step ahead, involve your beneficiaries whenever possible… by taking them to the bank
where you have account.

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INVENTORY OF ASSETS
FINANCE
INSTRUMENT
DETAIL TO BE SHARED
Property Details of property you own, where the documents are kept, is there a loan against
the property?
Investments This includes details of your bank accounts, Fixed Deposits, Recurring Deposit, NSC
etc.
Insurance Details of different Insurance products i.e. Tenure of policy, the premiums paid so far
etc.
Social Security
Scheme
This caries details of your PPF and Pension Schemes
Liability What and how much you owe to others?
- This must have details of your bank loan (Which bank, how much and tenure
details).
- This portion must also have details of money that you have borrowed from
friends and relatives.
Others - Property Tax Paid? Yes/No with details and copies of the receipt.
- Details of personal Income tax payments/filings
- Details of Lockers if any.

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INVENTORY OF ASSETS
Bank Name Account Number Branch Nominee
SBI XXX-HYYY-XXX HAL Spouse Name / as applicable
HDFC DDD-YYYYYY Kodihalli
ICICI
FD Account Number Name of Bank held Amount (Rs.) Nominee
016XXXXXXXX ICICI 1,00,000 As applicable
Scheme Name Account Number Amount Accumulated
so far
Nominee
PPF XXXXX-YYYYYYY 5 Lakhs As applicable
Pension Scheme Name
Insurance
Company
Policy Number Tenure Amount Assured Nominee
LIC 8888888 30 Years 2.5 Lakhs As applicable
SAMPLE
DETAILS OF BANK ACCOUNTS
DETAILS OF DEPOSITS
DETAILS OF SOCIAL SECURITY SCHEMES
DETAILS OF INSURANCE POLICIES

12. 10/2/2017 12Succession Planning
CREATING A WILL
The last step in succession planning is on creating a ‘Will’.
By and large, this is the most uncomfortable topic that one would like to talk or discuss or
hear or even think about. In the words of Shankar Pai, who has done some commendable
work in area of spreading awareness on making Wills…
“A will is a sensitive topic to open up to. People are not comfortable discussing a
will in India. There is a misconception that if someone tells you to make a will, the
person thinks that indirectly you are telling him that his end is near or that you are
eyeing his property. However, all apprehensions disappear when I tell them the
consequences of not making a will”
If you are still not convinced, let me put the situation in a different way. “Do you want to
leave your wealth without a will and let your loved one’s fight with each other, spend hefty
amount on their lawyers, spend time in the courts to get their shares… that too get it after
many many years of this hardship?” – Surely not!

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CREATING A WILL
What Is a Will?
A Will is a legal document that sets forth your wishes regarding the distribution of your
property to your beneficiaries, their share and the care of any minor children.
Some basics about Will…
 A will can be made by anyone above 21 years of age in India.
 You can make the will on plain paper in India. It’s not legally necessary to make the Will on
stamp paper.
 It is advisable to write your Will in your own hand writing, as the same can be verified
later in case of any doubts raised by relatives.
 The division of assets might happen according to your family structure and your
preferences. You would want to divide your wealth unequally or make a provision for a
close fiend or a faithful servant or a charitable cause.
o The last three… giving to a friend, servant or charitable cause will never ever happen
without documenting in a will.

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CREATING A WILL
The Importance of Will
 If a person should die without preparing a WILL in India, then the wealth will then be
distributed as per ‘Hindu Succession Law’ (Government rules, on how wealth should be
divided among family members).
 Laws of inheritance and succession, are complicated and diverse in nature, and are
different for different religions.
 Think about the amount of inconvenience caused to the family members because of the
person's laziness, in not making a Will for them. In case of a dispute, family members have
to produce the proof about their relationship with and also have to go helter-skelter to
lawyers and spent money and energy.
 Much better then, to gift them some time of yours, and creating a will! This will save them
a lot of headache.
o There would not be a bigger embarrassment for the family members to prove their relationship
with the deceased.
o Imagine how one feels to think their son or daughter or spouse in a situation to prove in court
their relationship with the deceased, that they are the legitimate children or spouse…)You would
have tears in your eyes, if you think about that situation for a moment.!)

