Estate planning tips for senior citizens

Estate planning tips for senior citizens

Estate planning for senior citizens is required for the smooth transfer of assets and for the fulfilment of their wishes during their lifetime and after their death.

While making a Will, senior citizens should, as far as possible, bequeath their assets to their spouse first, and the assets should go to children, only if he or she predeceases.

Most senior citizens pay little attention to estate planning. They spend years working hard to create wealth but when it comes to ensuring that it is enjoyed by the intended recipients, they procrastinate.

Some of the most common excuses for putting away estate planning are nominations, or many seniors simply claim they are not rich enough to warrant a Will.

If you have an asset and want to pass it on to a loved one, you need to have an estate plan in place.

This could be anything -- from money in your bank account or the house in which you live currently or even some jewellery or artefacts, no matter how humble they might seem to you. This is critical when you have more than one child, their spouses and grand-children.

“This comprehensive planning process typically includes the creation of legal documents, such as Wills, trusts, and power of attorney (POA),” said Bharat Chugh, advocate, Supreme Court, and a former judge.

“While making an estate plan, it is very important that senior citizens should be clear about the distribution of assets, and they should not try to copy what others have done,” said Hemang Parekh, Partner, DSK Legal.

Create an inventory of your estate

While making an estate plan, create an inventory of your assets and liabilities.

First, you must consider how your properties and personal belongings will be distributed among your children, spouse, and other legal heirs. This is why one must first take an inventory of all their available tangible and intangible assets.

“After making this list, they must clearly state which beneficiaries will get what asset or which properties will be distributed among which beneficiaries,” said Vishnu Chundi, Founder and CEO, AasaanWill.

If pending financial liabilities exist, they must be mentioned. “This will give a fair idea about the liabilities to legal heirs/beneficiaries in case of the unfortunate demise of the senior citizen,” said Chundi.

“Have a proper asset and liability register with the account and folio number details against each asset,” said Shailendra Dubey, Partner, PlanMyEstate Advisors LLP.

Share with your family members the name and contact details of the bank's relationship manager who can assist your family with the claim process on demise.

Writing a Will and appointing a power of attorney

A Will is the most basic and the very essential document of an estate plan. It enables one to plan wealth distribution to their loved ones properly. “In the absence of a Will, the wealth may not get distributed to the desired recipients and may complicate the manner of ownership among the legal heirs,” said Sneha Makhija, head of wealth planning, products & solutions, Sanctum Wealth.

Ankur Mahindro, Managing Partner, Kred Jure, advises having a registered Will always, with two independent witnesses. “Using simple language, instead of legal jargon, ensures that the document is easily understood and reduces the likelihood of misinterpretation or disputes,” said Chugh.

It is also important that senior citizens make sure that a general  POA is put in place.

PoAs are created by someone who cannot do the transaction by himself/herself due to various reasons, such as illness, old age, overseas residence, etc. These transactions could be related to property, banking, tax payments, legal and judicial proceedings, financial investments, etc.

“However, one needs to be careful while choosing the individual for such rights as these powers can be misused,” Makhija cautioned.

Consider creating a trust

Senior citizens can protect their assets by keeping them in a trust. After including the assets, one can list their beneficiaries and what share of assets each beneficiary will get after his death. This way, a trust allows the distribution of wealth among legal heirs in a planned way, without the need for the heirs to undergo probate.

Think of your spouse first, kids later

While making a Will, senior citizens should, as far as possible, bequeath their assets to their spouse first, and the assets should go to children, only if he or she predeceases. “This is to ensure that the surviving spouse does not have to depend on their children for his/her living expenses,” said Dubey.

Make a Living Will

A Living Will is a legal document that enables individuals to gain control over their medical decisions when they can no longer communicate.

In fact, it goes beyond the boundaries of illness, enabling people to express their wishes regarding life-sustaining treatments and interventions. It's not just a legal process; it's a lifeline for those navigating tough times.

“By clearly outlining preferences for medical interventions, resuscitation, and end-of-life care, a living Will serves as a guide for healthcare providers and family members, ensuring that the individual's wishes are respected,” Chundi said.  A  Will also permits individuals to list their organ donation wishes. A Will makes the donation legally binding and ensures that one’s wish is honoured by those one is survived by.


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