While Investors in India do focus on wealth accumulation as well as wealth preservation processes but they are ignorant about importance of wealth distribution. In India, family legacy could get passed on to the inheritors, minors are exceptions, without much of the tax incidence, hardly requiring an expert advice on these matters. This scenario has changed over a period of time when reputed family conflicts surfaced in the public domain, in the absence of proper Estate Planning.
Wealth accumulation take place for financial security; upgraded lifestyle; legacy for future generations and fulfillment of expensive hobbies/goals. Wealth transfer, in the absence of Estate planning, is one of the major reasons for loss of assets that can be addressed by having discipline in using assets immaculately and preserving it. Wealth transfer planning may not mean seamless transfer but it certainly forms a building block for a good estate plan.
Estate Planning is necessary to avoid family disputes; dependents survival; perpetual existence of business/enterprise; ensuring use of wealth for causes and charities planned; preservation of family objectives; Taxation and inheritance costs.
In view of the challenges likely to be faced in the absence of succession planning, it becomes pertinent to have Estate Planning for seamless transfer of wealth/estate, post ones demise, to successors and/or legal heirs. Wealth does mean all assets owned by the head of the family that includes real estate, financial assets, bullion, family business, movable assets and Art & Artifacts. Even liabilities also get transferred along with assets.
Wealth distribution could be ensure by way of nomination, formation of family/private trusts, preparing a registered will or codicil and transfer for charity purpose.
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