Will
Also written Making a Will
A written legal declaration of how a person wants their assets distributed after death. Registration is not compulsory but preferable; without a Will, assets pass under personal laws.
In plain language
A Will is your instruction to the world about who gets what after you die.
Without one, the law decides for you, according to personal laws and relationships, and the result may be very different from what you wanted. Families can end up in court for years.
The booklet stresses one reassuring point: making a Will is a simple process. You can write it on plain paper, or take a lawyer's help. It is described as an essential part of estate planning.
How it works
How to make a Will (Chapter 7):
- Make a list of movable and immovable items.
- Decide which asset goes to whom, partly or fully.
- Name the person who will execute the Will (the executor).
- Preferably get it witnessed by a doctor and a lawyer, which gives it authenticity.
- Registration is not compulsory, but preferable.
- Write it on plain paper or with a lawyer's help.
Problems when there is no Will:
- Beneficiaries and their shares are not what you would have liked.
- Assets are distributed as per personal laws and relationships.
- It may lead to expensive litigation among beneficiaries and other claimants.
- Succession disputes can take years and be costly; even without disputes, the process can reduce what heirs receive.
After death: legal heirs approach banks, depositories, mutual funds and insurers with the death certificate and a legal heir's certificate. If there is a Will, assets are distributed as per the Will. Without one, the transfer is made only to legal heirs.
Will and nomination are different. A nominee only has custody of the money and has no ownership rights; the nominee must pass it on to the rightful heirs.
A worked example
Amounts and family details are illustrative.
Mr Venkatesh, 68, of Visakhapatnam, owns a flat worth Rs 70,00,000, bank FDs of Rs 15,00,000 (his elder son is nominee), and shares worth Rs 8,00,000 in his demat account.
He wants the flat to go to his daughter, who has cared for him for ten years, and the FDs and shares to be split equally between his two sons.
Without a Will: the flat would pass under personal law, likely in shares to all his legal heirs, not to his daughter alone. And the elder son, as FD nominee, would receive Rs 15,00,000 only as custodian, bound to pass it on to the legal heirs, as in the booklet's example of Suresh and his nominee Ramesh.
With a Will: he lists his assets, gives the flat to his daughter, splits the FDs and shares between his sons (Rs 7,50,000 and Rs 4,00,000 each), names his daughter as executor, gets it witnessed by his doctor and his lawyer, and registers it, which the booklet calls preferable though not compulsory.
Why NISM asks about it
Chapter 7 (Pension, Retirement and Estate Planning) covers the Will as the core of estate planning, how to make one, the problems in its absence, nomination, power of attorney and transfer of assets after death. Expect: is registration compulsory (no), who should preferably witness it (a doctor and a lawyer), and what happens without a Will (personal laws; transfer only to legal heirs).
Common exam traps
- Registration of a Will is not compulsory, only preferable.
- Plain paper is enough. A lawyer is optional.
- A nominee is not an owner. A Will decides ownership; nomination gives custody.
- The preferred witnesses are a doctor and a lawyer in the booklet.
- Without a Will, distribution follows personal laws, and transfer goes only to legal heirs.
- A Will is part of estate planning, not the whole of it. Nomination and power of attorney sit alongside it.
Where this is taught
- Series X-B · Chapter 14: Basics of Estate Planningintroduced here
- Series SEBI-ICE · Chapter 7: Pension, Retirement and Estate Planningintroduced here
Related terms
- CodicilA supplementary document that explains, alters or adds to a Will and is read as part of it — executed and attested exactly like the Will itself.
- Estate planningDeciding during your lifetime who is to receive which of your assets after your death, and documenting it — mainly through a Will and nominations — so heirs can claim them easily and cheaply.
- ExecutorThe person named in a will to carry it out — obtain probate where needed, collect the assets, pay debts, taxes and expenses, and distribute the estate as the will directs.
- NomineeThe person you name to receive custody of your money or securities when you die — a custodian who must pass the asset to the legal heirs, not the owner of it.
- Succession certificateA certificate issued by a District Court under the Indian Succession Act, 1925 authorising the legal heirs of someone who died without a Will to collect the deceased's debts and securities.
