Debunking The Myths About Succession Planning
People are under many illusions when it comes to succession planning. Here are a few common myths or wrong notions they possess in their mind-
Myth 1: Succession planning is meant only for the wealthy
Fact: It is essential for everyone, and ensures that your hard-earned assets are passed on to those you wish to. So, irrespective of the quantum of wealth owned and the society or economic class you come from, succession planning is important.As it potentially avoids the bitter disputes amongst loved ones later and leads to peace of mind and happiness.
Myth 2: Succession Planning should be thought of only after retirement
Fact: Life is unpredictable and uncertain and hence, the earlier one thinks through and plans, the better it is. Ideally, you should begin succession planning when your children are young and your assets are also growing like when you are between 35 to 45 years of age or when you are between 45 to 55 Years. If you die an untimely death due to an accident or some disease without making a succession plan, then your family can suffer a lot.
Myth 3: My legal heirs will handle it maturely
Fact: You could be day dreaming if you think that your heirs know how to access your assets in absence of any succession plan or proof left behind by you. In most cases, the situation becomes acrimonious between different family members who fight with each other in the courts to get their share of your estate. This type of situation can be avoided if your heir happens to be a lawyer or law expert but this is not the situation in everybody’s family.
Myth 4: I have registered my nominee(s); they will anyways be the beneficiaries of my assets
Fact: This is not true in most of the cases. Most people in India feel that adding a joint account holder or doing a nomination is enough for succession planning. But the fact is that the nominee is just a trustee of the assets only for time being, to whom the Bank or any financial institution will transfer the monies in case of the death of the holder of the assets. But this does not mean that the nominee will always be the owner of the assets. The owner of the assets will be the legal heir as per a Will, or if one has died intestate (i.e. in the absence of a Will), the transmission would be as per the country's succession laws.
Myth 5: I don't need to seek legal opinion
Fact: You should hire the services of a wealth adviser, a chartered accountant and a trusted lawyer to see the process through. This is to ensure that succession planning is done legitimately considering the nitty-gritty involved. It is highly unlikely that you are equipped enough to draft a proper succession plan by yourself. Nowadays, there are many websites which make will and other types of succession plan at a cost. But this option is for very savvy people only. Succession planning, if done in a systematic way, can prevent financial and legal grief after death.