ESTATE PLANNING

Presented By: Kajal Paliwal Sonu Kumar Joy Banarjee Abhijeet Roy

Big Fights
• Mukesh Ambani v/s Anil Ambani • Indira Gandhi v/s Maneka Gandhi

Answer

EST TE PL NNING

Defination
• Estate planning refers to the process by which an individual or his/her family arranges the transfer of assets to the legal heirs in the event of death or disability of the individual. It includes the distribution of the real and personal property of an individual to his/her heirs. • Estate =Real Property (real estate) + • Personal Property (cars, household items, shares,units, and bank accounts. )

Methods
• • • • No Will Will Trust Insurance

No Will
• When a person dies without having made a Will (intestate) • His property is then inherited by his legal heirs in accordance with the law of inheritance applicable to him • Legal process called probate. • Legal heirs means close family members such as one’s spouse, children, parents, brothers and sisters.

Laws of Inheritance
• Hindus, Buddhists, Jains and Sikhs – Hindu Succession Act, 1956 • Christians – Indian Succession Act, 1925 • Parsis – Indian Succession Act, 1925 • Muslims – Indian Succession Act, 1925

Will
• It is testamentary instrument by which a person makes disposition of his property to take effect after his death – Ambulatory – Revocable (Section 63 of the Indian Succession Act, 1925 )

Advantages Of Will
• Estate owners can prepare a will on plain paper • No need to pay stamp duty or buy stamp paper • The estate owner can write anything or any condition he/she wishes to have before and after his death • No confusion amongst the family members and relatives regarding distribution

Types of Will
• • • • • • • Privileged and Unprivileged Wills Conditional or Contingent Wills Joint Wills Mutual Wills Duplicate Wills Concurrent Wills Holograph Wills

Trust
• English concept. • A vehicle under which property is alienated from the original owners and held by a trustee for the benefit of others. • Creating a trust is a long process. • Governed by Indian Trust Act.(1882)

Common Types of Trust • Public Charitable or Religious Trusts
– Income from these trusts is applied to charitable or religious purposes.

• Private Trusts
– Income from private trusts is available to specified beneficiaries and not the public at large. – In some cases, the shares of the individual beneficiaries are fixed or ascertainable, according to the provisions of the trust deed. – In others (discretionary trusts), the trustee has the power to apply the income among a class or group of beneficiaries in proportions determined entirely at the trustee's discretion

Benefits of Trust
• Money collected through a trust gets tax benefits. • Trust is mainly to handle, and not manage, wealth. • Ensures higher confidentiality • The trust comes into being when the estate owner is alive

Insurance
• Premium Financing
-When you finance an insurance premium, you enter into a contract with a lender to obtain a loan. You make a down payment usually at least 15-20% of the total premium and the lender agrees to pay the insurance company the balance of the premium. You agree to repay the lender in installments according to an established schedule for the amount of the loan (principal), plus interest and any fees. Premium financing is not an insurance policy, but a means of financing the purchase of insurance. There are other costs associated with the purchase of premium financing such as interest charges, late fees, cancellation fees, and broker fees. The contract exists between the borrower and the lender, not the policyholder and the insurance company. Repayment of the loan is made directly to the lender by the borrower. This means that you'll be expected to repay the loan even if you have a dispute with the insurance company and/or the broker.

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