- Legal heirThe person entitled by law to a deceased person's estate — distinct from a nominee, who only holds the money in trust until it reaches the rightful heirs.
- Pre-nuptial agreementAn agreement entered into before marriage setting out how finances and other matters will be dealt with if the couple separates — a device whose legality in India the workbook says is not established.
- Beneficial nomineeA life insurance nominee who is a parent, spouse or child of the policyholder — entitled to keep the claim money in their own right instead of holding it in trust for the legal heirs.
- Class I heirsThe primary heirs of a Hindu male who dies without a will, listed in the Schedule to the Hindu Succession Act, 1956 — they inherit together and to the exclusion of all other heirs.
- WasiyatA will under Muslim law — valid in writing, orally or by gesture, made by a person of sound mind aged 15 or above, but limited to one-third of net assets, the rest passing to heirs.
- General power of attorneyA power of attorney that lets the agent do anything the principal could do. The booklets warn never to give one to your stock broker or depository participant; give a specific one instead.
- Special power of attorneyA power of attorney that gives the agent only limited powers, such as carrying out one specific transaction. SEBI guidelines allow a specific PoA to a broker or DP, never a general one.
- Duplicate WillA signed, attested second copy of a Will that the testator keeps for themselves while the executor or trustee holds the original — destroying either copy revokes both.
- Estate debtAll debts and obligations an individual owes at death — housing and car loans, credit card dues, business outstandings and tax liabilities — one of the three constituents an estate plan must account for.
- Irrevocable trustA trust whose settlor cannot take the property back, which is why the workbook records that it is protected from the settlor's bankruptcy and usable to secure the interests of dependents.
- TrustA legal arrangement in which property is transferred to trustees, who hold legal title and control it for identified beneficiaries on terms set out in a trust deed.
- GiftA voluntary transfer of movable or immovable property without consideration from a donor to a donee — usually irrevocable, and exempt from tax when received from specified relatives, on marriage or under a will.
- IntestateDying without making a will. The property then passes to heirs under the succession law that applies to the person, which may not be what they intended.
- ProbateA copy of a will, certified under the seal of a court of competent jurisdiction, certifying that the will was proved on a certain date — the legal confirmation attached to the will it certifies.
- EstateEverything a person owns and owes at the time of death — real estate, investments, insurance policies, bank accounts and items of value — the pool that estate planning organises for distribution.
- Residuary clauseA clause in a will that directs any asset not specifically named in it to one identified beneficiary, so nothing is left without a named recipient.
- Joint holdingProperty held by more than one person and accessed by them subject to the mode of operation, used as a simple way to let a spouse or child reach an asset without waiting for succession.
- Joint tenancyA form of co-ownership carrying a right of survivorship, in which all tenants must acquire their interest at the same time from the same transaction and no tenant may possess any part exclusively.
- Joint WillA Will made by two or more persons, valid in Indian law, recognised as two Wills and intended to take effect after the death of both testators, with each testator disposing of property as an individual Will.
- LegateeThe person named in a Will to receive a portion of the deceased person's estate, as distinct from the executor, who is named to administer it.
- Living WillAn advance directive written primarily for physicians, stating a person's wishes for end-of-life care in situations where they are unable to communicate their decisions.
- Sham WillA document executed with all the formalities of a Will but without any intention of testamentary operation — it is a nullity, because intention is the primary characteristic of a valid Will.
- Testamentary capacityThe soundness of mind a testator must have to make a valid Will - sufficient capacity to understand his property, his relation to the possible objects of his bequest, and the bearing of the Will provisions.
- Testamentary guardianA guardian appointed under the provisions of a Will, most often for minor children, who manages the child affairs within the limits the Will sets.
- Testamentary trustA trust created through a Will, which takes effect on the death of the settlor - it is subject to the rulings under the Will and therefore goes through probate, but attracts no stamp duty and no capital gains.
- TestatorThe person who makes a Will — Section 2(h) of the Indian Succession Act, 1925 defines a Will as the legal declaration of the testator's intention about his property, to take effect after his death.
- Trust perpetuitiesThe rule that a trust cannot last for ever: Indian law caps the period within which gifts in a trust must vest, and limits the accumulation of trust income to the transferor's lifetime or 18 years.