Having understood what a WILL is and certain terminologies (in one of our previous articles), it is now imperative to understand why a WILL is necessary at all. Let us discuss this with the help of an example.
Here is a family of four, and Mr. A is the only working professional. He is supported by his wife and two children. Like any other individual, Mr. A has a few assets and a housing loan. He also has a car loan. He is a proud owner of multiple bank accounts, credit cards, and the like. Due to excessive pressure from one of his family friends, who happens to be an insurance agent, he also has half a dozen insurance policies.
He has not disclosed all or complete details to his wife pertaining to his personal finances. His wife has absolutely no clue about the financial position of the family. God forbid something happens to Mr. A; she will not know whom to contact or what his assets and liabilities are. First, she will be grief-stricken, having lost her husband. On top of that, she will be under tremendous pressure to get to know the whereabouts of financial papers and other relevant information. Do you wish your family to be in this position?
The situation is worse if Mr. A were an entrepreneur. There is an additional layer of important documents and coordination activity required in such a scenario. The drama does not end there. What if there is an outsider who claims a stake in Mr. A’s assets, claiming to be a beneficiary?
On the other hand, had Mr. A written a WILL, things would have been extremely smooth. Mrs. A would know exactly whom to contact and what action points to execute for the smooth transfer of assets to the beneficiary. The WILL document will override all nominations and other ambiguities within the family. The entire process would be completely smooth and seamless.
Estate planning and a WILL are among the best gifts we can give our family.