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CREATING A WILL
STRUCTURE OF WILL
 Declaration - A generic statement about you with details of name, date of Will, and a few
standard legal statements
 Details of Property and Documents - This is more a extract of the inventory of financial
assets that you had identified in Step 3.
 Details of Ownership - This is what you did in Step 1, Identifying your
nominees/beneficiaries. You may have to describe what % each gets, in case of multiple
beneficiaries
 Signature - Your sign, along with Witness and all address details.
Before you proceed further for creating Will, you must have completed the below previous
three steps….
1. Identification of your beneficiaries/nominees
2. Filling the nomination details in all your financial assets and lastly
3. A knowledge sharing document, which is a inventory of your financial assets with specific
details of amount, account number, branch address etc.

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CREATING A WILL
Will Section Details
Declaration
Section
o In the first paragraph, you have to declare that you are making this will in your
full senses and free from any kind of pressure.
o You have to mention your name, address, age, etc. at the time of writing the will
so that it confirms that you really are, in your senses
Details of
Property and
Documents
o The next step is to provide list of items and their current values, like house,
land, bank fixed deposits, postal investments, mutual funds, share certificates
owned by you.
o You must also indicate, where all these documents are stored by you. In all
probability, these are in your bank safe deposit box. Even the will should be
stored in there!
o Make sure, you take the details from the bank manager, about the procedure
and rules of releasing your will from the safe deposit after your death.
o Make sure you communicate it to the executor of the Will or your family
members.
Reference: https://www.jagoinvestor.com/2010/11/how-to-make-a-will-in-india-and-its-importance.html

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CREATING A WILL
Will Section Details
Details of
Ownership
o At the end of the will, you should mention who should own your assets items
and in what proportion, after your lifetime.
o If you are giving your assets to a minor, make sure you appoint a custodian of
your assets till the individual you have selected, reaches an adult age.
o This custodian obviously, has to be a trustworthy person.
Signing the Will o At the end, once you complete writing your will, you must sign the will very
carefully in presence of at least two independent witnesses, who have to sign
after your signature, certifying that you have signed the will in their presence.
o The date and place, also must be indicated clearly at the bottom of the will.
o Make sure you and the witnesses sign all the pages of the will.
o One important point while choosing witness, is that they should be your
friends, neighbors, or your colleagues and not the direct beneficiaries in the
Will.
o They only certify, that you yourself have signed the will in their presence and
are not a party in making the will in India.
o The envelope has to be sealed after completing all the formalities and the seal
must bear your signature and the date of sealing.
o The witnesses need not sign on the seal of the envelope.

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CREATING A WILL
Important points while making a Will
 If possible, have the two witnesses be a doctor and a lawyer. A
doctor signing a will, won’t raise any question of you, being of
unsound mind. The lawyer, will vet the will and make sure you
don’t make mistakes at the time of writing and signing it.
 The attesting witness and his or her spouse should not be a
beneficiary under the terms of your Will. This might create
vested interests and some times make your will invalid. Also, make sure the witnesses are
younger than you and not very old as your will might be in effect for several years! And
you want them to be present in this world
 Write your will on good quality thick white paper so it doesn’t get spoiled over a period of
time. It should be stored in a plastic envelope in full size, without folds.

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CREATING A WILL
Important points while making a Will (Contd…)
 Note that you should keep just one more copy of will and stored separately from the
original will. The will must be stored very safely in your bank, in safe deposit box. You must
also inform your next of kin, as to where you have stored your will. Do not make many
copies of your will.
 In case of Hindus, it should be clearly stated if the property is inherited or not, because it
makes a huge difference, as no ancestral property can be assigned to any person through a
will. All rights on inherited property are acquired by birth. So if you inherited a property
from your Father, you cannot say in a will, that you want to assign it to person X only! It will
go to all your legal heirs as it is “Inherited”
 A Will must always be dated and if more than one will is made, the one with the latest date
will nullify all the previous ones. In fact, there should be a statement in your will, nullifying
all other previous wills. The pages should be numbered to avoid fraud.
 The value of assets often fluctuates, so it is better to mention how much each beneficiary
will receive, in percentage terms rather than absolute numbers. Unless it is pure cash.

20. 10/2/2017 20Succession Planning
TO SUM UP…

21. 10/2/2017 21Succession Planning
Thanks for the Patience